DAY 12: Criteria for Choosing Multiple EAs — Distinguishing Logic Duplication and Compatibility

Last time, we talked about the benefits of combining multiple EAs and how choosing logic with low correlation can diversify risk.
This time, let’s focus a little more on the “points to look at when choosing multiple EAs.”
Even with the same type of EA lined up, there are cases where the effect is weak, or conversely where using multiple EAs increases risk.

Should we avoid logic type duplication?

It isn’t possible to say outright that duplicates should always be avoided, buthaving several similar logics running at the same time increases the risk of stall at the same moment.

1. Are you relying too much on the same technical indicators

   • Example: all EAs are entering based on the same indicators and conditions, such as moving average crossovers or RSI

   • Since they react to the same signals, profits and losses are likely to skew in the same direction.

2. Are you biased too much toward the same time frames or methods

   • If all are short-term scalping or all are mid-to-long-term trend-following, depending on the market environment you may see a high likelihood of a string of losses.

The original purpose of combining multiple EAs isto have different specialties complement each other.
Excessive duplication reduces diversification effects, so be careful.

The combination of currency pairs is also important

As mentioned in a previous article, the correlation of currency pairs is an important factor in stabilizing EA operations.
Even if you use multiple logics, if you concentrate on the same currency pair (for example, only USD/JPY), you’ll be more influenced by movements unique to USD/JPY.

• Pay attention not only to major currency pairs but also to cross pairs and minor currencies
  Of course, minor currencies can have wider spreads, which may increase backtest costs and risk.
  However, if you achieve a certain level of diversification, the overall profit curve may stabilize.

• Be aware of currency-pair-specific volatility
  EUR/USD tends to have relatively narrow spreads, but there are periods when trends are hard to emerge.
  Pound-related pairs move a lot and are suitable for breakout-type logics, but can also experience sharp rises and falls.
  Understanding these features and combining logics and currency pairs effectively can be advantageous.

Strategies to prevent concentration of losses

When running multiple EAs, if all EAs start holding positions at the same time, a sudden adverse move can cause losses across the board.
Therefore, it is important to consideradjusting operating times and maximum number of positions.

• Stagger operating times
  For example, one EA can run mainly during European hours, while another targets scalping that thrives in Asian hours, shifting the time window.

• Set a maximum number of positions per EA
  Depending on the logic, there may be times when an EA holds multiple positions.
  If all EAs pile up positions at once, it can squeeze margin and increase the risk of unexpected margin calls, so consider position limits per EA.

How to test logic compatibility

1. Understand single-backtests
   First, backtest and forward-test each EA individually to understand win rate, drawdown, and favorable market conditions.

2. Virtual aggregation of periods and currency pairs
   In software or Excel sheets, you can aggregate the backtest results of multiple EAs to create an asset curve.
   This helps you see when drawdowns overlap and when a favorable market occurs.

3. Run small-lot forward tests
   Virtual aggregation alone won’t show everything—things like simultaneous entry frequency and real spread impact become apparent. Start safely with small, experimental live testing to gain confidence.

Today’s summary and a peek at next time

• When combining multiple EAs,be careful that logic and currency pairs do not overlap too muchand watch for high correlations

• By adjusting operating times and maximum positions per EA, you can distribute the risk of concentrated losses

• In addition to single-entity testing, verify the combined asset curve of multiple EAs and conduct small-lot forward tests to thoroughly assess compatibility

Next time (DAY 13), the theme will be “EA operation and money management — focusing first on loss avoidance,” where we will discuss from an EA operations perspective the essential question of how to protect and grow funds.
This content also relates to capital management when combining multiple EAs, so please look forward to it.

Introduction of EAs I sell

When considering multiple EAs, I would be glad if you also take a look at the EAs I sell.
https://www.gogojungle.co.jp/users/147322/products

Combine logics, operating times, and currency pairs to imagine building a stable portfolio.

In the next article, we will delve deeper into a topic that is arguably the most important in EA operation—money management.
Please press “Read more” and continue learning together.