EA portfolio for retirement

Starting this thread to note down my plan to use EA portfolio for retirement target to retire by age 50 (5 years early than general retirement age of 55). Why I am intending to use EA for trading instead of manual trading. Firstly, i have family commitment and would like to spend the time with my family after the full day working. Secondly, can get rid away of greed, fear and negative emotions during trading. Although I admit that some manual trading is better performance than EA trading, because EA has to be precise and systematic. However, I am willing to compromise the return.

I am aim for 10% return consistently per year and with minimal drawdown. I like to do financial planning for myself especially for my retirement, this is very important especially in competitive environment in Singapore. Mid-life career crisis (45-55) is pretty normal. Although I have been experience 2 big losses in forex trading, but I have faith and confidence to treat forex as business, can even then pass to my daughter for her future wealth creation. What I plan is I'll put up a capital every year (about $28k) with the expected return of 10% per year, which I think is reasonable in forex trading world, together with compounded return and no withdrawal, then amount will reach about $755k at age 51. This amount can sustain my wife and myself with about $3k per month expense from age 51 to 85.

I have a strategy have been using few years ago, and the slightly more than usual drawdown and consecutive losses (>10) which make me think its not working anymore. I restarted again last July and code it myself into EA, and continue to backtest back to where I stop trading. 2015 marks +40%, 2016 marks +3% (which I stop trading somewhere in June) and 2017 marks 38.4% (which I restart in July), the number consists both back-tests and live trading. (Guess some of you will think only 3 years of back-test is sufficient? I don't wish to argue this topic over this thread).

For the above EA, I have no clue when should I stop trading for that year at which drawdown level, although I know my EA has only 38% win ratio and reward: risk ratio is 2:1. I have checked some websites about the relationship between 38% win ratio and drawdown level (from highest level), it stated can be as high as 25%. And then I keep thinking surround this challenge e.g. what happen if I only hit this issue only in my retirement age and I am depending solely on this EA to generate income for me. Suddenly few days ago, I got the "AHA" moment after keep reading books which relate to trading, investment and retirement, and I can achieve the retirement wish with list of different style of EAs to form a EA portfolio.

This is how it works. Assuming I have 5 EAs comprises of different strategy and $20k at the beginning of the year. I'll allocate 20% ($4k) for each EAs, usually I will open sub-account under same broker to better manage and track, journal and monitor the performance of each EA. And I have also set the stop-trading trigger point where the cumulative loss of the particular EA hit 10% of beginning capital of $20k, which is $2k. As the 5 EAs comprises of different strategy, likelihood of all EAs hitting the stop-trading trigger point is quite low. The criteria of selecting the EA into the portfolio must at least hit 10% return and highest loss from the backtest didn't more than 10%. So if 3 out of EAs able to meet the minimum of 10% return per year, then it's able to meet the requirement of generate 10% return per year at portfolio level.

Besides the first EA I mentioned above, I also started live trading small on CCFp EA (thanks to @forexpinbar and @Xmess), you can find out more from below:
https://www.forexfactory.com/showthread.php?t=635569
As the trade is based on weekly basket trading, will confirm to put this EA under my EA portfolio, will confirm after 6 months of forward testing. Will update on weekly basis about this strategy.

At the same time, will continue to look for other 3 profitable strategies and EAs. If anyone of you have the similar mindset like mine, welcome you to join my thread, and we can grow together.

January 2018 has ended, updated the portfolio results and the progress to add in more EAs into portfolio:

EA 1 (live testing based on $8000): negative 1.7%
EA 2: CCFP (live testing based on $2800): up by 4.6% (will monitor till end of June 2018 to decide to increase it)
EA 3: just deploy last Friday (will monitor till end of June 2018 to decide to increase it)

Potential EA 4: Pinbar EA from https://www.forexfactory.com/showthr...0#post10739730

Besides, will also try one manual trading strategies with minimal commitment required.

EA 1 has been suffered negative 3.6% from the capital last Friday, although have mentioned in post 1 will automatically set threshold of 10% as "stop" which has another 6.4% to go. Psychological has started into the mind and some down feeling has begun. Lucky and unlucky, i am using EA which it doesn't care about my feeling and it will continue to trade on Monday. If I am trade manually, which I think the negative feeling/psychological will have some effect on the decision. Hopes to have better week and months!!

hi, happytrade, if posssible, can you link your eas test performance via mql5 site?
so we can analysis those ea perfomance.

hi merlin, thanks for dropping by. i wish i could link via mql5 website, but first i dont know how and secondly the same account i will load with different EAs, so the performance is mix, and i maintain it in google sheet. reason why i mix the EAs in same account, i dont need to full load the capital. for example, suppose i have 2 EAs, by right i need to load 40% of the capital, but combine in one account, i can then load only 20% of capital first, assuming each EA can help to smooth the equity.

your thoughts?

how long you have been trading? which stage of trading are you now?

i have been trading 3 years ago, nearly all kinds eas and methods tested. finally i stick to price action trading. currently i creat and modify ea to fit my trading style. but it still a long way to go. but i see the hope and future in it. what i can say, if you have solid strategy and good money management, you can be earn money in forex . of course , this will take a long time .but some people will be luckily to find his or her way in forex . but others maynot be.

A worthy topic, and one that usually neglected one, that most choose to concentrate on short term goals, and not consider the bigger picture.

Like that your target numbers are very doable, and that there is no need to push too hard for it, and suffer larger drawdowns.
Like that you plan to diversify between couple approaches.

A few notes for thoughts:

With 3k a month withdrawals, you won't need to wait till 755k to never run out of money if you average 10%/yr

You not mention, but I would urge you to work on the angle to diversify amongst brokers, preferable with larger capital. No point to diversify using different EAs, but the broker default or wrongdoings risk is not tackled.

If you keeping low risk/low return, a slight multifier of risk ( not too high!!!) and keeping bulk of money in interest bearing account ( higher the better) could boost your bottom line, if you likely will only use to take positions only with a fraction of your equity...after x% dd on EA, it isn't too difficult to top account up. But having 10k equity for an EA that makes or lose 10-20$ a day, isn't really necessary, and wasted interest income as well added risk ( usually broker's guarantee of funds not equals bank's)

Thanks for dropping by P.
you have mentioned a risk I recently worry about which is broker default risk. Yes, when account is growing big enough, I might eventually using similar EAs portfolio to replicate in one/two/three reputable brokers.

Assuming, I have 5 EAs into 5 sub-accounts, I thought of allocate 20% each (total of 100% capital) and each trade risk 1% of the total capital (not the 1% of the total 100% capital). Then I find i can mix different style of 2 EAs into one account, I allocate only 20% into this account and keep the 20% into interest bearing bank account to earn interest. This will require the time after the tested small live account EA perform as per back-tested first.

$3k+ per month is today value of money, by the time I am 50 and with about 2.5% inflation compounded per year, it required about $4.6k. I have tabulated the expense, expected return till age 85 (male expectancy in Singapore) with some scenario in the "Hancom" sheet.

Hi merlin, thanks for sharing the experience, i am currently at toddler stage compared to yours. Great that this thread attracts someone amazing and like minded like you to share with me. It's very fortunate to have you in my journal.

Although i have background in SQL, SAS and some Excel VBA language, am still learning coding in mql4. So the strategies I am coding and testing are very simple, like 2 MA crossing, of 2 MA direction at specific time, mixing of MA and RSI/MACD and etc. Still trying to learn more.

I am great that in FF, a lot of great people sharing their strategy for free, I can then surfing to find something that can suit me. To others, maybe they are looking for high returns, but some time they ignore the importance of drawdown or they didn't care as this point of time. But I found the drawdown is something has to be given equal or higher weight compared to return.

Sorry for my bad english and long story. Do you mind to share some strategy that is solid at least from your perspective ?

While waiting erwin to fix the bug in the pinbar EA, so I can doing backtest. I found this thread, inside bar is interesting. But I think I have to code it only to know the expectancy, drawdown, win ratio and etc.

https://www.forexfactory.com/showthread.php?t=610994

Hi,

I see.
The age 85 reference was based on your proposed 755k equity at retirement, and that since it is EA trading, there is no need to stop it in "retirement".... Is. At commencing the 10% will be 75k /year, comfortably more than the 3-4.6k per month needed...
And that by 85 you can even dip into some part of the capital without ultimately risking running out, especially if some money is earning interest on the side too.
Of course, you not mentioned your age, but assume it is like at least a 10 years away.

Well, i am open to share more. I am 34 this year, still have 16 years to reach 50 y.o.
1st screenshot is the expense calculation assuming my expense after 50 (retirement) is $3100 with yearly inflation rate of 2.5%.
2nd screenshot is the revenue assuming 10% gain from EA each year.
As you can see, the $3100 @ today money, will costs more than $10k (inflation adjusted) @ age 80.
The $3k is for the expense for my wife and myself, this amount is somehow just able to meet some basic needs. Fortunately, assuming the EAs able to generate 10% per annum, with the slight increase in the capital injection each year, I able to adjust it accordingly.

i suggest you search price channel strategy, if you know how to combine this kind strategy to working. you will be inspire .
of course, you can find any strategy which fit for you.
i do believe interest is the key point for doing forex trading. only you have interest in strategy which you like , you will have the force to improve the strategy into an perfect one.

thanks for the strategy introduce. Yes, totally agree with you, passionate and interest is the key to motivate and push me forward to learn to code although I am new to MQL4. do let me know if you decided to sharing your journey as well, hope to learn from you as well.

Today mark the end of Feb'18, time to review the portfolio.

EA 1 (MA for EURUSD) (live testing based on $8000) : negative 2.6%
EA 2: CCFP (live testing based on $2800) : up by 3.3% (will monitor till end of June 2018 to decide to increase it)
EA 3 (combination of MA and RSI for EURUSD):
(live testing based on $330) : negative 4.3% (will monitor till end of June 2018 to check against backtest)
Signal purchase (based on $2000) : up by 25% gross (yet to deduct the subscription fee)

So far, the result is mix. Fortunately the CCFP (weekly setting) is performing good.

Currently also demo testing the EA from Simple Daily Trend Reversal Trading System, thanks to mrdfx. Will demo it for 2 weeks to verify the result against the mrdfx live result, will small live test it by Mid March.

At the same time, also looking into inside bar strategy from The DIBS Method... No Free Lunch continues and Aibs - another inside bar strategy. The former at H1 TF and the latter at daily TF. Currently trying to source the code from various sources and trying to code myself, will demo test and backtest. Currently, due to some heavy work load, will taking more time to test out.

Good progress to look for more potential EA for wealth building. Green pips to all.

Today mark the 2nd of April, time to report the status of the portfolio.

This year the initial capital is $8k overall, although i have allocate smaller percentage into different EA/strategy, that's meant for testing.
So far own developed EA has suffered 3.6% (or $286), but manage to offset by other strategy/signal purchased, hopefully can achieve 10% profit(or $800).


Status of testing other strategy/EA
CCFP -> have decided to abandon it, due to consistent loss of last 3 weeks. Yet to find which time is good to start the EA.
Trend Reversal EA-> Surprisingly is good. Trend Reversal 1 is Trailing and Trend Reversal 2 is based on RR1:1, surprisingly Trailing method is better performing in past 1 month. Might decide to abandon RR1:1 testing and just focus on Trailing Method.
Inside Bar (1H) from The DIBS Method... No Free Lunch continues -> Have come out with simple EA, however, the edge for certain years is losing with various setting.
Pin Bar and EMA (Trend pullback and continue): Have come out with indicator and send me alert based on H4 and then enter trade in CMC, currently trade at very small amount, will need to monitor how it behaves. Will update again.
Neural Network predicting -> In the past 1 week has continue back the work which I temporary pause the project, currently trying to continue to forecast the channel based on high and low, hopefully to find the turning point and enter the trade. will update again.

Time flies, today is 7th May.. times to review my portfolio again.

This year the initial capital is $8k overall, although i have allocate smaller percentage into different EA/strategy, that's meant for testing.
So far own developed EA has suffered loss of 5.4% (or $437), but manage to offset by other strategy/signal purchased, hopefully can achieve 10% profit(or $800).


Status of testing other strategy/EA
Trend Reversal EA-> Thing has totally changed due to the strong trend, have abandoned the RR1:1 and focus on Trend Reversal 1 based on trailing. currently is loss of 0.5%. will monitor.

Inside Bar (1H) from The DIBS Method... No Free Lunch continues -> Have done few testing and backtesting, the drawdown is beyond my tolerate. will KIV until have new idea on backtest with lower drawdown.

Pin Bar and EMA (Trend pullback and continue)[manual]: has met consecutive of losses and affect confidence which trade to go or not. this is my weakness relying on manual judgement.

Neural Network forecasting: currently has started with small live testing. the signal is from model and manual entry.

Today is 9th june 2018, another month has passed. Time flies.
So far, the account has achieved year 2018 expected result of 10% ($800 in dollar term), anything more consider bonus to me.
All profit dedicated to the signal purchased, the risk %/trade is higher compared to others, will increase the capital next year while maintaining same lot size.
EA1 now back to positive mode, but EA2 went to negative zone, it seems this 2 EA hedging each other, that's great, this is the result I want to get. Balance the portfolio.
Will explore darwines broker investment module, anyone has experience, do share with me the experience.

KIV EA for future fine-tuning due to risk exceed the my threshold level:

Inside Bar (1H) from The DIBS Method... No Free Lunch continues

Pin Bar and EMA (Trend pullback and continue)[manual]

Trend Reversal EA-

Not updating for about 5 months now.
Have been growing a lot in terms of discipline, habit and systematic trading.
All the strategies above have hit SL threshold I set, so have stop them all. Nothing to regret, it's part of the trading life.
Right now, have been focus on 2 strategies:
1. Daily breakout with trend following (1% trade based on 7k capital)
2. H4 trend following (1% trade based on 3.5k capital)

The H4 trend following is still relatively new and have been trading for past 1 year. Surprisingly, the result is fantastic, however, I should control my greed and control and refrain myself of over trading and over expose my % per trade.

Besides the above forex trading, I also adding lower risk investments. Singapore Reits investments and SP500 ETF investments. Still all these are to achieve FIRE (Financial Independence Retirement Early). This is the buzz word is famous now.

In the past few months, also thinking about what activities will I be engaged during retirement beside the financial independence. After doing some research, will need to plan for the transition into retirement life with other activities to fill in and not sleep till any hour you want. I believe good habit and discipline is the main factor behind success.

Good day to you. Subscribed. Good luck in this endeavor. Keep up, you planned it well ahead. Hopefully you will achieve that.

Best Regards.