Sometimes I borrow the power of ChatGPT, number 93
FX Automated Trading, EA developersReiwa's Double-E is.
This serialization has been written aiming for daily posts since last year.
Probably have continued for nearly one year now!
If you read what I have written so far,
I am confident you will move closer to better EA operation.
And, since I’d like to take a short break,
I would like to continue posting with the help of ChatGPT.
Occasionally, irregularly, I will post as I have done before.
FX automated trading, EA developers, Reiwa's Double-E.
I will talk about the large price movements that occurred on April 29, 2024.
After USD/JPY suddenly broke through 160, it dropped rapidly to the 154 range due to intervention (or movements thought to be intervention).
When such large price moves occur, the market tends to be turbulent for a while, and
many people wonder whether to run their EAs.
So this time, from the EA developer's perspective,
I would like to share general ideas on “which EAs to operate and which to stop.”
Conclusion: EAs to be careful with during large price moves
First, in short, in situations where large price moves are expected to continue, the following EAs require caution:
- EAs with many TP (Take Profit) and SL (Stop Loss) settlements
- EAs without backtests from the 2008 Lehman crisis
- A decision to stop all operations when past interventions differ from current conditions
I will explain each in detail.
1. EAs with many TP/SL settlements
EAs that frequently settle at TP or SL are often only effective in specific market environments.
For example, some markets respond to a 10-pip TP, while others do not.
When developing EAs,there are often logics where a 3-pip TP yields a clean, steadily declining performance.This shows that as volatility changes,the market environments an EA excels in vs. where it struggles become very clear.
In other words, as volatility changes,
the EA’s strengths and weaknesses become sharply differentiated.
When large price moves are expected, such EAs should be temporarily paused or carefully evaluated for market compatibility.
2. EAs without backtests from the Lehman crisis
Next, pay attention to whether the EA has no performance record durable enough to withstand big moves like Lehman.There is no reference data on how it would perform during large moves like Lehman.
The Lehman period (2008) had very large price movements, and how it performed then is an important reference.
If there is no backtest from that period, it is unclear whether the EA can truly endure big moves.
There may be a possibility that such EAs withholds backtests for inconvenient reasons.
If it were me, I would not want to use such an EA as it would feel unsafe.
3. Stop all when intervention conditions differ
Lastly, market movements during interventions can deviate from past patterns.
Therefore, when past interventions differ from current conditions, stopping all EAs is a viable option.
For example,
- Difference between USD-buying interventionYen-buying intervention
- Whether multiple central banks intervene together or sequentially
- Intervention timing (morning hours, fixings, US/Europe hours)
- Whether price moves are abrupt or gradual
- Whether intervention is signaled with decisive action or is stated without comment
Intervention can take many forms, and market movements differ in each pattern.
With this in mind, it is prudent to make EA operational decisions accordingly.
In particular, if past interventions and patterns differ significantly, pausing EAs for a while can help mitigate risk.
Summary
【Flow from starting EA to intermediate level】
First, mastering EA installation is important.
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MT4 EA (Expert Advisor) and Indicator installation procedure
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 many people will stumble.
I also stumbled many times at first, so just take your time and you’ll be fine!
If you have questions, there is a contact form you can use!
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https://www.gogojungle.co.jp/inquiry
【How to choose an EA】
Now that you think you can operate an EA,
you may worry, “I don’t know which EA will win… I don’t want to lose…”
Therefore Reiwa’s Double-E has
“backtesting” to help gauge quality,
and the following articles were serialized.
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https://www.gogojungle.co.jp/finance/navi/series/1714
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backtesting underpins it.
Backtest duration is usually longer than forward period, and
whether you win forward by chance can be approximated by mastering backtest evaluation methods.
【How should EA risk management be handled!?】
And no matter how excellent an EA seems,
FX collapses if risk management is neglected.
So for EAs how should risk management be handled?
The following article answers that.
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■ About calculating EA risk management
https://www.gogojungle.co.jp/finance/navi/articles/64703
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【EA operation mindset is also important】
And, to sustain EA operation long-term, the “EA operation mindset” is also important.
Regarding 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 too can be an EA Master! “Mindset for Improving EA Operation”
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
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So
the reading is substantial and quite important,
even if not immediately understood, please make sure to review!
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【List of Reiwa's Double-E EA offerings】
https://www.gogojungle.co.jp/users/112481/products
Specifically, categorized EA by genre for Reiwa's Double-E
https://www.gogojungle.co.jp/finance/navi/articles/67162
(Portfolio diversification across genres is essential)
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【Reiwa's Double-E serialization articles】
■ EA Beginner’s Course
https://www.gogojungle.co.jp/finance/navi/series/1700
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About calculating EA risk management
https://www.gogojungle.co.jp/finance/navi/articles/64703
https://www.gogojungle.co.jp/finance/navi/articles/65978
Tips to spot fraudulent products (in the context of EA)
https://www.gogojungle.co.jp/finance/navi/articles/64738
Where to check first when you have questions about EA
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 in a straightforward way,
gain the support of more people,
maintain a long-term WIN-WIN relationship,
aim to revitalize the EA market and raise literacy.
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