A Watchman’s Day — Set the nets in the evening and tidy them in the morning
Serial Yoko and Kenji's GOLD EA Mastery Notebook Part 8
Hello, this is Yoko.
Last time, we discussed two specifications of the Golden Guardian: “stop loss of 15 pips per occurrence” and “hold a maximum of 2 positions per day.” This time, we will talk about how the guardian spends a day.How he spends a dayis
“People might wonder what a low-transaction EA does in everyday life.” The Guardian is a EA that “casts a net in the evening and cleans up in the morning.”This EA.
First, the conclusion
・In the evening around 18:00, place stop orders to buy at the previous high and sell at the previous low
・If it does not breakout,the next morning around 5:00, delete those stop orders.
・With a maximum of 2 positions and no averaging down,it is an EA that hardly competes for funds with other EAs.
Guardian’s day
The Guardian does not monitor a 24-hour chart to dive into the market. The daily flow is very simple (times are approximate in Japan time).
① About 7:00 in the morning: the daily candle closes
The previous day’s high and low are determined.
② About 18:00 in the evening: cast the net
Place stop orders to buy at the previous high and sell at the previous low. The price will only execute when it moves beyond the previous day’s range.
③ If it breaks through, enter
Stop loss is 15 pips (1.5 dollar width). As profits begin to appear, the stop loss position is moved by trailing.
④ If it does not break through, delete around 5:00 the next morning
Unfilled stop orders are deleted the next morning. Orders are not carried over to the next day.
In other words, the Guardian is an EA that “only gets on when it jumps out.” On days when it does not breakout, it does nothing, leaves no orders behind, and waits for the next evening.
Also, on Friday nights (around 3:00 a.m. Saturday), all positions and orders are cleared, and the weekend is not carried over. It is休業 (休み) from December 15 to January 10. Around 30 minutes before and after major US economic indicators, we refrain from placing new orders.
Do not carry orders over
④ “Delete the next morning” is subtle but an important trait of the Guardian.
Stop orders are placed based on the market judgment at the time they are placed. If they remain the same for the next day’s market, you may end up holding positions based on an old judgment when the market has changed. The Guardian isdesigned to settle that day’s judgment within the day.
Therefore, on days with no trading, it is not a “day when nothing happens,” but a “day when nothing happens because the conditions did not align.” The Guardian’s low trading is not a malfunction but the result of this design.
Difficult to compete for funds with other EAs
Another feature is,“not competing for capital”.
| Guardian | Averaging-down EA | |
|---|---|---|
| Positions held | Max 2 | Increase according to market |
| Maximum loss per trade | Target 15 pips for stop loss (prices can spike at news releases and exceed) |
Not predetermined in advance |
| Required margin | Can be roughly read in advance | Can expand depending on the market |
Since the Guardian holds at most 2 positions and has a fixed loss target per trade,you can roughly estimate the required margin in advance. There is no creeping drawdown that gradually eats up your account余力.
Estimate of required margin(Gold 1 ounce = $2,700, $1 = 155 yen, account with leverage 1000x)
・Margin required to hold 0.1 lots (10 ounces) one unit: about $27 =about 4,200 yen
・Guardian sometimes holds up to 2 positions long and short at the same time, so a safe amount to monitor is double that, about $54 =about 8,400 yen
With this level of money, adding Guardian to the same account that runs a averaging-down EA does not significantly strain the account’s overall free margin.
Therefore, from the perspective of an account already running an averaging-down EA, there is little worry that Guardian will deprive the account of its reserve. It is designed so that adding Guardian does not unexpectedly reduce the maintenance rate of the averaging-down EA beyond expectations.
However, two things to note.
・Even if you add Guardian,the unrealized losses and maintenance margin on the same account are combined.“Not easy to compete for funds” does not mean it has no influence.
・Guardian trades both buy and sell. Some days move in the same direction as the averaging-down EA, and other days in the opposite direction. If in the opposite direction, unrealized losses may not be fully offset.It does not become safe just by combining them.Please examine your own account’s available margin and try with a smaller lot to verify.
Even the time not to touch is part of the strategy
The Guardian has 1596 trades in 12 years of backtesting, about 10 per month. On days when the market is calm, there is little movement.
This can be a source of both “discontent” and “reassurance.” For those who want to trade every day, it might feel lacking. Conversely, for those who don’t like the stress of daily drawdowns,days of doing nothing can be a source of reassurance.
Yoko’s remark
When people think of EAs, they imagine “always moving.” But Guardian is an EA that properly includes “days when it does not move” in its design.
Cast the net in the evening, tidy up in the morning. In this repetitive cycle, it only rides along on the days it breaks out. It may not be flashy, butit is a very easy-to-understand EAin terms of what it is doing.
Next time preview
Next time, Kenji will share a story that he is a bit excited about.
We have added the ability to read economic indicators calendar into CSV and verify the effects of filters in backtests. We will publish various backtest results and share our analysis and usage suggestions.
Thank you for reading until the end.
Yoko
Products introduced this time
View the sales page for Guardian of Gold ▶※This article presents past verification results and does not guarantee future profits. Investment decisions should be made at your own risk.