Playing with the currencies: Gabin System | Forex Factory

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Playing with the currencies: Gabin System

  • Poll

  • Is Gabin System profitable ?
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  • #1
  • First Post: Edited Feb 27, 2018 12:53am Feb 17, 2018 2:02am | Edited Feb 27, 2018 12:53am
Hi traders
On the picture # post 2, we can see the moves of the 8 currencies during a session. The main methods to trade are to wait for a cross of 2 currencies and to take position in the good direction. Unfortunately I have never had good results because after a cross often occurs a cross in the other direction. So I have tried another method thinking that if a currency is very strong (or weak) compared to others, its move is over or almost. But I needed a good indicator to compare the strenght ( or the weakness ) of the currency compared to others. Ezios made it ...thank you.
This indicator modified by Ezios displays 2 important parameters : DeltaUp and DeltaDown.
Explanation:
Currency in 1 st position ; Value of Upper Currency (VUC)
Currency in 8 st position : Value of Lower Currency (VLC)
Average of the 7 Others Currencies : ( A7OC )
Calculation: DeltaUp = VUC - A7OC and DeltaDown = A7OC-VLC.
You understand how is calculated the strenght or the weakness compared to the 7 others currencies.
Example :
On the picture # post 3 , the upper currency is USD with 7.0.
The average of the 7 others is ( 6.6+5.9+5.1+3.7+3.1+3.1+1.4)/7 = 4.1
So the DeltaUp is 7.0 - 4.1 = 2.9....same calculation for DeltaDown.
More the Delta is high more the probability of return of the currency to others is great.
Practice:
I live in France... so the London session is perfect for me...30 mn before open until NY open...sometimes later
I set delta = 4.4. As soon as the DeltaUp or the DeltaDown reaches this value, the indicator displays the order.
If DeltaUp > 4.4, we sell Upper Currency basket. If DeltaDown > 4.4 , we buy Lower Currency basket.
To trigger the orders, there are many tools. I use Dashboard Power Meter V3 cust_Curr.
Sometimes at the beginning the market is going against us. I trigger another order at delta = 4.8 and another at 5.2.
Of course, a SL is an absolute need.
You can see another indication on the indicator... Delta 1/8.
Delta 1/8 is the calculation of the upper currency versus the lower. The good value of Delta 1/8 is 7 or higher.
In this case, the indicator displays the order. So you can trade only the pair and not the basket.
Close :
Depending your trading style. I'm waiting for a position of the currency in middle of board ( position 4 or 5 ) to close the trades.
I suggest strongly too the use of a lock tool to protect your gain ( see post # 39 )
Currently Ezios and faryne are working on an EA to automate the trades with the same trigger as the indicator and 3 levels of delta.
For instance with USD upper currency 1 st sell USD basket at 4.4... 2 nd sell USD basket at 4.8 3rd sell USD basket at 5.2.
Of course, the levels of delta can be set by the trader according his trading style ( spacing out the deltas during the periods of volatility )
If some coders want to work with us, they are welcome to improve Gabin System.

Warning
This thread is only for education purpose and you have not to go to live account.
Gabin System is a countertrend system used to catch a reversal currency move.
So it is risky especially during the periods of volatility.
The provided tools in this thread are also for testing and haven't to be used in real account.
But if you understand the logic and use Gabin System with your brain avoiding news, with good settings, a correct SL and a lock tool, you can make some decent pips regularly.
Enjoy it.
Many thanks especially for Ezios, faryne and gvc, the creator of the dashboard below.

Don't forget to leave your appreciation on the poll above
Attached File(s)
File Type: ex4 Ezios_indy.ex4   40 KB | 1,600 downloads
File Type: mq4 Dashboard - Power MeterV3_Cust_Curr.mq4   173 KB | 1,660 downloads
  • #2
  • Feb 17, 2018 2:02am Feb 17, 2018 2:02am
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  • #3
  • Feb 17, 2018 2:03am Feb 17, 2018 2:03am
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  • #4
  • Feb 17, 2018 2:03am Feb 17, 2018 2:03am
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  • #5
  • Feb 17, 2018 2:31am Feb 17, 2018 2:31am
Example of a good trade
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  • #6
  • Feb 17, 2018 3:26am Feb 17, 2018 3:26am
Quoting madscalp
Example of a good trade {image}
...looks interesting, wish you good luck !
I never lose - either I win or I learn...
  • #7
  • Edited 4:00am Feb 17, 2018 3:34am | Edited 4:00am
Quoting jdva
{quote} ...looks interesting, wish you good luck !
Thank you. The main difficulty in this system is the entry.
We need a good entry to avoid a too important DD.
So sometimes we have to add new baskets in order to average.
I suggest strongly baskets with small lots.
Syndicat, a member, tried the system this week..... IMO DD too big but good results
https://www.myfxbook.com/members/Str...ndmade/2421353
  • #8
  • Feb 17, 2018 7:17am Feb 17, 2018 7:17am
Quoting madscalp
Hi traders On the picture # post 2, we can see the moves of the 8 currencies during a session. The main methods to trade are to wait for a cross of 2 currencies and to take position in the good direction. Unfortunately I have never had good results because after a cross often occurs a cross in the other direction. So I have tried another method thinking that if a currency is very strong (or weak) compared to others, its move is over or almost. But I needed a good indicator to compare the strenght ( or the weakness ) of the currency compared to others....
@Madscalp
Nice to see that somebody is playing with currency strength numbers and devising formulas to pinpoint triggers.
My "first love" in forex was basket trading. Since a couple of years, my trading is almost exclusively based on currency strength / weakness.
Here's my take on what you propose...

First and foremost, it is important to understand that this system is countertrend basket trading, using reversion to the mean as main trigger.
I am not too sure if this is a good idea (combo of basket and countertrend).

Baskets - with the exception of USD - are comprised of 1 major and 6 crosses.
i.e. EUR basket: EURUSD (major), EURAUD, EURCAD, EURCHF, EURGBP, EURJPY, EURNZD (6 crosses).
What is the common denominator in crosses ?
Depending on what the USD is doing, once a couple of crosses start "motoring", they can get to hefty ATRs.
i.e. look at the daily range of EURAUD, EURCAD, EURJPY, EURNZD as opposed to the major (EURUSD).

Graphically, here's what the "interconnection" looks like.

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 429 KB


Back to this "motoring" thing.
You go countertrend on a EUR basket, but what if the bottom falls out and EUR tanks across the board ?
The crosses will very possibly start tanking big style (read: going against you). Not 1 cross, but mostly 3 to 4.

Now for your formula part.
Delta up, Delta down, Average Other Currencies, etc.
The currency strength meter you are using (FWIW I am using the same): 8 currencies, arithmetic mean = 4.5, the sum of the 8 currency values is always 36.
Knowing this and plugging a simple formula into Excel, it's a piece of cake to calculate your initial trigger.

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 35 KB


You will buy a first basket when the "weaker currency" value is 0.8. At that value, your delta down >= 4.2.

In terms of money management, let's assume that you have a $10K. A conservative (total) lot size for a basket would be 0.10-0.14.
Chopped up in 7 pairs that would be 0.02 lots per pair.

So, I will replay your trading scenario in slow motion.
Please bear in mind that this is not a "black swan" scenario. This scenario will play out at least once per month, but usually 3-4 times.

Friday 9 Feb.
The time you see in the screenshot of my EAs log file is your (and my) local time. GMT +1.
London opens, apparently shortly there is some high impact news on the GBP.
Nice, this is maybe going to move things a bit. Let's see what direction the market takes.

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot3.png Size: 244 KB


Took a while, but your patience is rewarded.
Three hours into the London session, at 12h14 to be precise a GBP long basket is triggered.
At that moment, GBP CS (currency strength) dips below the 0.8 value.

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot4.png Size: 197 KB


About 40 minutes later, time to open the second GBP long basket. GBP currency strength value prints 0.40

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot5.png Size: 4 KB


Still no pullback, but patience. Reversion to the mean will come, right ?

Well, about 1.5 hours after NY open, we get the six sigma event.
GBP currency strength goes below 0.1 and a third GBP long basket should be opened.

I am not going to run the drawdown numbers, but seeing that there was an additional drop >100 pips (GNPAUD, GBPCAD, GBPJPY) things look rather nasty.

Just my thought of course, but a basket of currencies in combination with countertrend trading is something that can very easily spiral out of control.
Happy (basket) trading !

LuXing
Wisdom begins in wonder
  • #9
  • Edited 9:52am Feb 17, 2018 8:13am | Edited 9:52am
Thx Luxing for your opinion...it's very precious
Of course, this system is still experimental...I forgot to say it ...only demo ..no live...no overnight trading...no trading during news (currently GBP is very volatile)
I have given a link of trades this week with 40 % profit. For me this trading is too agressive but I think that it's possible to make 1 % daily with a good management without news.
I agree with you about issues because last tuesday JPY has been very strong during all the day dropping very late.
In these cases, we have to accept a breakeven or a small loss: that's what happened.
But your experience is precious since you tell that this "black scenario" can occur 2-3 times a month.
So we need a SL. With a daily profit of 1-2 % and a SL (balance - equity) of 5 %, it's still profitable.
Once again, we have to beware of the news in London session to optimize the trading.
What's your trading approach with the currencies ?
  • #10
  • Feb 17, 2018 10:09am Feb 17, 2018 10:09am
thank you Luxing for your contribution. We will try the system in demo step by step to understand
the levels of trigger, take profit and stop loss to apply.
Preparing me to transform the indicator into ea I post a last version where i put a black
background box to hide the lines of graphic that disturb the vision of the values.
I cutt off from the input x and y axis because i want all this in fixed position.
I will continue the ea adding step by step what we need.
Attached File(s)
File Type: ex4 cm_mod_v1.ex4   40 KB | 660 downloads
  • #11
  • Feb 17, 2018 11:14am Feb 17, 2018 11:14am
Quoting madscalp
{quote} Thank you. The main difficulty in this system is the entry. We need a good entry to avoid a too important DD. So sometimes we have to add new baskets in order to average. I suggest strongly baskets with small lots. Syndicat, a member, tried the system this week..... IMO DD too big but good results https://www.myfxbook.com/members/Str...ndmade/2421353
At the moment I try to trade all signals when there is a possibility is at the computer , irrespective of sessions.
"Money makes Money"
  • #12
  • Edited Feb 18, 2018 2:11am Feb 17, 2018 1:01pm | Edited Feb 18, 2018 2:11am
Quoting madscalp
Thx Luxing for your opinion...it's very precious Of course, this system is still experimental...I forgot to say it ...only demo ..no live...no overnight trading...no trading during news (currently GBP is very volatile) I have given a link of trades this week with 40 % profit. For me this trading is too agressive but I think that it's possible to make 1 % daily with a good management without news. I agree with you about issues because last tuesday JPY has been very strong during all the day dropping very late. In these cases, we have to accept...
"this trading is too aggressive"
Yes it is. As a rule of thumb, consider 1 basket as a single trade.
For conservative lot sizing take 0.1-0.15 lots / $10K capital, aggressive lot sizing 0.2-0.3 lots / $ 10K capital.
Aggressive would be for example 0.21 lots / 7 (pairs in the basket) = 0.03 lot size per pair.
For this sort of system it is essential to control the downside (DD). Overszing / overlevereging will kill it.

"you tell that this "black scenario" can occur 2-3 times a month"
It's not really a doom scenario, but part of market behaviour. This is why martingale systems eventually crash during extended moves.
When I say 2-3 times a month, what I am really saying is that a series of correlated pairs move well beyond their 5/10/20 day Average Daily Range.
If you get trapped on the wrong side, you will have to cater for this (trade small).

"What's your trading approach with the currencies ?"
I do exactly the opposite from what this system does. That is, based on currency weakness I go short (with the trend) whilst this system would go long (contrarian) expecting mean reversion. In essence, IMHO this system could be very successful using the "right" settings.
Testing and fine tuning a system is very tedious as there are many variables with many different combinations.
A good way to narrow down settings, variables, is by taking screenshots of key numbers at certain intervals, logging data, etc.

To conclude, I will give you one important pointer.
As I said, I do exactly the opposite from this system.
Pareto rule: 80% of my system's trades are during the Asian session and the first hours of London. Very few trades after NY opens.
When should your system take the majority of trades and why ?

Look at the charts in this post
Bottom left is (a variant of) the xADR renko indicator.
If (using the xADR indicator's standard setting of 20%) room up/down is exceeded it will light up in red.
It means a pair is far up in its range and I / my EA will not trade this pair anymore because trading is about maximising possibilities.
What do you think "your" system should do ?

Hope this helps you a bit in the right direction.
Good luck.

LuXing
Wisdom begins in wonder
  • #13
  • Feb 17, 2018 3:24pm Feb 17, 2018 3:24pm
Hi luxing
I'm not sure I understood your way of trading with TMM....no matter.
I agree with you this system is a countertrend trading but when the delta is big I'm considering that the move is enough important
and that the probability of reversal seems high. Nethertheless , i agree , we need a stoploss.
If members are interested by this method, let's see their results in next days.
If they are bad, let's forget.
  • #14
  • Edited 3:42pm Feb 17, 2018 3:27pm | Edited 3:42pm
Quoting LuXing
{quote} GBP currency strength goes below 0.1 and a third GBP long basket should be opened. I am not going to run the drawdown numbers, but seeing that there was an additional drop >100 pips (GNPAUD, GBPCAD, GBPJPY) things look rather nasty. Just my thought of course, but a basket of currencies in combination with countertrend trading is something that can very easily spiral out of control. Happy (basket) trading ! LuXing
The momentum is reflected in the price. The graph is about correlation. (Nicely done, post #8) because it is my experience of its veracity. A system should be good if reflect price action, the closer to the price; the better the system. Then, no need to look for correlation. Keep it simple. If you still looking for an entry then concentrate on the graph of post #5. meaning, a filter is necessary. Now, if you decide to use the correlation you can be sure it is real. The logic of your system is very good things happens as you pointed out.
  • #15
  • Feb 17, 2018 5:43pm Feb 17, 2018 5:43pm
Quoting madscalp
Hi luxing I'm not sure I understood your way of trading with TMM....no matter. I agree with you this system is a countertrend trading but when the delta is big I'm considering that the move is enough important and that the probability of reversal seems high. Nethertheless , i agree , we need a stoploss. If members are interested by this method, let's see their results in next days. If they are bad, let's forget.
Strategy currency strength profitable and promising direction in trading. I have an Advisor who trades on this strategy.Only
manufacturing is not the basket of orders, and the individual currencies. Here's a look monitoring:

https://www.myfxbook.com/members/Str.../fx-60/2402826
"Money makes Money"
  • #16
  • Edited 1:28am Feb 18, 2018 1:11am | Edited 1:28am
Quoting LuXing
{quote} I haved named it TMM (Total Market Movement), because it is an indication for me what has happened since the open of my broker's D1 candle. Probably best to compare it to the engine temperature of a car. It is the % ATR / ADR (5 days) measured over all 28 pairs. i.e. if in a market cycle or D1 candle of 24 hrs an average of 3.500 pips is the sum of the move in pips of 28 pairs and at a given moment the ATR measured over these 28 pairs is 700 pips (thus TMM = 0.2 or 20%). What does this tell you ? That the market as a whole has moved to its...
Hi LuXing
Please could you give any examples of your strategy and your W/R ?
Many thanks.
  • #17
  • Feb 18, 2018 6:16am Feb 18, 2018 6:16am
Quoting syndicat
{quote} Strategy currency strength profitable and promising direction in trading. I have an Advisor who trades on this strategy.Only manufacturing is not the basket of orders, and the individual currencies. Here's a look monitoring: https://www.myfxbook.com/members/Str.../fx-60/2402826

Can you maybe explain this strategy a bit more in-depth.
  • #18
  • Feb 18, 2018 6:38am Feb 18, 2018 6:38am
Quoting madscalp
{image}{image}
Knowing CSM have that calculation made but not showed ( only shows arrows ) but other systems like EAX uses that approach then what is the new here?
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot_20180218-124223.png Size: 1.6 MB
Try don't lose pants never...
  • #19
  • Feb 18, 2018 6:57am Feb 18, 2018 6:57am
Quoting mankindeg
{quote} Can you maybe explain this strategy a bit more in-depth.

Post 1, post 18

https://www.forexfactory.com/showthread.php?t=532236
"Money makes Money"
  • #20
  • Feb 18, 2018 8:27am Feb 18, 2018 8:27am
Quoting Husky77
just a little thing to add on your first post -the place from where you have this dashboard. -who made it -and a bit of friendly behaviour for the original coder who created this https://www.forexfactory.com/gvc otherwise some may think at some point in your journey you can start selling something as you have the code and you can edit that as your wish.if you want i can show you few places where those free codes are for sell renamed and edited of course.thats why no more free codes for recent of those dashboards are not shared in FF....
Hi man...calm I sell nothing. These tools are available in FF. Really a big thank at the creators mainly gvc.
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