Portfolio Selection (USD, EUR, GBP) -- vs -- JPY

Portfolio Selection

(USD, EUR, GBP) -- vs -- JPY

Portfolio Selection

(US Dollar, Euro, British Pound) vs Japanese Yen



The feature of this product is to discover trends without going against Dow Theory and to build and settle positions in a trend-following manner.

It is a traditional expert advisor (for MT4) that adheres to various theories related to trading.

Below is an overview of the logic of this product.

While operating, the market environment is classified and judged into four modes, and high expected value positions are held in each situation..

▀ Aiming for a breakout from the "calm" where price fluctuations are small."Calm" to " Breakout scene.▂ Hunting for "price overshoots" from the mid-term trend..▃ In times of sudden market changes such as "economic indicator announcements," "currency interventions," "flash crashes," and "important person statements," immediate response is required.

⅛ The probability of avoiding major losses increases.

⛀ Empirically, positions are often switched 1 to 2 times a day, but there are also times when positions are maintained for about a week during major market movements (gaining several hundred pips).

⛀ Since the logic is influenced by the speed of changes in the market environment, the holding period of positions is generally not clearly distinguished from what is commonly referred to as "scalping," "day trading," or "swing trading." In other words, it can be said that it applies to all of them.

【Special Notes】 It is recommended to operate three currency pairs: USD/JPY, EUR/JPY, and GBP/JPY as a portfolio simultaneously.

The currencies that attract traders' attention change depending on the short, medium, and long-term perspectives.

It is also thought that this level of attention strongly influences the price fluctuation range of the respective currency pairs.

The rise and fall of major currencies such as the US Dollar, Euro, Japanese Yen, and British Pound have a higher impact on the market compared to other currencies, thus they should be closely monitored as the epicenter of trends.

Moreover, the currencies in vogue are thought to change with the seasons.

⅛ This product can operate up to three currency pairs, so its cost performance as a product is considered to be among the top.

Backtest　USDJPY　Single lot, aggregation period from 2008/1/1 to 2024/12/06

Initial margin: 1 million yen, Entry: 10,000 currency each time

Profit Factor (PF) = 1.24

Backtest　EURJPY　Single lot, aggregation period from 2008/1/1 to 2024/12/06

Initial margin: 1 million yen, Entry: 10,000 currency each time

Profit Factor (PF) = 1.14

Backtest　GBPJPY　Single lot, aggregation period from 2008/1/1 to 2024/12/06

Initial margin: 1 million yen, Entry: 10,000 currency each time

Profit Factor (PF) = 1.24

Using "Report Manager," USDJPY, EURJPY, GBPJPY　 total of three currency pairs backtest integrated asset curve

Aggregation period from 2008/1/1 to 2024/12/06, Initial margin: 1 million yen, Entry: 10,000 currency each time

Profit Factor (PF) = 1.204, Expected profit:5.35pips

⅛ As shown in the graph above,the number of trades exceeded 10,000 with an expected profit of over 5 pips, demonstrating spread resistance.

＜Details＞

⛯ Positions are basically constructed as reversal trades. If it is judged that a competitive advantage against the market cannot be secured, no new positions will be held.

⛯ Positions are not closed before the announcement of indicators from various countries, but there is a logic to respond to sudden rises and falls after the announcement, so quick settlements will be made at that time.

⛯ In recent years, during frequent "currency interventions" or unpredictable "flash crashes," profits have been made without incurring significant losses.

⛯ Even if sudden price fluctuations occur, patterns that are expected to "fully retrace" will be identified, and positions will be maintained at that time.

＜Considerations from Backtest Results＞

The backtest of this product used paid data necessary to meet the verification period of over 16 years obtained from TDS (Tick Data Suite).

TDS is evaluated as one of the highest quality data available at present.

The integrated asset curve of the three currency pairs reflects the characteristics of the portfolio and shows a stable upward trend.

Here, I would like to explain elements that users may be interested in to judge the potential of the EA.

✥ "PF" Profit Factor

⊲There are two main types of EAs: "Martingale" and "Non-Martingale."

I will omit the details, but "Martingale" accumulates unrealized losses as long as the system is running and increases the number of positions.

Then, it is a method to bring it to a positive settlement when it turns into unrealized profits that will come later.

It is basically operated on the premise of "not losing," and the PF value tends to settle around "2.0."

This method is strong in range markets, but on the other hand, it carries the risk of losing a significant amount of capital if the market extends in the opposite direction of the entry.

I recognize it as a method that resists the "Balsara bankruptcy probability" proposed by mathematician Balsara, but I also acknowledge that developers are struggling daily to overcome it.

In contrast, this product falls under "Non-Martingale," which operates with a single position or a small number of positions.

To make a profit with a non-Martingale approach, it is necessary to maintain a competitive advantage and hold positions with high expected value.

Whether following the trend or counter-trend, it continues to seek expected value.The PF value is inferior to that of Martingale, but as long as it exceeds "1.0," it becomes eligible for compound investment,

and it is possible to increase funds "like a snowball" day by day.

Please refer to the verification results below.

Backtest　USDJPY in the case of compound investment　

The allowable loss risk in a single trade (as a percentage of the margin amount, 8%)

Aggregation period from 2008/1/1 to 2024/12/06, the margin has a) increased by 31 times.

Backtest　EURJPY　 in the case of compound investment　

The allowable loss risk in a single trade (as a percentage of the margin amount, 8%)

Aggregation period from 2008/1/1 to 2024/12/06, the margin has b) increased by 8 times.

Backtest　GBPJPY　 in the case of compound investment　

The allowable loss risk in a single trade (as a percentage of the margin amount, 8%)

Aggregation period from 2008/1/1 to 2024/12/06, the margin has c) increased by 117 times.

If the above three currency pairs are operated as a portfolio, the result of this compound investment can be calculated as = a) * b) * c).

=31*8*117

=29,016

The margin has increased by approximately 29,000 times.

The famous physicist, Einstein's words are "Compound interest is the greatest invention of mankind. Those who know it earn with compound interest, while those who do not pay interest." 

I believe that the performance of this product is the solution to the multiplication of this highly advantageous money management method and highly advantageous logic.

✥ Regarding Expert Advisor Settings

⊲ When installing this product on multiple charts or currency pairs, please assign magic numbers so that they do not overlap. Any number is fine.

⊲The investment lot size is optional. For FX beginners, it is recommended to try it on a demo account or start with a small lot in a live account.

⊲ For stop loss, input three times the price of the target currency pair as a guideline. (The unit will be pips) For USDJPY, if 1 US Dollar = 100 yen, input the value as 300. If 1 US Dollar = 125 yen, input the value as 375.

This task is essential when forming a portfolio. Adjustments are necessary because the price fluctuation ranges differ for each currency pair.

It is also recommended to make adjustments when operating with a single currency pair.

⅛ For convenience, the stop loss value is set to several hundred pips, but in the program, it is mostly settled or reversed before reaching the stop loss.

⊲ When operated using the compound investment method, select "isMoneyManagement" as true in the settings,

and then input the allowable loss risk in a single trade (as a percentage of the margin amount, n%).

　Please be careful as setting n to 10 or more may pose a risk of excessive lot size in terms of money management.

　The explanations regarding "investment lot size" and "n%" above are the seller's disclaimer. Please conduct thorough backtesting and confirm safety before making your decision.

⅛ No matter how excellent an EA is, if money management is not properly conducted, the risk of failure increases.

The risk and return in investment are two sides of the same coin, so entering with excessive lot sizes is not recommended.

＜Finally＞

Thank you for reading this far.

I have something to convey to those considering purchasing this product.

In developing this product, we did not engage in easy "optimization" work.

Optimization work involves varying internal parameters when verifying logic using past data to adjust the values to yield the best results.

Excessive optimization may yield an extremely high profit factor or astonishing expected profits in the "past," but it often fails to produce the desired results in the "future," increasing the likelihood of user disappointment. This is a phenomenon known as "curve fitting," which I believe occurs when EA developers overly pursue results.

In my opinion as a developer of this product, such EA characteristics may also be influenced by the small absolute number of entries and the small number of winning trades. To measure credibility for the "future," a certain mathematical understanding based on the "law of large numbers" in probability statistics may also be necessary.

This product is obedient to market theories and is the crystallization of the blood and sweat of developers who have struggled with the difficulty of defining trend occurrences and ranges.

Without being swayed by emotions, it quietly holds advantageous positions and settles them. Since it is automated trading, monitoring a few times a day is sufficient, and the EA continuously monitors the market for 86,400 seconds every day.

I hope this product will serve as a serious and reliable partner for users.

From FXTL (Foreign eXchange Trading Labo).

Note: Please be aware that the price may change based on the number of days since the product's launch and the sales volume.