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I am attaching a statement from one of my real accounts for October. Using the EA and being extremely conservative we generated almost 15% for the month using my averaging in technique. It seems to be very effective. The work in this account was a couple minutes a day to see what the computer was doing.
It is working well and I am almost embarrassed to show it as I kept my exposure and lot size so low. We could have doubled the lot size and the performance with no additional real risk.
I have also attached version 1.6 of the correlator. It adds a Maximum Lots feature to prevent too many positions, as well as better screen display.
... snip ... I am attaching a statement from one of my real accounts for October. Using the EA and being extremely conservative we generated almost 15% for the month using my averaging in technique. It seems to be very effective. The work in this account was a couple minutes a day to see what the computer was doing. ... snip ...
Hi, I've taken a look at the statement and can't quite find the begining equity and ending equity for the period mentioned? Am I looking wrong or is this information simply not available?
muddyguy, what is your thinking around ratios? in your statement you are using 1:1. the pip value for chf/jpy is around $10 and for gbp/jpy around $4.5. i have seen some say use 2 chf/jpy to 1 gbp/jpy. shouldn't the pip value between the two be around the same so you would instead have around 2 gbp/jpy and 1 chf/jpy?
Hi, I've taken a look at the statement and can't quite find the begining equity and ending equity for the period mentioned? Am I looking wrong or is this information simply not available?
That would make things easier, wouldn't it? Unfortunately, it doesn't show beginning equity. Take the ending and subtract the gain. That gives you the beginning.
muddyguy, what is your thinking around ratios? in your statement you are using 1:1. the pip value for chf/jpy is around $10 and for gbp/jpy around $4.5. i have seen some say use 2 chf/jpy to 1 gbp/jpy. shouldn't the pip value between the two be around the same so you would instead have around 2 gbp/jpy and 1 chf/jpy?
My thinking is that my head starts hurting when I think about ratios...
Actually, ratios are a personal preference, and one must keep their trade goal in mind when a ratio is chosen. I have been using 1:1 because my goal really is to stay in the trade with this system and collect the compounded interest. Because of this I am using an averaging in approach to my trade and I (think) I am seeing an interesting effect on my drawdown. Rather than whomping in all at once, I go in over a couple weeks. What seems to be happening is I am averaging out the prices and averaging out the correlation. As a result, my account balance changes become gentle and small. Then, I get a sudden "event" and a TP event.
I have not managed to get fully into my position this month to earn my 8.5% because of this effect, which keeps taking me out and almost doubled my targeted profits.
But, to use ratios it helps to think about a few things. First thing is your goal. Are you sitting in it for interest or "trading" it for TP opportunites?
How volatile is one currency against another? If one is more vigorous, keep your leverage low. If you can guess the market direction, you can adjust the ratio to fit those needs. Using a simple example with the GBPUSD/USDCHF, and their relative pip values, if I expected a weak USD I would stick with 1:1. A really strong dollar trend would call for a ratio favoring the USDCHF if I was trading this for TP. In this case the added benefit of a higher ratio would be more swap each day.
What are the relative pip values and swap values? Some adjust for these.
My thinking is that the correlation tables are based on 1:1. What are they correlating? How often the pairs move together, or the relative swing away from lock-step movement? It is the swing. So, if the correlation is 80%, I would expect/hope that in a given move, they would swing around 20%+/- in that move. Or, in a 100 pip move, I would think that I would face a potential up/downside of 20 pips. Multiply that by the curreny pair values and you have your up/downside cash profit/exposure.
I may be totally out of my mind here, but this is how I feel correlation really works. It is not based on a strong long term run in either currency. That introduces price into the equation and implies that you are trading one currency and hedging your bet with the other. It seems to me that the currency oscillation effect is in place regardless of whether one of the currencies is making new highs/lows or flat in the middle.
Hope this helps!
Bill
PS, if you keep your leverage low and don't get greedy, you will make money on the swap regardless of the ratios, if you have placed a swap positive trade. That is the beauty of this. It is almost zero effort and makes a reasonable gain. Not sexy like the NFP news traders, but a bunch easier...
I have recently met and partnered with a local professional Forex trader who is using a variation on my correlation approach, and by manually trading this system, she is booking 20%-30%+ gains per month with low risk, low drawdown and very little work for her and her trading group. I will be adjusting my EA to automate this variation which should increase those gains and decrease the work. What was that song by Supertramp - "Money for nothin', chicks for free"?
Lindy uses the FreedomRocks portfolio manager to calculate the ratios and maximum portfolio exposure. I get endless emails asking about ratios and risk. This tool from FR provides those answers quite nicely for entering trades.
Note: I know FreedomRocks' business model is MLM, but let's just ignore that, ok? We don't need it. Our focus is trading and FR provides a very useful tool for ratios and risk.
Moving on now... Lindy provides ongoing training to her group via webinars and skype and email to teach the basics of correlation trading as well as our technique to manage/exit the trades much more profitably than the basic FR system. I have had a LOT of requests for training and this will address that need.
And... my robots automate the whole process for more efficient profits and less work. (I took 10% profits four times in an hour last night while I was sleeping. That was kinda cool!)
To summarize what we have now for our trading group is:
FR - entry ratios and risk management tools.
Lindy's group - training on our techniques to improve the profits via skype and webinars (next one is Sunday.)
Me - robots to automate this whole process and more training.
Now, you all know that my robots are $100/month for live versions, and you should know FR charges $100/month, AND yo should know I don't like the feeling of being "nickel-and-dimed" to death with fees. So, what I am going to do is provide both of my current robots, as well as the new, modified correlator for FREE to anyone who joins Lindy's trading group.
Your benefit is professional guidance with ratios and risk decisions, technical support with the trades via webinars, skype and email from both Lindy and myself, and my robots. You pay for the FR membership, you get my robots FREE. Lindy will show you exactly what she is doing to earn those returns.
If you join the group and then decide it just doesn't work for you, let me know and I will give you my robots for a couple more months for free to square the deal.
Here is the website to join. If you join before Sunday, you can participate in Sunday's webinar. I'll get the live robots to you as soon as you are ready, too.
BTW, Lindy has negotiated a special arrangement with a broker for her group with high swap rates, micro-mini lots, etc. That program is available only to members of her group, but it is not mandatory. You can use your own broker if you wish.
Last edited by Muddyguy; 11-03-2006 at 06:15 PM.
Reason: no spell checker...
Just like to know, for your results in October, what settings did you use? Are they just the default settings?
Cheers.
Yes, those are the default settings with my "average in" technique. Assuming that at 100:1 leverage and that I wanted 25% of my cash at work, I was attempting to ease into the market over a month to create the price and correlation averaging effect, which seems to smooth out any drawdown swings. So my goal was to add .1 lots per side each day. Stupid market kept taking me out at a profit before I could get there.
So, I never did get to my 25% trade level goal, but almost doubled my projected return in the process.
begining and ending equity
Linear Mode
