7/29★Sometimes I borrow the power of ChatGPT, the 139th installment【In fact, the story that “high leverage” isn’t that necessary.】

FX Auto Trading, the Reiwa Double-E is.

This series has been written with the aim of posting every day since last year.

We’ve probably continued for almost a year now!

If you read what I’ve written so far,

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

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

I would like to continue posting with the help of ChatGPT.

From time to time, I will post as before, irregularly.

In fact, high leverage is not that necessary.

Hello, this is Reiwa no Double-E.

When it comes to FX, there’s a common image of “leverage = magic weapon.”
Especially when you see ads like “maximum leverage of 1,000x for a live account,”
some people might think, “With a small amount of money, I could strike it rich!”

But,
from a risk management perspective, if you calculate calmly, high leverage isn’t actually that necessary.

■ Leverage increases do not reduce drawdown

This is the most important point.

Indeed, with higher leverage, the required margin goes down.
But the market drawdown (the maximum loss) does not decrease.

This is a critically important fact.

■ The calculation of “minimum required funds”

As an example, let’s consider USD/JPY at 150 yen per dollar with 0.1 lot trading.
Suppose the EA has a maximum drawdown of 40,000 yen,

the required funds would be about this much.

Leverage Required Margin Maximum DD Minimum Required Funds
25x (Domestic retail account) 60,000 yen 40,000 yen 100,000 yen
50x (Domestic corporate account) 30,000 yen 40,000 yen 70,000 yen

In other words, increasing leverage does not dramatically reduce the required funds.

＜＜Reference＞＞
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■ About “EA risk management calculation method”
https://www.gogojungle.co.jp/finance/navi/articles/64703
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Leverage	Required Margin	Maximum DD	Minimum Required Funds
25x (Domestic retail account)	60,000 yen	40,000 yen	100,000 yen
50x (Domestic corporate account)	30,000 yen	40,000 yen	70,000 yen

■ Conclusion: It’s not that “high leverage is necessary” but “fund management according to logic”

In the end,
how much leverage is appropriate?
Consider the maximum drawdown anticipated by that EA (logic),
and how much margin is required, and how much spare funds you can set aside?
That perspective is the most important.

So,
Don’t think of leverage as a magic of capital efficiency; instead, calmly view it as a means to reduce required margin,
and put safety of operation first.

“The calm not to use too much leverage”
is also a requirement to become a winner in EA operation.

See you in the next article!

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【EA Start to Intermediate Flow Summary】

First, mastering the installation of the EA is important.

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MT4 EA (Expert Advisor) and Indicator Installation Steps

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

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※GogoJungle Video Version※

Even at the start, not everything can be understood at once, and many people will stumble.

I also stumbled many times at first, so don’t rush—you’ll be fine!

If you have any questions, use the “Inquiry Form”!

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

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【How to Choose EA】

Now that you’re ready to operate an EA,

you may wonder, “I can’t tell which EA will win… I don’t want to lose….”

So Reiwa no Double-E started a series to help you by using backtests to gauge quality.

The following articles were published in sequence:

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■ How to Find a Winning EA from Backtests

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

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Forward testing is important, but

backtesting underpins it.

Backtesting periods are usually longer than forward periods, and

whether you happen to win in forward testing is something you can gauge by mastering backtest evaluation.

【How should EA risk management be handled?!】

And no matter how excellent an EA you obtain,

FX collapses if you neglect risk management.

So for EA, the question is “How should risk management be handled?”

The following articles answer that.

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■ About “EA risk management calculation method”

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

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【EA Operation Mindset is Important】

And, to continue EA operation for a long time, the “EA operation mindset” is also important.

For those articles,

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12/30 Year-end Special!! 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! “EA Operation Mindset”

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

8/17 [Obon Special!] Now you too can be an EA Master! “Notes while operating EA”

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

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With that said,

this content is quite substantial and important,

so please read it even if you don’t understand it immediately.

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【Reiwa no Double-E EA Listing】

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

Specifically categorized EA by genre

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

(Portfolio diversification by genre is essential)

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【Reiwa no Double-E Series Articles】

■ EA Beginner Course

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

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About “EA risk management calculation”

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

【Portfolio Edition】 EA risk management calculation

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

Tips to distinguish invalid products (in the case of EA)

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

Where to check first when you don’t understand something about EA

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

■ How to Find a Winning EA from Backtests

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 no Double-E “Push-buy / Pullback” release unlocked!!

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

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

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【Reiwa no Double-E’s Beliefs】

Develop EA with righteous methods,

and gain the support of as many people as possible,

maintain a long-term WIN-WIN relationship,

aim to invigorate the EA market and raise literacy.

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In fact, high leverage is not that necessary.

■ Leverage increases do not reduce drawdown

This is the most important point. Indeed, with higher leverage, the required margin goes down. But the market drawdown (the maximum loss) does not decrease. This is a critically important fact.

■ The calculation of “minimum required funds”

■ Conclusion: It’s not that “high leverage is necessary” but “fund management according to logic”

This is the most important point.

Indeed, with higher leverage, the required margin goes down.
But the market drawdown (the maximum loss) does not decrease.

This is a critically important fact.