DEMO idea for a dead simple system.

Oanda has a "FX open positions" chart. I am going to open a demo account with $1,000 in it and open long or short positions based on where the ratio's currently are. If the ratio doesn't show much bias, ie 12.5% on either side of 50 then I won't open a position. I'll also close any open order if the pair slips into this zone.

There are 10 pairs and I'll be opening positions in 8 of them. I'll put a 100 pip stop loss on them all for one percent. So at worst I could lose 10 percent at one time if I had all of the currencies had open positions. I will then move the stops up as my normal trading stragey indicates.

I'll check the trade once every 24 hours and see how things go!

EUR/USD: too close to 50%
USD/JPY: long
USD/CAD: long, though this chart isn't too clear on that.
USD/CHF: long
EUR/GBP: short
EUR/JPY: long
EUR/CHF: long
AUD/USD: long
GBP/USD: too close to 50%
GBP/JPY: long

I'll open positions Monday morning my time (around 2200 GMT Sunday) and post the opening balances.

Okay, I can't resist the temptation to complicate things a little bit. I will use part of my normal system with regards to stop losses and take profits.
This means entering three contracts on each currency. All will have a 100 pip stop loss which will be set to break even when there is a whole bar clear of the entry price. contract 1 exit's at 120 pips, contract 2 will be a manual trailing stop based on price action and contract three (which normally exits on a reversal signal) will exit when it enters the "grey" zone on the ratio chart. This gives short, medium and possibly long term positions.

Prices entered at (spread was a bit high seeing as the market has only been open for an hour.
EUR/USD: too close to 50%
USD/JPY: 115.81
USD/CAD: 1.0562
USD/CHF: 1.2083
EUR/GBP: 0.6754
EUR/JPY: 157.82
EUR/CHF: 1.6466
AUD/USD: 0.8167
GBP/USD: too close to 50%
GBP/JPY: 233.69, 233.72, 233.74 (The market started moving.)

Mmmm now I've done that, I'm not sure 100 pips will be enough. We will see
I'll post gains or losses every 24 hours.

interesting thought, I will be curious to see how this turns out.....
Also note that the long - short ratios are sampled every hour, not 24 hours.

It felt quite odd entering positions in the market that didn't follow my system (even though it's only demo). I guess that's a consequence of my steadily increasing discipline as a trader.

I've decided that when these trades gets stopped out I will re enter it when I check in the morning, as if the previous trade hadn't existed.

Any other rules that I need? Can't think of any at the moment.

Interesting to see how it pans out especially that since 95% of traders losemoney, than 95% of these positions just might be wrong. There's another tool on o.a.n.d.a that shows the history of open ratios, and to me those didn't bear any relation to price change. On most pairs traders are in over 50% in the direction of the positive swap regardless of price action, even on usdcad when it was in the huge downtrend, due to positive swap on longs.
IMHO be careful and make sure you don't get tempted to overtrade (like I have in the past)... otherwise good luck

I think the rules I've set up look pretty good. This is pretty much a purely mechanical system so far so I don't think there can be "over trading" unless I break my own rules. It wouldn't be a very good experiment if I did, would it? The total potential risk of 10% is a lot higher than my live trades would ever go, but I'm only risking 1% on each currency so hopefully the demo will have time to run for a while before it goes broke (or otherwise).

I also look forward to seeing your results! Best of luck!

EUR/USD: too close to 50%
USD/JPY: 115.81 +9 pips
USD/CAD: 1.0562 -40 pips
USD/CHF: 1.2083 +8 pips
EUR/GBP: 0.6754 +3 pips
EUR/JPY: 157.82 +9 pips
EUR/CHF: 1.6466 +4 pips
AUD/USD: 0.8167 +51 pips (go the Aussie!)
GBP/USD: too close to 50%
GBP/JPY: 233.72 +20 pips

Starting balance is $1,000, unrealised profit $6, realised profit nil.

EUR/USD: too close to 50%
USD/JPY: long +57 pips
USD/CAD: long -70 pips
USD/CHF: long +23 pips
EUR/GBP: short -9 pips
EUR/JPY: long +71 pips
EUR/CHF: long +22 pips
AUD/USD: long +105 pips, first contract reached take profit for 120 pips. One whole bar is clear of the entry price, remaining contracts set to break even.
GBP/USD: too close to 50%
GBP/JPY: long, stopped out -100 pips. Still long, re entering at: 234.57

Balance 999.34, unrealised P&L 12.58, realised P&L -1.81
So far it looks pretty good. Haha, unrealised P&L just jumped $3.

EUR/USD: too close to 50%
USD/JPY: long -75 pips
USD/CAD: long -21 pips
USD/CHF: long -43 pips
EUR/GBP: short -72 pips
EUR/JPY: long -5 pips
EUR/CHF: long -31 pips
AUD/USD: long +54 pips
GBP/USD: too close to 50%
GBP/JPY: long, stopped out again, re entered 232.59

Balance 990.42, unrealised P&L -16.00, realised P&L -11.26
Not so good today

This is worth watching for a while, at least for me. Cause it's simple and that's me. Simple Bill. I like mechanical ideas.

Thanks!

EUR/USD: too close to 50%
USD/JPY: long -38 pips
USD/CAD: long -48 pips
USD/CHF: long -78 pips
EUR/GBP: short -15 pips
EUR/JPY: long +23 pips
EUR/CHF: long -26 pips
AUD/USD: long +125 pips
GBP/USD: too close to 50%
GBP/JPY: long, +94 pips, contract one hit T/P for +120 pips.

Balance 994.63, unrealised P&L -1.43, realised P&L -7.74

Looks like several currencies are about to enter the grey zone, most notably the AUD/USD.

I closed all positions some of the trades had too high a percent of exposure. The Aussie still does but I'm not interested in getting to bogged down into detail on this experiment. My real trades and going to my day job must take precedence, naturally.

The EUR/USD will be entering short while there are still several other currencies hovering near the grey zone.

AUD/USD: long 0.8225
EUR/CHF: long 1.6350
EUR/GBP: short 0.6789
EUR/JPY: long 155.56
EUR/USD: short 1.3773
GBP/JPY: long 229.14
GBP/USD: too close to 50%
USD/CAD: long 1.0569
USD/CHF: long 1.1870
USD/JPY: long 112.97

Balance 947.74, unrealised P&L nil, realised P&L -55.60

On a side note, I may have to learn the capacity of meta traders programming language. It's been well over a decade since I've coded but after reading an article on swarm intelligence I find myself coming up with ideas on how to apply it to my live trades. If you could come up with a Holy Grail method that raked in the money, would you actually use it? Think about the consequences. It would break a lot of economies and you would likely get tracked by several large government type organisations. Then they'd have the HG system...

AUD/USD: long 0.8225: +27
EUR/CHF: long 1.6350: +21
EUR/GBP: short 0.6789: -21
EUR/JPY: long 155.56: +133 with contract one taking profit at 120 pips. Set to break even.
EUR/USD: short 1.3773: -35
GBP/JPY: long 229.14: +128 as with the EUR/JPY
GBP/USD: too close to 50%
USD/CAD: long 1.0569: -48
USD/CHF: long 1.1870: -13
USD/JPY: long 112.97: +67

Balance 951.52, unrealised P&L 11.86, realised P&L -52.47

AUD/USD: long 0.8225: +109 - and is sitting on the border of the grey zone.
EUR/CHF: long 1.6350: +104
EUR/GBP: short 0.6789: -18
EUR/JPY: long 155.56: +253 with contract one taking profit at 120 pips. Set to break even.
EUR/USD: short 1.3773: -64
GBP/JPY: long 229.14: +313 as with the EUR/JPY
GBP/USD: too close to 50%
USD/CAD: long 1.0569: stoppped out, re entered at 1.0425
USD/CHF: long 1.1870: +23
USD/JPY: long 112.97: +134 contract one hit T/P for 120 pips.

Balance 951.52, unrealised P&L 52.87, realised P&L -54.66

AUD/USD: long 0.8225: +190 - Contract one has taken profit.
EUR/CHF: long 1.6350: +119 - Contract one has taken profit.
EUR/GBP: short 0.6789: -64
EUR/JPY: long 155.56: +320 - entered the grey zone, taking profit.
EUR/USD: short 1.3773: stopped out, reentered at 1.3902
GBP/JPY: long 229.14: +259
GBP/USD: too close to 50%
USD/CAD: long 1.0425: -56
USD/CHF: long 1.1870: +25
USD/JPY: long 112.97: 123

Balance 962.86, unrealised P&L 23.80, realised P&L -42.50.

AUD/USD: long 0.8225: +128 set to break even
EUR/CHF: long 1.6350: +95
EUR/GBP: short 0.6789: -78
EUR/JPY: long 159.14
EUR/USD: short 1.3902: +35
GBP/JPY: long 229.14: +259
GBP/USD: too close to 50%
USD/CAD: long 1.0425: stopped out, re entered at 1.0359
USD/CHF: long 1.1870: -12
USD/JPY: long 112.97: +190

Balance 948.25, unrealised P&L 40.91, realised P&L -52.72

Despite the negative balance, this experiment is going better than I thought it would

Marrethiel,

Perhaps I missed it, but are you fading the majority?

I'm a big sentiment player, looking at a number of things, Oanda's stats being one of them. However, the majority are right lots of times for certain periods of times. I would never enter a trade just on sentiment, but if I see a technical setup in line with an extremely unbalanced sentiment, then I'll load up as it plays out.

With the Oanda stats even a 70-30 split is not extreme enough. When it hits 80-20, then you've got something there. You should be keeping detailed records of the stats when you enter your trades so you'll have something to analyze later.

Thanks for the input but I'm pretty new to the world of finance and am not sure what you are talking about

"Fading the majority"?
I assume by sentiment you mean what is most popular?
My normal trading looks for changes in trends and break outs from ranging markets. This is going good (especially as I'm still a newb) for me as I'm averaging around half a percent per week. I'm trying this experimant to expand my knowledge of how things work in general.
How about I look at using the 75% line in the position ratio to decide on whether or not to trade a pair. Keep moving stops up when I see resistance on a three hour chart and only ever risk one percent of my account per currency. Then I'll keep track of the net win loss of each pair.

One thing I'd like to get from this is watching what tight control of money management gives. Keeping each trade to risk no more than one percent at stop loss. Not getting greedy or closing out because of fear. So I thought a simple mechanical system would be a good tool for this as well as giving me an insight into what peoples perceptions actually mean when it comes to how a currency will move.

Okay, I've reset the demo acount to 1,000. I'm now using limit orders to enter the market. I am putting the order above or below the range for the daily bar. Margin is 4%, stop loss is set to 2%.
So far only one pair has triggered in which is the GBP/JPY. Up 176 pips or 0.75% and set to break even.
I have orders long for USD/CAD and USD/CHF as well as an order short for EUR/GBP.