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Attachments: System to hedge every major dollar pair for profit / low DD
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System to hedge every major dollar pair for profit / low DD

  • #41
  • May 20, 2012 2:33pm May 20, 2012 2:33pm
Quoting Dirtybrown
I majored in Anthropology because I wanted to know what sets us aparts as living beings?

The answer is shared knowledge transmitted differentially. This is the definition of culture.
  • #42
  • May 20, 2012 2:56pm May 20, 2012 2:56pm
Quoting Dirtybrown
Think so, it should be in good profit at that time.

All of that consolidation near 0 was evident on my floating profit equity curve. In theory you should be able to close out all in profit a while before 0 exactly gets hit. Trust me, you will see it. You decide and let us know
Hi Dirtybrown, Do you close the trades manually rather then letting the EA do it for you?
Shapeshift greed and catch em' off guard
  • #43
  • May 20, 2012 3:03pm May 20, 2012 3:03pm
These are manually opened trades. Yes, I will close the trades as soon as the market opens.

The Arbomat EA itself has no trading logic. The only purpose it has it to display th R chart. Trading as I described, the trades will be opens likely for weeks so patience is needed. But if found to be reliable, lots can be multiplied. If you can make $23,000/mo. roughly with a hands off method with managable DD, it will be more profitable than most of the shoter term strategies used IMO.

Feel free to disagree with that assessment.

Quoting Czaray
Hi Dirtybrown, Do you close the trades manually rather then letting the EA do it for you?
Skype: heliosphan187
  • #44
  • May 20, 2012 3:21pm May 20, 2012 3:21pm
Quoting Dirtybrown
Attachment
Attachment

This chart is created within a statistical program called R, it's free. Someone on FF created a custom DLL to trigger it from metatrader see my sig to get it and instructions. This is measuring mean/standard deviation of the displayed pair

In the above example, on 4/26, I took those positions based on hedge ratios calculated by arbomat.

Thing to remember: Due to a bug, the sign of the ratio is backward. So when 100 is displayed, it would actually be -100 when traded. So you would short...
its good during normal times but not good right now usd is about to go on a hockey stick curve. Ever heard of the trillion dollar bet? My advise would be to find one in a trend and trade it until it breaks. Thats what 7bit and old dog did anyways. Dont add every std dev its a high chance of margin call and stress esp imagine if u made 100 k then lose it all on one basket
  • #45
  • May 20, 2012 3:31pm May 20, 2012 3:31pm
I've avoided using the trend-o-mat or any trend analysis with the arb-o-mat specifically because 7bit said the trend-o-mat was flawed. I know for a fact drawdown was extremely low on this basket. it is every dollar pair.

For one pair to rise, another has to fall. The beauty of forex.

Given: USD used in 75% of all fx transactions. It only stands to reason a drop in one pair will reflect in another major pair which you will capture. Sort of like a casino. They don't care who wins, when the deal is over, all chips get cashed out by someone.

Quoting sidhujag
its good during normal times but not good right now usd is about to go on a hockey stick curve. Ever heard of the trillion dollar bet? My advise would be to find one in a trend and trade it until it breaks. Thats what 7bit and old dog did anyways. Dont add every std dev its a high chance of margin call and stress esp imagine if u made 100 k then lose it all on one basket
Skype: heliosphan187
  • #46
  • May 20, 2012 3:38pm May 20, 2012 3:38pm
My theory (and probably why the trades have to be open for weeks to be profitable) these trades reflect new money coming into the dollar. Naturally, this will take time.
Skype: heliosphan187
  • #47
  • May 20, 2012 3:42pm May 20, 2012 3:42pm
Quoting Dirtybrown
I've avoided using the trend-o-mat or any trend analysis with the arb-o-mat specifically because 7bit said the trend-o-mat was flawed. I know for a fact drawdown was extremely low on this basket. it is every dollar pair.

For one pair to rise, another has to fall. The beauty of forex.

Given: USD used in 75% of all fx transactions. It only stands to reason a drop in one pair will reflect in another majohr pair which you will capture. Sort of like a casino. They don't care who wins, when the deal is over, all chips get cashed out by someone....
well its only flawed in that the moves are respective of the last biggest move so if your basket was ranging for a week then broke out you can easily hit 3 std devs which is high dd if ur adding at each dev. Here you will go opposite for achieving the mean which will give u another 2k but what if it keeps going like 2008? whats ur exit strategy? will you krep adding to try to be? Thats why i asked u if u read about the trillion dollar bet as long as u keep some sort of mm in place with positive expectancy over a good sized num trades u can profit. if it was flawed in creating synthetic trends or ranges wouldnt that same flaw plague u during this mean reversion targetting?
  • #48
  • May 20, 2012 3:49pm May 20, 2012 3:49pm
Quoting Dirtybrown
My theory (and probably why the trades have to be open for weeks to be profitable) these trades reflect new money coming into the dollar. Naturally, this will take time.
if rba does a cut and grexit happens what happens to ur basket more imp how can u detect and or react in respect to your strategic positioning of ur basket to avoid losing ur collar?
  • #49
  • May 20, 2012 3:55pm May 20, 2012 3:55pm
So, I am assuming that to use R you have to have a fair bit of computer knowledge? I have very little when it comes to computer language and codes. I got stumped with redirecting the path of the Arbomat and trendomat, so I used the vitrite overlay method that uses transparency with two metatraders open. But regardless of what entry method used, is the overlay EA still sufficient enough in it's standard settings to execute and handle the trade till you decide to exit it?
Shapeshift greed and catch em' off guard
  • #50
  • May 20, 2012 4:13pm May 20, 2012 4:13pm
I am basing it on the current window. It could possibly go to a lower deviation. But based on what i know is going on now, i don't think 2 standard deviations lower from here is in the cards.

Statistically, the odds are better for price to go back to 0 first. Not sure of an exit strategy yet. Possibly 2 standard deviations.. or 1. Let's find out

Quoting sidhujag
well its only flawed in that the moves are respective of the last biggest move so if your basket was ranging for a week then broke out you can easily hit 3 std devs which is high dd if ur adding at each dev. Here you will go opposite for achieving the mean which will give u another 2k but what if it keeps going like 2008? whats ur exit strategy? will you krep adding to try to be? Thats why i asked u if u read about the trillion dollar bet as long as u keep some sort of mm in place with positive expectancy over a good sized num trades u can profit....
Skype: heliosphan187
  • #51
  • May 20, 2012 4:19pm May 20, 2012 4:19pm
Read the whole synthetic hedge thread. There is no issue with arbo-mat, just the trend-o-mat. The arbo-mat works best with USD pairs. hedge ratios may be inaccurate if using non USD pairs.



Quoting sidhujag
well its only flawed in that the moves are respective of the last biggest move so if your basket was ranging for a week then broke out you can easily hit 3 std devs which is high dd if ur adding at each dev. Here you will go opposite for achieving the mean which will give u another 2k but what if it keeps going like 2008? whats ur exit strategy? will you krep adding to try to be? Thats why i asked u if u read about the trillion dollar bet as long as u keep some sort of mm in place with positive expectancy over a good sized num trades u can profit....
Skype: heliosphan187
  • #52
  • May 20, 2012 4:20pm May 20, 2012 4:20pm
Quoting Dirtybrown
I am basing it on the current window. It could possibly go to a lower deviation. But based on what i know is going on now, i don't think 2 standard deviations lower from here is in the cards.

Statistically, the odds are better for price to go back to 0 first. Not sure of an exit strategy yet. Possibly 2 standard deviations.. or 1. Let's find out
i didnt execute trades from his mt4 hook but there were calls in his python that called buy and sell functions from what i remem you can have a closeall function in there too similarily. So a viable approach may be to wait for 2nd dev and hit a 1:1 basket so ur saying odds are it will come to mean thats what u are playing. End of the day it might avert broker manipulation since ur not playing with one pair. Ive always been a fan of baskets i play with A basket system based on jpy and usd vs all chart except chf ofcourse because of snb
  • #53
  • May 20, 2012 4:21pm May 20, 2012 4:21pm
Totally separate from overlays. just find out where the Rterm.exe file is doing a search and put that path there. All of the instructions are described you don't need to know any coding just follow instructions.

Quoting Czaray
So, I am assuming that to use R you have to have a fair bit of computer knowledge? I have very little when it comes to computer language and codes. I got stumped with redirecting the path of the Arbomat and trendomat, so I used the vitrite overlay method that uses transparency with two metatraders open. But regardless of what entry method used, is the overlay EA still sufficient enough in it's standard settings to execute and handle the trade till you decide to exit it?
Skype: heliosphan187
  • #54
  • May 20, 2012 4:22pm May 20, 2012 4:22pm
All evens out. You think the banks will let euro crash? not in their interest, so it won't happen. all hype.

Quoting sidhujag
if rba does a cut and grexit happens what happens to ur basket more imp how can u detect and or react in respect to your strategic positioning of ur basket to avoid losing ur collar?
Skype: heliosphan187
  • #55
  • May 20, 2012 4:27pm May 20, 2012 4:27pm
Quoting Dirtybrown
All evens out. You think the banks will let euro crash? not in their interest, so it won't happen. all hype.
dont assume u dont know their interests. Eu may be gone i mean abolished gone in a few yrs. If crisis was generated maybe its backfired who knows. Why else would eu tank on greece news when greece is only like 2% of the contributer to total gdp? Market will do what its going to do physical demand has to come in order for growth. Cbs cant keep ir propped up forever
  • #56
  • May 20, 2012 4:30pm May 20, 2012 4:30pm
Points taken, any way you look this is a fully hedged dollar position that happens to be short eurusd now. If this hedge was made up of day trading stocks, obviously taking the new positions at -.002 would be stupid. We are talking global currency here, nothing moves in a straight line without retracements to get out, not even USD during crisis.
Quoting sidhujag
dont assume u dont know their interests. Eu may be gone i mean abolished gone in a few yrs. If crisis was generated maybe its backfired who knows. Why else would eu tank on greece news when greece is only like 2% of the contributer to total gdp? Market will do what its going to do physical demand has to come in order for growth. Cbs cant keep ir propped up forever
Skype: heliosphan187
  • #57
  • May 20, 2012 5:06pm May 20, 2012 5:06pm
Wow this is based on 7bit's work. I had tried trend o mat but failed...the drawdown keep increasing. Im not so sure about arb o mat . This strategy is alot about some portfolio management on some other forum. I didnt remember exactly but the strategy depends a lot on adjusting the lots hedge ratio. Decrease or increase the lot as needed ..the keyword might be rebalancing. The ratio can change time to time. But i heard somebody said that there is no guarantee that it will revert to the mean. As i said in a volatile market maybe you need to adjust more. Im not sure.. i tried this 2 years ago but lost interest. Im curious how this work out. My observations above could be wrong though.
Maybe this also comply to the old adage.. cut the losses let the profits run. As you could decrease the exposure on the losing positions and add / maintain the winning position. As of arb o mat it even calculate the hedge ratio for you. the bigger the tf the longer the trade. But it will be good news if we can book some healthy profits weekly . Lastly i dont know if 7bit even trade these ...but lets see...
  • #58
  • May 20, 2012 5:19pm May 20, 2012 5:19pm
Attached Image (click to enlarge)
Click to Enlarge Name: no-uc.jpg Size: 114 KB


For those wanting more trades, take out usdchf lots more volatility.

Some sort of grid system based on the horizontal lines could be created.
Skype: heliosphan187
  • #59
  • May 20, 2012 6:50pm May 20, 2012 6:50pm
ever tried the Dow, S&P500, Nasdaq indices?
  • #60
  • May 20, 2012 7:15pm May 20, 2012 7:15pm
Yes there was a design flaw in trend-o-mat, not so with arb-o-mat. I can't speak to the other system. My understanding is the ratio's generated from R don't need active rebalancing. Somenoe on the synth thread leave hedges open for months at a time, then builds other hedges from those hedges and a harvest method. Unfortunately few details were given.

For me there are no winners/loser individual pairs, the basket is 1 transaction for better or worse. If you clip out winners and hold losers, how do you rebalance? To me that is not sustainable. 7bit doesn't use the framework anymore, he's probably on an island somewhere sipping martini's and ordering strippers. who knows.

Synthetic hedges, cointegration, mean reversion and similar stuff -> http://www.forexfactory.com/showthread.php?t=262827

Quoting superbandam3
Wow this is based on 7bit's work. I had tried trend o mat but failed...the drawdown keep increasing. Im not so sure about arb o mat . This strategy is alot about some portfolio management on some other forum. I didnt remember exactly but the strategy depends a lot on adjusting the lots hedge ratio. Decrease or increase the lot as needed ..the keyword might be rebalancing. The ratio can change time to time. But i heard somebody said that there is no guarantee that it will revert to the mean. As i said in a volatile market maybe you need to adjust...
Skype: heliosphan187
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