Overlay Positive Hedging EA

Im not so sure this cant work. If you lower the leverage. Keep the tp tight. Eventually the currency pairs will correlate again.

They will correlate again but not enough to recover the gap created previously. If the EURGBP keeps moving down/up then your gap can never close to previous levels to allow that particular trades to show a positive profit.

It all depends when you open the trades.

If it was that simple then hedge funds would be doing it constantly with 100000K contracts and distort the market. The reason they don't do it is because it is more complicated than just opening the two trades at any point in time and hoping they will close in profit when they cross again.

If it did work then brokers would widen the spread across the two trades when they figured out people were doing it.

But hey, don't take my word for it, carry on. There have been more correlation/hedge EA's and systems on FF than any other type of system over the years and nobody has ever managed to get it to work 24/7 across a trading year and shown a profit.

hedge with ea or simple hedge is not working now days.
to open and to close hedge you need to know some fundamental or technically reason behind the pairs.

I like it.

Hi gays.

Sorry for the long article but I think it important to put here. Maybe you can clarify some doubts and shed light on the problem. And maybe add new modifications to the EA

Regards.

"Forex and the Triangular Strategy unveiled ..."


Intricacies in 2006, motivated by a detailed explanation of investor Michal Kreslik a hedging strategy between Forex pairs, known as FPI (Fractional Product Inefficiency) and became fashionable among investors that market. This technique, in fact, was a long-standing way of trying to obtain excess returns with little risk in Forex, a sort of triangle pairs.

The triangular arbitrage is a Forex strategy that is theoretically a "risk free". As the name suggests, this method includes three different currency pairs simultaneously in the operation and aims to take advantage of small differences in the exchange rate, taking advantage of a market inefficiency.
In Forex, the price of a currency pair depends on the price of one or more currency pairs. The basic formula to relate three pairs with three different currencies is as follows:
(a / b) * (b / c) * (c / a) = 1
And a, b and c, different currencies.

http://blogs.advfn.com/wp-content/bl.../fpi_index.jpg

Above, a chart showing the momentary inefficiency of three pairs (EUR / USD - GBP / USD and EUR / GBP).
Possibility of arbitrage thus occurs whenever this equation does not equal 1. In this triangle we bought A / B and then buy B / C, and finally sell C / A, capturing a small profit when the equation is different from 1 . the chance of profit is maximized using brokers and margin trading with higher amounts.
For example,
a / b = EUR / USD
b / c = USD / CHF
c / a = CHF / EUR
EUR / USD = 1.3282
USD / CHF = 1.1417
CHF / EUR = 1 / 1.5166
In this case, (values extracted in 28/01) we have a difference of 2 pips than expected.
In late 2008, Daniel Fenn and Sam Howison Institute of Mathematics of Oxford, Mark McDonald and Stacy Williams Research Center Forex HSBC and colleague Neil Johnson of the Department of Physics at the University of Miami published a detailed article about the study triangular arbitrage strategy, called "THE MIRAGE oF tRIANGULAR ARBITRAGE iN tHE SPOT FOREIGN EXCHANGE MARKET".

http://blogs.advfn.com/wp-content/bl...fpi_spread.jpg

Graphs showing the variation of spreads (the real market) of three pairs studied.

In the extensive study, the researchers through various studies of seasonality, changes in spreads, duration of opportunities, the returns showed that triangular arbitrage do exist in the forex market, but the vast majority lasting for less than 1 second and are in their most, only 1 pip.

http://blogs.advfn.com/wp-content/bl...1/fpi_time.jpg

Above, variations of equation (range) triangulation pairs during the study period.

The best opportunities occur much less frequently and in periods of greater liquidity, but these opportunities are taken off the market very quickly. The study also demonstrates that the forex market is becoming more efficient, and this is explained by the increasing use of electronic platforms and automating estratégias.'
Ie, for this strategy, a lot of technology available and fast brokers.

lol

Please,

What is the function of "TradeMgmtRetry" In the current version 3.3?


Tks.

Hi,

May I know how you calculate ADR ratio between two pair?

Dear DirtyBrown. I wanna ask you, if someone wants to install any EA on the chart for some one else on his or her laptop and doesn't want to let him know about this or doesn't want to let him install the same EA further on more computers or laptops, how can I prevent this.
Thanks
Rocky

HI , why when i put the ea overlay positive hedging on BT
i see this msg ---Overlay Positive Hedging v1a- EURUSD,M5: #1: Error opening BUY order; Error Code: 0: unknown symbol
Overlay Positive Hedging v1a- EURUSD,M5: OrderSend error 4106
Overlay Positive Hedging v1a- EURUSD,M5: unknown symbol name GBPUSD for OrderSend function
and when i charge the GBPUSD ITS THE SAME ....
WHY HAPPEND THIS ONE pls help

I tested this system manually with 30 Day interval on H1 chart with EURUSD & GBPUSD.This Work.
Here are Settings -
Data settings only valid for 20 Days.After , it expires.Then you need to put indicator again.And wait for this :
Difference >=3000 Points , Buy which is low and sell which one is high.Maximum drawdown =300 with 0.1;
Replace in overlay indicator.
int _BarsCount=120;
int Day=20;//This field should be within 20 days.You can test by changing this.
int _FirstBar = 120*(Day-1);
int _LastBar = 120*Day;

Hello

is anyone still using the EA , i'm having good results on Demo accounts till yesteday the EA decided to open a long eur/usd with 220 full Lots and my account went from 100.000$ to 55000 $ , i wanted to go live with the EA but it seems there is a bug somewhere
can anyone help please

Thank you

Hi Dirtybrown,

After I download and do some testing on the EA, I have a few questions as below:
1. Is it possible to add in an extra setting that enable user to decide the different lot size (may be bigger lot size than the 1st layer) for 2nd layer entry onward?
2. I found out that this EA only close each layer entry for 2nd layer entry onward (if 2nd layer entry is open and target profit is hit, EA only close 2nd layer and leave the 1st layer entry open), is it possible to do some amendment that this EA will close all the layer (1st and 2nd layer) together when the target profit is hit?

Appreciate that who can help on this.

Thanks for your EA and hope to get your feedback soon.
Prominent88

Hello,
after many hours of testing I released the the entre of new trades (layers) has a bug. Because as it measures the gap between the actual bid and last Ask trade it open multiple layers on same price during big spread on important news or rollover. You need to creat spread filter and measure de distance from last ask to actual ask. It’s ok also for take profit trigger.

i have coded it. And the results are very different...
PS: Also don’t forget to monitor the gap and ema20 to understand the market is changing and the pairs are correlating again.

best of luck.

Hi Jorgeemec,

can you please share your coded version ?

Regards

Thanks,
Which timeframe and on which Pair should be installed?
Regards

Dirty Brown was leave us... What the reason? No one knows......

You should turn off the EA when big news happen as the correlation breaks and then wait until is normal again.

Anyone still using this EA? I have tested the EA on live account, but I experience every secon day, that the EA starts to open and close EURUSD sell orders continously - until I disable the EA. I have just experienced it again, made 70 trades within 2 minuts. The loss is not hugh, because I were sitting at my MT4, but if it has happend during night, I might have lost my 2000usd account.
Anyone experienced the same issues ? I have now added a Sleep(90000) after OrderSend(), so EA will wait 1,5 min before trying to open a new order again.
I suppose, it is marked conditions that make the EA work incorrectly or maybe interference from other running EA's on the same MT4.
Thanks