6/27★Sometimes I borrow the power of ChatGPT 第127

 FX Automated Trading, the EA developer Reiwa’s Double-Eye.

Since last year I’ve been writing this series aiming for a daily post.

I think I’ve managed to continue for almost a year now!

If you read what I’ve written so far,

I’m confident you’ll move closer to better EA operation.

And since I’d like to take a short break,

I’ll continue posting by leveraging the power of ChatGPT.

Occasionally I’ll post irregularly, as before.

【If the EA is performing poorly, the market environment may be the cause?】

Hello.
FX automated trading, EA developer Reiwa’s Double-Eye here.

The EA isn’t performing well…
In such cases, people tend to first suspect that the EA itself is at fault, but
the reality is that the “market environment” often has a strong influence..

Today I’d like to clearly explain how to view the market to understand how it affects EA performance.

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■ Many EAs are designed not to go against the trend

First, as a fundamental premise, please remember that
**Most EAs in circulation are “trend-following” types.**

That is,

• When there is a clear market direction (a trend) → the EA performs well

• When the market lacks direction (a range) → the EA performs poorly

This is the characteristic.

Therefore, when the market is directionless,
there are more frequent phenomena like

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■ When does a directionless market occur?

So, in what situations does directionlessness occur?
One representative cause is monetary policy of various countries.

For example,

• If rates are hiked, the currency of that country tends to strengthen

• If rates are cut, the currency tends to weaken
  
  

This is the basic relationship between interest rates and exchange rates.

However,if Japan and the United States both raise rates at the same time,
in that case, the “Japan-US interest rate gap” itself doesn’t change much.

In other words, the direction of “which currency becomes stronger” becomes unclear,
and as a result trends become less likely to form.

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■ Investors move by “anticipation”

Furthermore, even before policy announcements
institutional and large investorslook at important economic indicators and

• which country will raise rates next?

• when is the timing?
  
  

and they move with these insights by making a “look-ahead” decision.

Therefore, in situations where the future is unclear,
the entire market tends to hold and range markets can persist for longer.

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■ Directionless market tends to make EA perform poorly

In such conditions,
EAs that trade without going against the trend (i.e., many EAs) inevitably
enter a period where they perform poorly.

However, it’s not that the EA itself is bad,
it’s a compatibility issue with the market.

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■ What I consciously consider in my EA development

My EAs are designed to adapt to various market environments, including
such things as “interest rate policies” and “market direction uncertainty.”
to ensure flexibility.

Of course, no EA can perfectly match every market, but
even just understanding “why it is underperforming” helps you operate without rushing.

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■ Summary

• Most EAs are designed to follow the trend

• Uncertainty in monetary policy creates directionless conditions

• If no trend appears, EA tends to underperform

• Often the cause of underperformance is the market environment, not the EA

As you gradually gain the skill to read the market,
your relationship with EA will become much easier!

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Going forward, I will continue to clearly share about the relationship between the market and EA on the blog, so please keep checking.

See you again!

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【Flow from starting EA to intermediate level】

First, mastering the installation of the EA is essential.

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MT4 EA (Expert Advisor), installation procedure for indicators

https://www.gogojungle.co.jp/post/1/8212

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※GogoJungle video version※

At first you won’t understand everything at once, and some people will stumble.

I also stumbled many times initially, so stay calm!

If you have questions, there is a “contact form,” so please use it!

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■ GoGoJungle “Contact Form”

https://www.gogojungle.co.jp/inquiry

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【How to choose an EA】

Now that you’re ready to operate an EA,

you might be thinking, “I don’t know which EA can win… I don’t want to lose…”

Therefore, Reiwa’s Double-Eye has published articles so you can assess via

“backtesting” to some extent.

I’ve continued with the following articles in the series.

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■ How to find a winning EA from backtesting

https://www.gogojungle.co.jp/finance/navi/series/1714

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Forward testing is important, but

backtesting underpins it.

Often the backtest period is longer than the forward period, and

whether you happened to win in forward testing can be inferred by mastering backtest evaluation.

【How should I handle EA risk management?】

And no matter how excellent an EA seems,

if you neglect risk management, FX will collapse.

Thus for EAs how to manage risk?

This is answered in the following article.

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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, for long-term continuation of EA operation, the “EA operation mindset” is important as well.

Those articles are noted below,

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12/30★ End of year and New Year SP!! All about EA – Part 3

https://www.gogojungle.co.jp/finance/navi/articles/80551

8/12 [Obon Holiday Special! ] You too can become an EA master! “Mindset for Improving EA Operation”

https://www.gogojungle.co.jp/finance/navi/articles/72829

8/17 [Obon Holiday Special!] You too can become an EA master! “Notes during EA operation”

https://www.gogojungle.co.jp/finance/navi/articles/73797

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That said,

the content is quite substantial and important, so

even if you don’t understand it right away, please make sure to read it!

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【Reiwa’s Double-Eye EA Listing】

https://www.gogojungle.co.jp/users/112481/products

Specifically categorized Reiwa’s Double-Eye EA by genre

https://www.gogojungle.co.jp/finance/navi/articles/67162

(Diversification by genre is essential when building a portfolio)

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【Reiwa’s Double-Eye Series Articles】

https://www.gogojungle.co.jp/finance/navi/series/1700

“About calculating EA risk management”

https://www.gogojungle.co.jp/finance/navi/articles/64703

【Portfolio Edition】 About calculating EA risk management

https://www.gogojungle.co.jp/finance/navi/articles/65978

https://www.gogojungle.co.jp/finance/navi/articles/64738

https://www.gogojungle.co.jp/finance/navi/articles/65619

■ How to find a winning EA from backtesting

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

■ Reiwa’s Double-Eye “Push Buy on Dips / Sell on Rallies Logic” now released!!

https://www.gogojungle.co.jp/finance/navi/articles/65010

https://www.gogojungle.co.jp/finance/navi/series/610

【Reiwa’s Double-Eye’s Beliefs】

Develop EA by proper methods,

be loved by more people,

and maintain a long-lasting WIN-WIN relationship,

aim to revitalize the EA market and raise literacy.

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