4/20★Sometimes I borrow ChatGPT’s power, that’s 80
FX Auto Trading, the EA developerReiwa’s Double-E.
This series has been written with the aim of daily posts since last year.
I think it has continued for nearly a full year now!
If you read what has been written so far,
you’ll surely come closer to better EA operation, I’m confident.
And, since I want to take a short break,
I will continue posting with the help of ChatGPT.
From time to time, I will post irregularly as before.
I am the EA developer, Reiwa’s Double-E.
Today“The Mystery of the Profit Factor”I will talk about.
In EA backtests, you get many numbers, right?
What you often see is the “Profit Factor (PF).”
For example,PF=1.50 in a backtest result might make you think, “Oh, that’s high!”
However,in actual operation, have you ever felt this way?
- “Oh! I made 1,500 yen!”
- But then, “Ah… I also lost 1,000 yen…”
- “Should have stopped when it was profitable…?”
- “In the end, only 500 yen is left in profit…”
You might have felt this way.
However, this situation actually means Profit Factor = 1.50.
Profits of 1,500 yen and losses of 1,000 yen.
With this net,a 500-yen profit remains, which is what Profit Factor = 1.50 means.
Quite mysterious, isn’t it…
Usually you might feel “I lost money.”
Or you might become emotional looking at the loss and stop operating the EA.
However,Profit Factor = 1.50 indicates, in the long run, that profits are positive.
You need to judge with data rather than emotions
This is a very important point.
The same applies when Profit Factor is 1.20.
- 1200 yen profit and 1000 yen loss.
This difference is 200 yen of profit.
But what if this 1.20 EA trades a lot?
An EA with 1.20 trades frequently and accumulates small profits.
It may not look very “profitable,” but with a high trade count, it could be more profitable than an EA with 1.50 in the same period.
The important point here is that you cannot judge only by the number of trades and Profit Factor.
Other factors to consider
- Maximum drawdown: How much drawdown occurred before profits were realized?
- Number of positions and lot size: What is the maximum number of positions and lots taken? What margin is required at full scale?
- Starting capital: How much capital is needed to use this EA?
Considering these factors comprehensively, it is important to judge the EA’s operation.
Not just a high Profit Factor, but also the number of trades, drawdown, required margin, and many other factors must be considered.
Well then, see you next time!
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【Flow from starting EA to intermediate level】
First, it is important to “master installing the EA.”
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MT4 EA (Expert Advisor) and Indicator installation steps
https://www.gogojungle.co.jp/post/1/8212
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※GogoJungle video version※
Even then, at first you may not understand everything at once, and some people may stumble.
I also stumbled many times at first, so don’t rush—you’ll be fine!
If you have questions, there is a “Contact form,” so please use it!
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https://www.gogojungle.co.jp/inquiry
【Choosing EA】
Now that you’re ready to operate an EA,
you might think, “I can’t tell which EA will win… I don’t want to lose….”
So, Reiwa’s Double-E decides to provide
“to a certain extent, you can judge by backtests.”
The following articles were serialized to help with this.
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https://www.gogojungle.co.jp/finance/navi/series/1714
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Backtest periods are usually longer than forward periods, and
【How should EA risk management be handled?】
And no matter how excellent an EA is,
FX collapses if risk management is neglected.
So for EA, what should risk management be?
The following article answers this.
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■ About “How to calculate EA risk management”
https://www.gogojungle.co.jp/finance/navi/articles/64703
【EA Operation Mindset is also important】
And, to keep EA operation long-term, the EA operation mindset is also important.
For those articles,
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12/30 Year-End and New Year SP!! EA Comprehensive Course Part 3
https://www.gogojungle.co.jp/finance/navi/articles/80551
8/12 [Obon holiday special!] Now you’re an EA Master! “Mindset for Improving EA Operation”
https://www.gogojungle.co.jp/finance/navi/articles/72829
8/17 [Obon holiday special!] Now you’re an EA Master! “Notes during EA operation”
https://www.gogojungle.co.jp/finance/navi/articles/73797
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That’s it,
the content is quite substantial and important,
even if you don’t understand it immediately, please make sure to read it!
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【Reiwa’s Double-E EA Listing】
https://www.gogojungle.co.jp/users/112481/products
Specifically classified list of Reiwa’s Double-E EA by genre
https://www.gogojungle.co.jp/finance/navi/articles/67162
(Portfolio diversification requires genre diversification)
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【Reiwa’s Double-E Serialized Articles】
■ EA Beginner Course
https://www.gogojungle.co.jp/finance/navi/series/1700
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“About the calculation method for EA risk management”
https://www.gogojungle.co.jp/finance/navi/articles/64703
【Portfolio Version】 About the calculation method for EA risk management
https://www.gogojungle.co.jp/finance/navi/articles/65978
Tips for easily spotting fraudulent products (in the case of EA)
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-E’s Beliefs】
Develop EA by a proper method,
increase support from more people,
maintain a long-term WIN-WIN relationship,
and aim to revitalize the EA market and raise literacy.
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