DAY 27: Successful and Failed EA Implementation Cases (Conceptual Only) — What are the Points That Distinguish Light from Darkness

Last time (DAY 26), we learned how to handle when EA performance declines.
Today, let’s conceptually contrast “success cases” where implementing EA yielded good results and “failure cases” where things unfortunately did not go well.
It’s not about exact numbers or charts, but rather about a close-to-imagery sense,to help you understand what factors tend to make or break outcomes.

■ Image of a successful case

A-san: portfolios of multiple EAs managed with discretionary rules

1. Preparations before introduction

   • A-san has already learned the basics of discretionary trading and understands that there are winning and losing periods in the market.

   • Based on that, they conduct thorough backtests and forward tests of the EA, verifying drawdown, win rate, and market conditions in advance.

2. Combining multiple EAs

   • Operating a portfolio that includes a trend-following EA, a range-breaking EA, and even scalping-type EAs simultaneously.

   • Since each performs well in different market environments, drawdowns are less likely to coincide, anddrawdowns are diversified.

3. Avoiding abrupt market changes with discretionary rules

   • Pause EAs before major economic indicators, and check drawdowns during重大 news events to give operations a short break, incorporating a discretionary filter.

   • This minimizes risk events of sudden surges or plunges andprevents unexpected losses.

4. Regular maintenance and fine-tuning

   • Once a month, review each EA’s performance and temporarily stop and re-run backtests if the drawdown deviates significantly from expectations.

   • Gradually adjust parameters while maintaining a balance to avoid overfitting.

   • By repeating these processes, you can secure stable profits throughout the year without large drawdowns.

■ Image of a failure case

B-san: trusted high-win-rate EA too much and suffered a big loss

1. Overconfidence before introduction

   • B-san saw an EA advertisement promoting high win rates and believed, “This will easily earn me ○○ yen per month,” purchased without much preliminary research.

   • Only the backtest was publicized; forward tests and real-world performance weren’t checked, and the EA’s logic summary wasn’t understood before deployment.

2. Overly large lot sizing

   • Thinking, “If the win rate is 90%, losses from stop losses will be rare,” started with large lots relative to capital.

   • While wins continued, mood improved and they increased the lot size further.

3. Unexpected losses due to sudden market change

   • Certain economic announcements or remarks caused the market to move sharply against the position. The EA’s stop settings were lax, resulting in a large loss on a single trade.

   • Behind a high-win-rate logic lies a “large-risk tolerance stop” that can wipe out the profits accumulated from a single loss,leading to catastrophic results.

4. Inadequate post-incident response

   • In shock from the big loss, they turned off the EA and began making haphazard parameter changes without understanding them.

   • Because they didn’t verify operation data or analyze causes and acted emotionally, they incurred further losses and gave up, thinking, “EA is no good.”

■ Points that separate success from failure

1. Difference in verification and understanding

   • In successful cases, they fully understood the backtest/forward test results and the logic outline before introducing the EA.

   • In failure cases, they believed advertising claims and bought without verifying why the results were good or what could cause them to worsen,and started operation without any verification.

2. Money management and discretionary filters

   • Those who operate stably diversify risk with multiple EAs and control abrupt market changes with discretionary rules,building profits while hedging risk.

3. Continual maintenance awareness

   • Successful people view market changes as normal, regularly verify and fine-tune to aim for long-term stability.

   • Those who fail often think, “If I buy EA, I can earn by leaving it alone,” neglect any review or adjustment, and ultimately lose big as market conditions change.

■ Today’s summary and next time preview

• EA introductionsuccess casesshow careful backtesting and forward testing, portfolio management with multiple EAs, appropriate discretionary interventions, and a mindset of regular maintenance.

• Failure casesreveal large losses caused by excessive lot sizing, misunderstanding of logic, and inaction toward indicators and market shocks, which also worsens the image of EAs.

• Key differences lie inverification, money management, and regular adjustments— three simple yet crucial elements.

Next time (DAY 28), we will discuss the theme of “Preparing the mind for EA adoption — the beliefs discretionary traders should let go of,” aimed at those who are still resistant to EA adoption or worry that it must be manual, and I will share the mindset needed.

■ Introducing the EAs I sell

When comparing cases that succeed with those that don’t after implementing EAs, you can see the significant differences in preparation and risk management.
When considering the EAs I sell, please review the backtest/forward test results and logic overview to decide if they fit your trading style.
https://www.gogojungle.co.jp/users/147322/products

In the next article, we will organize common psychological resistance and beliefs that arise when introducing EAs and learn points for a smoother transition.
Please click “Read more” to continue deepening your learning.