that is an arbitrary number. It calibrates the amount in dollars at which the group_grab_profit (when oscillation swings in your favor) and the group_stop_loss (when the oscillation swings against you). I think the group_stop_loss is 3-times the group_grab_profit and both of those are calibrated with that arbitrary number.
Some background information: The FR system pits two, inversely related currencies against one-another. The net/sum profit-loss of those two groups should (theoretically) hover around zero net profit/loss (since the two should cancel each other out). This (again theoretically) is supposed to allow you to accrue interest at the Forex rates. Also, those (hopefully muted) fluctuations are going to oscillate both in your favor and out: The FR theory holds that you should clip-off the tops of those oscillations (grab Profit) and bear the dips until a certain threshold (stop_loss). My theory (Not FR) was that if you are willing to tolerate dips into your principle (Balance) at 3-times the point at which you wanted to take your profit (3:1) then you would have an optimal risk-reward ratio.
The problem was that using different Leverages, Starting Balances, Lot Sizes and the margin you wished to trade with made those numbers (Group_grab_profit/stop loss) too small or too large at times (for my taste). I also considered that others have different tastes... so I made that profit_factor number. I had intended to abstract that value to a more meaningful, more applicable value... but never got around to it.
Feel free to figure out what that arbitrary factor really relates to and rename it or find another way to calibrate that issue.
Thanks!
Some background information: The FR system pits two, inversely related currencies against one-another. The net/sum profit-loss of those two groups should (theoretically) hover around zero net profit/loss (since the two should cancel each other out). This (again theoretically) is supposed to allow you to accrue interest at the Forex rates. Also, those (hopefully muted) fluctuations are going to oscillate both in your favor and out: The FR theory holds that you should clip-off the tops of those oscillations (grab Profit) and bear the dips until a certain threshold (stop_loss). My theory (Not FR) was that if you are willing to tolerate dips into your principle (Balance) at 3-times the point at which you wanted to take your profit (3:1) then you would have an optimal risk-reward ratio.
The problem was that using different Leverages, Starting Balances, Lot Sizes and the margin you wished to trade with made those numbers (Group_grab_profit/stop loss) too small or too large at times (for my taste). I also considered that others have different tastes... so I made that profit_factor number. I had intended to abstract that value to a more meaningful, more applicable value... but never got around to it.
Feel free to figure out what that arbitrary factor really relates to and rename it or find another way to calibrate that issue.
Thanks!