Please, just slap me around if I'm being silly ...
well its not one of my better mornings !
ive watched two buy baskets with 600 pips profit fall into -300
all be it im only holding one now,didnt lock any profits so only my self to blame.slap on wrist.
ill hold my remaining long with the view of U S showing a bit of optimission
ill take a 560 hit otherwise.
everthing at present looking very much to the downside !
all part and parcell.
Well, i did lock my profit this morning ...i am standing sideline to watch...confuse to buy or sell (election aftermath?!) ...cos HAS is blue, VQZ is red.
- #1,145
- Nov 7, 2012 4:35am Nov 7, 2012 4:35am
- Joined Oct 2008 | Status: patiently growing wealth... | 2,655 Posts
John 3:16 - From THIS love no power on earth can me sever.
- #1,146
- Nov 7, 2012 4:36am Nov 7, 2012 4:36am
- Joined Oct 2008 | Status: patiently growing wealth... | 2,655 Posts
John 3:16 - From THIS love no power on earth can me sever.
I have read briefly through the last pages and have a little contribution to them struggling with the costs comparing the larger and smaller basket.
What I have seen, going through 2 months of data, is that there is indeed no big difference between trading 5 or 12 (14) pairs. Sometimes the 5 is a little smoother with less volatile spikes, sometimes it's the larger basket.
For anyone saying that it's always the same or markets always do things related to each other, I like to say: no they don't. For any particular reason one or more single pairs (or other markets) can and will have totally unexpected turns, which can make a lot of difference. I don't think one should trust the basket to follow when bond's or stock markets fall or rise. I have seen many times that bond's go up while stock markets were rising as well, even for a longer period of time. There is no golden rule for the markets to behave, they just behave! That's why I like the basket Kos did introduce in this thread. In my opinion it's about diversifying, as one doesn't know the outcome of individual pairs. Maybe when back testing for a particular time range will make you feel convinced about market/pairs related movements, I doubt if that feeling will hold when different markets/pairs start to behave less logical. True, we can ditch some pairs as they are synthetically the same as others.
Put it differently, the Dow consists of 30 stocks. I am pretty sure one could find a way to trade just a small number of those stocks to mirror the same performance. Unexpected things will and can happen just related to one or two stocks in the Dow basket, which can be of great influence on the small group of stocks we picked, but doesn't have the same impact on the Dow 30. This is the same for any market basket. When about two years ago the BOJ intervened the market, the EURJPY which I traded heavily and had nice swings, totally lost it's temper and didn't have the edge that it used to. This took several months to return. Adding to this that when such an intervention takes place, you either want to be on the right side or want to have some diversification in your portfolio. The same is true for what SNB did do for the EURCHF. Maybe it's traded now again with small profits in the basket, there has been a long period where it was kept at one level and adding probably nothing to the performance.
Ok, and now the down side of the larger basket. Trading costs in spreads and commissions are higher when trading a larger basket, this is said in a few posts in this thread. Some even say it's extremely higher, which is totally wrong.
If you look back you will see that the 12(14) basket makes larger swings in pips. Comparing swings in pips is wrong when comparing the two baskets, you should look at % performance or hard money in your account.
Yesterday's long set-up in the 12 basket had a peak from entry of roughly 350pip (depending on your entry method). The same set-up in the 5 basket had a swing of roughly 200pip.
I saw a post here that someone said Kos did better/making more pips with his larger basket. Yes and no, he made more pips but if you applied position sizing, it should have been about equal in money for that swing.
When trading 0.1 lots in the 12 basket, you could have made (assuming the average pip value is $1,- per 0.1 lot) $350,- on this trade, when being able to pick the peak
If you want to have the same result in money on your account using the 5 basket with 200pip you need to add to your position size. So you need to make $1.75 per pip to get the same $350,- Meaning that for those 5 pair basket one would need a position of 0.175 lots instead of 0.1 lot.
In my back test I saw that for the 5 pair basket to have the same hard money performance, one would need a 1.5-2 times the larger basket size on average. Trading the 12 pairs equals, to 1.2 lot (12X 0.10) and the 5 pairs equals to around 0.9 lot (1.5-2 x 5 x 0.1). So, on average you reduce your transaction costs by a third, which is not as extreme as mentioned. Specially when you take the nature of longer swings into account.
Now what could make a difference is reducing the costs when being able to ditch the exotic pairs with ridiculous large spreads that most brokers offer, or do some due diligence to find a respectable broker with reasonable spreads.
My conclusion: I don't say that either one of the baskets has more merits, that's up to personal risk appetite.They perform about the same, the diversification is different and one has to decide himself if he needs/wants that. The importance of difference in transaction costs is far overstated, this should not be of great influence comparing the two baskets (imho). The spreads used by your broker is far more important.
PBB
What I have seen, going through 2 months of data, is that there is indeed no big difference between trading 5 or 12 (14) pairs. Sometimes the 5 is a little smoother with less volatile spikes, sometimes it's the larger basket.
For anyone saying that it's always the same or markets always do things related to each other, I like to say: no they don't. For any particular reason one or more single pairs (or other markets) can and will have totally unexpected turns, which can make a lot of difference. I don't think one should trust the basket to follow when bond's or stock markets fall or rise. I have seen many times that bond's go up while stock markets were rising as well, even for a longer period of time. There is no golden rule for the markets to behave, they just behave! That's why I like the basket Kos did introduce in this thread. In my opinion it's about diversifying, as one doesn't know the outcome of individual pairs. Maybe when back testing for a particular time range will make you feel convinced about market/pairs related movements, I doubt if that feeling will hold when different markets/pairs start to behave less logical. True, we can ditch some pairs as they are synthetically the same as others.
Put it differently, the Dow consists of 30 stocks. I am pretty sure one could find a way to trade just a small number of those stocks to mirror the same performance. Unexpected things will and can happen just related to one or two stocks in the Dow basket, which can be of great influence on the small group of stocks we picked, but doesn't have the same impact on the Dow 30. This is the same for any market basket. When about two years ago the BOJ intervened the market, the EURJPY which I traded heavily and had nice swings, totally lost it's temper and didn't have the edge that it used to. This took several months to return. Adding to this that when such an intervention takes place, you either want to be on the right side or want to have some diversification in your portfolio. The same is true for what SNB did do for the EURCHF. Maybe it's traded now again with small profits in the basket, there has been a long period where it was kept at one level and adding probably nothing to the performance.
Ok, and now the down side of the larger basket. Trading costs in spreads and commissions are higher when trading a larger basket, this is said in a few posts in this thread. Some even say it's extremely higher, which is totally wrong.
If you look back you will see that the 12(14) basket makes larger swings in pips. Comparing swings in pips is wrong when comparing the two baskets, you should look at % performance or hard money in your account.
Yesterday's long set-up in the 12 basket had a peak from entry of roughly 350pip (depending on your entry method). The same set-up in the 5 basket had a swing of roughly 200pip.
I saw a post here that someone said Kos did better/making more pips with his larger basket. Yes and no, he made more pips but if you applied position sizing, it should have been about equal in money for that swing.
When trading 0.1 lots in the 12 basket, you could have made (assuming the average pip value is $1,- per 0.1 lot) $350,- on this trade, when being able to pick the peak
If you want to have the same result in money on your account using the 5 basket with 200pip you need to add to your position size. So you need to make $1.75 per pip to get the same $350,- Meaning that for those 5 pair basket one would need a position of 0.175 lots instead of 0.1 lot. In my back test I saw that for the 5 pair basket to have the same hard money performance, one would need a 1.5-2 times the larger basket size on average. Trading the 12 pairs equals, to 1.2 lot (12X 0.10) and the 5 pairs equals to around 0.9 lot (1.5-2 x 5 x 0.1). So, on average you reduce your transaction costs by a third, which is not as extreme as mentioned. Specially when you take the nature of longer swings into account.
Now what could make a difference is reducing the costs when being able to ditch the exotic pairs with ridiculous large spreads that most brokers offer, or do some due diligence to find a respectable broker with reasonable spreads.
My conclusion: I don't say that either one of the baskets has more merits, that's up to personal risk appetite.They perform about the same, the diversification is different and one has to decide himself if he needs/wants that. The importance of difference in transaction costs is far overstated, this should not be of great influence comparing the two baskets (imho). The spreads used by your broker is far more important.
PBB
- #1,154
- Nov 7, 2012 4:55am Nov 7, 2012 4:55am
- | Joined Apr 2010 | Status: Trader | 1,404 Posts
It jumps the stop sign with-560 pips. I am now out of the market.
From October 24.
1. +574 pips
2. -412 pips
3. +420 pips
4. +440 pips
5. -102 pips
6. -385 pips
7. -560 pips
TOTAL: -25 pips
The system original Kos does not work if there is no trend. It is necessary to do mas test but at the moment the system does not win.
A greeting.
You will always have a reason for not trading: US elections is today but yesterday too and nobody said to not trade yesterday......really interesting
- #1,155
- Nov 7, 2012 4:57am Nov 7, 2012 4:57am
- | Commercial User | Joined Aug 2011 | 1,121 Posts
Follow me to the Promised Land
The only objective forwardtest in all the thread.........
You will always have a reason for not trading: US elections is today but yesterday too and nobody said to not trade yesterday......really interesting
When looking at both yesterday's long and even this morning's long, both trades were to be set at BE after reaching 150 pip profit, when respecting the few rules Kos gave us. The short this morning was a different story, if taken.