DAY 29: The final step to introducing EA — Planning and verification at startup

In the last session (DAY 28), we discussed common misconceptions and anxieties that discretionary traders tend to have when introducing EAs, and how to shift your mindset accordingly.
Today,when you decide to actually implement an EA, let's organize the necessary steps.
We have already learned about the advantages, drawbacks, and risk management of EAs, but ultimatelyunderstanding how to prepare and start smoothly will help reduce the risk of failure.

1. How to set up the initial plan

1. Operating capital and goal setting

   • Clearly decide the funds to allocate, such as “start with 100,000 yen of surplus funds” or “allocate a certain percentage of total trading to the EA.”

   • Goal setting is important as well. Having specific figures like “aim for a monthly return of ○%” or “limit losses to a maximum of ○%” makes it easier to review performance afterward.

2. EA selection and portfolio construction

   • Decide which EA to be the main one and which to keep as a sub. Even if you implement only one, it’s reassuring to have a policy such as **“include a discretionary filter in unfavorable market conditions.”**

   • If running multiple EAs, diversify currency pairs and logic types so they do not become too highly correlated.

3. Preparation for VPS and network environment

   • Since EAs operate 24/7, consider whether to keep your home PC running continuously or to rent a VPS.

   • If using a VPS, check the plan’s specs and network stability to minimize troubles.

2. Start small with forward testing

1. First, a demo account or a small real account

   • Even if a EA passes backtests with good results, real trading may involve slippage and order latency.

   • If you’re anxious, perform forward testing on a demo account for 1–2 weeks to verify that it behaves as expected.

   • If you want to operate seriously, start with a small lot size and, as you get used to it, increase the capital allocation to reduce risk.

2. Lot size management

   • Starting with high lots hoping for quick wins can magnify losses during drawdowns.

   • A common approach is to set lots to risk roughly 1–2% of capital. If you’re not yet comfortable, keeping it even lower is fine.

3. Rules for drawdowns and consecutive losses

   • Set numerical criteria such as “pause after ○ consecutive losses” or “return to validation if drawdown exceeds ○% of funds,” to reduce mental swings.

3. Verification and adjustment cycle

1. Check operation logs

   • On weekends or month-ends, review entry history, profit and loss, and drawdown to see whether it’s within the expected range.

   • If using multiple EAs, compare each drawdown and win rate to see if they cover for each other effectively.

2. Re-run backtests and forward tests

   • If market conditions have changed, use the latest historical data to run backtests and check for any major changes in results.

   • Refer to data from live operation and adjust parameters gradually. Avoid sweeping changes to prevent overfitting.

3. Appropriate introduction of discretionary filters

   • When making discretionary adjustments such as pausing around key indicators or lowering lot sizes during sharp moves,record them as you executeso you can later compare outcomes and assess whether this discretionary approach was effective.

4. Mindset — value patience and steady progress

• Don’t chase big profits from the start
  If you aim for “○% monthly return” right after EA introduction, it can breed impatience, leading to increasing lots or excessive modifications to the EA, which is risky.
  It’s wiser to accumulate small gains, build confidence, and then gradually scale up.

• Prioritize loss avoidance
  When faced with a string of losses or large drawdowns, you may want to “make up for it,” but rushing into high risk increases failure probability.
  A mindset of “first, avoid large losses” is the shortcut to long-term stable operation.

• Treat failures as learning opportunities
  When unexpected losses occur, don’t just dwell on it; analyze “what caused it” and “which parameter to adjust to prevent recurrence.”
  EAs accumulate data, so they lend themselves to a cycle of verification and improvement.

Today’s summary and next issue preview

• When starting EA adoption,quantify operating funds, goals, and risk tolerance and conduct forward testing with a demo or small real account.

• Regular reviews and small improvements will gradually increase stability,which is the path to success.

Next (DAY 30) will be themed “Summary — beyond discretion, the scenery ahead,” where we will recap the key points of EA operation learned so far and close the series.
Let’s redraw the essential merits EA offers and the ultimate image of “freedom and stability” you can achieve.

Introduction to the EAs I sell

As you consider adopting EA, please also refer to the information about the EAs I sell.
https://www.gogojungle.co.jp/users/147322/products

If you properly plan and manage risks before implementation, you should gradually see a stable trading pattern.

In the next article, as the series concludes, I will summarize “the future and essence that EAs bring.”
Please click “Read more” and join me to the end.