4/14★Sometimes I borrow the power of ChatGPT, installment 74
FX Automated Trading, EA developerReiwa's Double-I is.
This series has been written with the aim of posting every day since last year.
Probably we have continued for almost a year now!
If you read what I have written so far,
you will surely move closer to better EA operations, I am confident.
And since I would like to take a short break,
I will continue posting with the help of ChatGPT.
From time to time, I will post irregularly, as before.
FX automated trading, EA developer Reiwa's Double-I.
Today, I will talk about ideas to prevent liquidation or expulsion.
In FX trading, the risk of a margin call or loss due to drawdown is inherent.
However, there are ideas to prevent it using methods specific to automated trading.
Conclusion: Turn on Compounding Operation Mode
In short, the conclusion is that keeping the **compounding operation mode ON** is one way to reduce risk.
Mechanism of Compounding
Compounding operation automatically adjusts the lot size according to the growth or decline of funds.
If funds increase: the lot size automatically increases, making profits easier to grow.
If funds decrease: the lot size automatically decreases, softening losses.
This is the key of compounding. When funds decrease, the lot size decreases as well,
which reduces the risk of large losses expanding.
Compounding vs. Simple Interest
In simple interest operation, the configured lot size remains fixed. Even with ongoing drawdowns, you keep entering with the same lot.
Because the lot size does not change as funds decrease, eventually you may face margin shortages, increasing the risk of liquidation or expulsion.
On the other hand, in compounding operation, when drawdown reduces funds, the lot size reduces accordingly.
Therefore, compared to simple interest operation, drawdown losses are restrained, reducing the risk of bankruptcy.
Risk Management of Compounding
Even with compounding, you must carefully calculate how much risk you take.
To do so, refer to the **“Risk Management Calculation Method”** and
set an appropriate lot size percentage relative to funds.
Refer to the links below and perform correct risk management calculations.
Summary
Compounding increases profits when funds rise and suppresses losses when funds fall.
Turning on compounding mode makes liquidation and expulsion risks more likely to be mitigated.
Please make good use of compounding to aim for stable EA operation.
I hope this is helpful!
That’s all for now!
━━━━━━━━━━━━━━━
【Flow from starting EA to intermediate level】
First, it is important to master “installing EAs.”
--------------------------------------------------------------------
MT4 EA (Expert Advisor) and Indicator Installation Procedures
https://www.gogojungle.co.jp/post/1/8212
--------------------------------------------------------------------
※GoGoJungle video version※
At first, you may not understand everything at once, and some people will undoubtedly struggle.
I also struggled many times at the beginning, so don’t rush—you’ll be fine!
If you don’t understand something, use the “Contact form” available!
----------------------------------
https://www.gogojungle.co.jp/inquiry
【How to Choose an EA】
Now that you feel you can operate an EA,
you may think, “I don’t know which EA is likely to win… I don’t want to lose…”
Therefore, Reiwa's Double-I has
published articles so you can gauge the pros and cons through
“backtesting.”
--------------------------------
■ How to Find Winning EAs from Backtests
https://www.gogojungle.co.jp/finance/navi/series/1714
----------------------------------
backtesting supports that,
as the backtest period is usually longer than the forward period,
whether you happen to win in forward testing can be inferred to some extent by mastering backtest evaluation.
【EA Risk Management How-To!?】
And no matter how excellent an EA you obtain,
if you neglect risk management, FX will collapse.
how to manage risk?!
the following article provides the answer.
----------------------------------
■ About “EA Risk Management Calculation Method”
https://www.gogojungle.co.jp/finance/navi/articles/64703
----------------------------------
【EA Operation Mindset is Important】
And to continue EA operation for a long time, the “EA operation mindset” is also important.
Regarding those articles,
----------------------------------
12/30 End-of-year Special!! EA Fully Explained Course Part 3
https://www.gogojungle.co.jp/finance/navi/articles/80551
8/12 [Obon Holiday Special!] Now you too can be an EA Master! “EA Operation Mindset”
https://www.gogojungle.co.jp/finance/navi/articles/72829
8/17 [Obon Holiday Special!] Now you too can be an EA Master! “Notes during EA Operation”
https://www.gogojungle.co.jp/finance/navi/articles/73797
----------------------------------
With that said,
the content is quite substantial and important,
so even if you don’t understand it immediately, please make sure to read it!
━━━━━━━━━━━━━━━
【Reiwa's Double-I EA Listing】
https://www.gogojungle.co.jp/users/112481/products
Specifically categorized EA by genre for Reiwa's Double-I
https://www.gogojungle.co.jp/finance/navi/articles/67162
(Genre diversification is essential when constructing a portfolio)
━━━━━━━━━━━━━━━
【List of Reiwa's Double-I Serial Articles】
■ EA Beginner Course
https://www.gogojungle.co.jp/finance/navi/series/1700
“About EA Risk Management Calculation”
https://www.gogojungle.co.jp/finance/navi/articles/64703
https://www.gogojungle.co.jp/finance/navi/articles/65978
https://www.gogojungle.co.jp/finance/navi/articles/64738
https://www.gogojungle.co.jp/finance/navi/articles/65619
https://www.gogojungle.co.jp/finance/navi/series/1714
https://www.gogojungle.co.jp/finance/navi/series/1701
https://www.gogojungle.co.jp/finance/navi/articles/64723
https://www.gogojungle.co.jp/finance/navi/articles/65010
https://www.gogojungle.co.jp/finance/navi/series/610
【Reiwa's Double-I's Belief】
Develop EAs with a straightforward approach,
have more people use them,
and maintain a long-term WIN-WIN relationship,
aiming to revitalize the EA market and raise literacy.
━━━━━━━━━━━━━━━
