Content source: Wechat public account Huiclassroom
I heard that the rate of return on EA transactions can reach 80 to 90 percent? Many Huiyou have followed EA.
Is EA automatic trading really so delicious?
How does Huiyou generally build its own automatic trading system?
Today we will share some questions about EA automatic trading.
Is the profit of EA trading really so high?
EA trading is the abbreviation of intelligent trading system, that is, trading strategies can be automatically executed through the control of programming language. Therefore, the core of EA automatic trading is trading strategy.
The rate of return of EA trading can reach more than 80%, but we ignore another measurement indicator - the fund withdrawal rate. For accounts with high returns, the withdrawal rate is generally not low, as high as 30 to 40%. That is to say, they may set a large stop loss space, increase a large position when they follow the trend, and obtain a high profit record. But this also pushed the account to the edge of the cliff, which may blow up at any time.
An EA trading system that does not do well in risk management is not suitable for most people. Because sometimes the profit is not up to us, but the loss can at least be controlled within a certain range.
Therefore, the profitability of the EA trading system is not so high. To evaluate the quality of an EA should at least include the ability of fund management. The reason why we follow EA is that it can strictly implement our trading strategy and save a lot of time.
You can create your own trading system or buy an EA trading system on the market. Relatively speaking, the EA trading system on the market has certain risks, and its profitability is uncontrollable.
How to build an EA automatic trading system?
Any trading style can build its own EA trading system, including scalping trading and swing trading, which correspond to EA high-frequency trading and low-frequency trading respectively.
Before creating an EA trading system, you first need to confirm whether the trading platform you choose supports EA trading. Generally, MT4/MT5 is fine. If you want to develop Expert Advisors yourself, you need to learn some programming languages.
The EA trading system can be established according to the following steps:
1. Make a trading plan
For example, which markets are your trading systems mainly used for?
What is your trading strategy?
What is your target risk-reward ratio?
Only when these are clear can we proceed to the next step.
2. Design the trading system
According to the trading plan, set the trading rules, mainly to realize the trading strategy. Most of the EA trading strategies are mainly technical trading.
For example, what are the tools used to identify trends?
How to determine the timing of entry and exit?
3. Choose a risk management tool
Risk management is the core of EA trading. Although the trading system includes risk management, it needs to be listed separately because of its importance.
Good risk management combines several elements, including back testing to determine the potential maximum running loss that will not exceed your maximum risk tolerance.
4. Code to establish a trading system
After designing the trading system, you can start coding. Depending on the trading software you choose, different coding languages are used. MT4 corresponds to MQL4 language, some platforms can use Lua, ActFX language, and many ECN platforms can use C# language.
In fact, coding is only a part of establishing an EA trading system. If you do not understand coding, you can find technical personnel to cooperate.
5. Perfect backtest
After the EA trading system is established, it must be backtested with historical data. Problems found in the backtest can be improved until the EA has no problems and can achieve your goal.
When using EA trading, you need to continue to observe the initial trading. Historical static data backtesting is different from market dynamic trading, and there may still be a series of problems at the beginning.
Most EA trading systems are automated trading systems based on technical aspects, so when there is a major market, attention should be paid to avoid using EA trading.
How to evaluate the quality of an EA trading system?
First, the basic conditions must be met:
No obvious code loopholes;
Clear execution of trade entry and exit;
Fund management can be effectively implemented;
Some publicly available EAs have decompilation protection to prevent hacking.
Then on the data indicators:
The profit-loss ratio is at least greater than 1, ensuring that it can be profitable under stable conditions;
The maximum drawdown (that is, the maximum loss you may suffer since the last high point) should be within your tolerance;
The risk-reward ratio should be in line with your risk appetite;
In short, we can't just look at the income, the retracement rate is an important reference.
The above is today's sharing. The original intention of EA trading is to improve the efficiency of traders to make money. Whether you make money or not mainly depends on the trading strategy, so don't worry, it will not be too late to build your own EA automatic trading system when you start to make stable profits.
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