Pluto2, note that in the short term, one account might look more favorable because of when the EA was started. A biggest loser on an EA that was started this morning will be a different biggest loser than on one that was started this evening, and the confirming losers will also be different.
In the long run, it comes out in the wash because when one account is waiting for the next equity pop, another is getting a good flow of cycles. Then they might switch places where the one that did the waiting is now the one getting the good equity pop frequency.
Version 03's use of the RVI indicator does nothing more than add a randomizing element to which direction to trade each side of the hedge. In your example, I'll bet 03 opened the trades in the opposite direction compared to 01. Is that true? If so, it was quite random.
On a somewhat related note, there are some mind-bending things I observed when I took time to track the two sides of this pure synthetic hedge. I wrote EAs that multiplied the exchange rates of each group of seven and then compared the two products after every tick. The two sides stay mostly equivalent at most given timepoints, though occasionally significant non-equivalencies did appear. IF one could have taken trades on the correct side at the EXACT exchange rates presented in certain time windows, one could SURELY have made profit.
The problem is that the non-equivalencies are corrected faster than the fourteen trades could be opened, thus destroying the advantage. I think in only one or two instances did I successfully detect and take advantage of significant non-equivalencies, take trades on them, and achieve profit. And from a heavily filtered, spread-manipulating broker like IBFX! It was cool to have my observations validated, but I saw that the trade frequency was not going to get anyone excited. If I could get TRUE transparency, paper-thin fixed spreads, and INSTANT (I mean a few milliseconds) execution, I guarantee I could use such a bot to make big profits in the safest imagineable way. However, the brokers understand that and have apparently put safeguards of some kind in place. Makes sense, I would too.
The mind-bending part is that, over time, the two sides' net movement over time can be such that one side's magnitude of movement is significantly more than the other's (mathematically equivalent to a GBPUSD long moving farther than a GBPUSD short when both were opened at the same time!!!). Yet somehow the single-timepoint equivalencies stay in place! Now a trader is left to wonder: will one side's greater motion continue in the same direction, and how much, and for how long, or will that motion immediately contract to compensate for the smaller movement on the other side? The answer is that these things are UNKNOWABLE and UNCONTROLLABLE. Add to that the fact that the broker can play with spreads at will, and you as the trader are left to figure out how as a coyote can you get a few morsels of sinew off the bones after the wolves are done.
Or, can you do better than that?
What kind of strategy can take advantage of directional movement when it occurs within a synthetic hedge basket, yet still maintain a mostly balanced set of positions?
In my mind, a strategy like Basket14 is one of the possible answers.
In the long run, it comes out in the wash because when one account is waiting for the next equity pop, another is getting a good flow of cycles. Then they might switch places where the one that did the waiting is now the one getting the good equity pop frequency.
Version 03's use of the RVI indicator does nothing more than add a randomizing element to which direction to trade each side of the hedge. In your example, I'll bet 03 opened the trades in the opposite direction compared to 01. Is that true? If so, it was quite random.
On a somewhat related note, there are some mind-bending things I observed when I took time to track the two sides of this pure synthetic hedge. I wrote EAs that multiplied the exchange rates of each group of seven and then compared the two products after every tick. The two sides stay mostly equivalent at most given timepoints, though occasionally significant non-equivalencies did appear. IF one could have taken trades on the correct side at the EXACT exchange rates presented in certain time windows, one could SURELY have made profit.
The problem is that the non-equivalencies are corrected faster than the fourteen trades could be opened, thus destroying the advantage. I think in only one or two instances did I successfully detect and take advantage of significant non-equivalencies, take trades on them, and achieve profit. And from a heavily filtered, spread-manipulating broker like IBFX! It was cool to have my observations validated, but I saw that the trade frequency was not going to get anyone excited. If I could get TRUE transparency, paper-thin fixed spreads, and INSTANT (I mean a few milliseconds) execution, I guarantee I could use such a bot to make big profits in the safest imagineable way. However, the brokers understand that and have apparently put safeguards of some kind in place. Makes sense, I would too.
The mind-bending part is that, over time, the two sides' net movement over time can be such that one side's magnitude of movement is significantly more than the other's (mathematically equivalent to a GBPUSD long moving farther than a GBPUSD short when both were opened at the same time!!!). Yet somehow the single-timepoint equivalencies stay in place! Now a trader is left to wonder: will one side's greater motion continue in the same direction, and how much, and for how long, or will that motion immediately contract to compensate for the smaller movement on the other side? The answer is that these things are UNKNOWABLE and UNCONTROLLABLE. Add to that the fact that the broker can play with spreads at will, and you as the trader are left to figure out how as a coyote can you get a few morsels of sinew off the bones after the wolves are done.
Or, can you do better than that?
What kind of strategy can take advantage of directional movement when it occurs within a synthetic hedge basket, yet still maintain a mostly balanced set of positions?
In my mind, a strategy like Basket14 is one of the possible answers.
Open to new approaches.
