9/7★ Occasionally I borrow the power of ChatGPT: Episode 147 [What is the ideal funds required for 0.1 lot?] - EA Beginner Course - Navi+ - GogoJungle | Auto Trading - Market Analysis

FX Auto Trading, the EA developer Reiwa's Double-I.

This series has been written aiming for a daily post since last year.

It's almost been a year and a half of continued publication!

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 with the help of ChatGPT.

Occasionally, I will post irregularly as before.

【What is the ideal funds required for 0.1 lot?】

When you operate an EA (auto trading), you tend to look only at whether the margin is sufficient.

However, what’s truly important is not only the necessary margin, but also the maximum drawdown, and the available risk capital.Include maximum drawdown and buffer capital in your thinkingas well.

Recently I received a question like this.

「What is the ideal funds for 0.1 lot?」

In short, this isn’t a number that can be answered simply; it changes with risk tolerance.

However, if you know the calculation method, you can derive a lot size that fits you.

【How to calculate required margin】

Assumptions:

1 USD = 150 JPY

0.1 lot (10,000 units)

Leverage 25x

0.1 lot (10,000 units) is

150 JPY × 10,000 = 1,500,000 JPY (at 1x leverage).

With 25x leverage

1,500,000 ÷ 25 = 60,000 JPY.

This is the required margin per position.

Consider multiple positions

If this EA holds up to five positions at most,

60,000 JPY × 5 = 300,000 JPY is the required margin.

However, you must also add the maximum drawdown (historical loss peak).

For example, if the backtest maximum drawdown is 200,000 JPY,

300,000 JPY + 200,000 JPY = 500,000 JPY is the “minimum necessary funds.”

Why isn’t the minimum enough?

If you start with 500,000 JPY and the maximum drawdown arrives soon, you’d have only 300,000 JPY left.

You would lose 40% of your funds suddenly.

That is psychologically and operationally very hard.

Therefore you actually need a bigger cushion.

Either increase funds or reduce lot size.

Example when reducing the lot

If you halve the lot to 0.05, the maximum drawdown theoretically halves as well.

200,000 JPY → 100,000 JPY, resulting in a maximum 20% loss relative to 500,000 JPY funds.

This “how much percentage loss you can tolerate” becomes the axis that determines the balance of lot and funds.

As a developer’s perspective

Ideally, full-time traders should perform these calculations themselves.

However, I feel it’s burdensome to have part-time or beginner traders do this manually each time.

So going forward I plan to distribute a “Risk Management Simulation Sheet (Excel/Spreadsheet)”

to easily derive safe lines for funds and lot sizes.

? Summary

■ Always add maximum drawdown along with required margin

■ Minimum funds = “Required margin + maximum DD”

■ Add extra buffer funds to improve operational stability

■ Determine lot size by working backward from allowable loss percentage

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【Flow from starting EA to intermediate level】

First, mastering EA installation is essential.

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MT4 EA (Expert Advisor) and indicator installation procedure

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

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※ GoGoJungle Video Version ※

At first you won’t understand everything all at once, and there will be some who stumble, even a lot.

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

If you have questions, there is a “Contact Form” you can use!

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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 think you can operate an EA,

you might think, “I don’t know which EA will win… I don’t want to lose.”

Therefore Reiwa’s Double-I has published the following articles to help with backtesting to some extent.

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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 substantiates it.

In most cases, the backtest period is longer than the forward period, and

whether you just happened to win in forward testing can be gauged by mastering backtest evaluation methods.

【How should EA risk management be handled?!】

And no matter how excellent an EA is,

FX collapses if risk management is neglected.

So for EA, how should risk management be handled?!

This is answered in the following articles.

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■ “How to calculate EA risk management”

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

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【EA operation mindset is also important】

And, to sustain EA operation long-term, the “EA operation mindset” is also important.

For those articles,

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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!】 Now you too can be an EA Master! “Mindset for improving EA operation”

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

8/17【Obon Holiday Special!】 Now you too can be an EA Master! “Notes during EA operation”

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

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So,

the content is quite substantial and important,

even if you can’t grasp it immediately, please make sure to read it!

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【Reiwa's Double-I EA Listing】

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

Specifically categorized Reiwa's Double-I's EAs by genre

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

(Portfolio diversification requires genre variety)

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【Reiwa's Double-I's Series Articles】

■ EA Beginner Lesson

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

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On “How to calculate EA risk management”

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

【Portfolio edition】How to calculate EA risk management

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

Tips to spot fraudulent 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

■ No sugarcoating! GoGoJungle raises issues!

https://www.gogojungle.co.jp/finance/navi/series/1701

Where is GoGoJungle's inquiry form?

https://www.gogojungle.co.jp/finance/navi/articles/64723

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■ Reiwa's Double-I “Push-buy / Pull-back Sell” logic now released!!

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

■ Double-I FX anecdotes

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

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【Reiwa's Double-I's Beliefs】

Develop EA by proper methods,

and gain more supporters,

maintain a long-term WIN-WIN relationship,

aim to revitalize the FX EA market and improve literacy.

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