Folks, Remember...Bill Young/GoFXPro did NOT DOUBLE MY MONEY. I added another 5k to this account, bringing my total investment to 10K...so I am up around 5% on 10k and 10% on 5K, which is a job well done in just a couple of months. And I will continue to add periodically to get to my 5 year goal. Invest your money wisely and look for that slow, steady growth...that will get you where you plan to be. Remember higher percentage yields command higher percentage drawdowns and higher percentage yields generally do not last and are not consistent year after year. Read some of Bill B's newsletters and you will find many funds are losing money where Bill Y...perculates stablely, thus far in all market conditions. If anybody read my spreadsheets that I spent considerable time on and posted for all recently here, you can follow along or even post your own numbers to it, lord willing.

Report Date 9/14/2007
Account PF-X
Customer Name Michael
Introduced by Bill Young/GoFX IB Account #X



Liquidation Value In Terms Of US Dollars

Previous Balance 10,532.86
Unconverted Currency Difference. -0.00
Realized P&L 7.37
Payment 0.00
Journal 0.00
Commission 0.00
Long Option Premium 0.00
Short Option Premium 0.00
Net Option Premium 0.00
Conversion 0.00
Ending Balance 10,540.23
Unrealized PL 0.00
Collateral 0.00
Market Value Of Long Options 0.00
Market Value Of Short Options 0.00
Net Market Value Of Options 0.00
Liquidation Value 10,540.23
Rollover P&L 0.00
Deposit Requirements 0.00
Account Excess / Deficit 10,540.23
Withdrawable Fund N/A Managed Account

Now I have read Bill Y's disclosure from the beginning...and there is one thing that I feel a burden to tell you about. Remember I am not a salesman for these fellah's...I am trader...posting to traders here at Forextsd, wishing for a well managed account, that I am an investor in, to continue...to grow ...and to prosper.

Understand that Bill Y is entitled to make money. Many funds charge a managment fee and/or an an incentive fee...These fees can be 1 or 2% of capital invested whether there is trading or not... plus 20-50% incentive fees. Bill Y does not charge a managment fee, but he does charge a fair 20% incentive fee. But also understand that he gets a rebate from PFG for his trades in the form of a premium on the spread, thus affecting our individual trades within the program...thus our profit.

This PFG scheme would seem to encourage more trading...but Bill Y simply follows his plan and his integrity seems to be in the right place and I am not suggesting otherwise. I just wanted to point this out as I do not want to be accused later by an investor that I kept this information to myself...remember TRADERS FIRST!

In any managed account ...read the disclosure statement (it's on GoFxpro's website)...it really is not that bad to read...it is many pages...but the important stuff is in there...PRINT IT OUT. Folks share your results here ...please do not let me be the only one...we need to compare notes & experiences and learn from one another.

ES

ES,

I will post (or PM to other traders in this) when I get up and running.

Thanks for posting here, it's really invaluable to see another guy's cash on the line in the same place you're going to put your own!

I'm also going into this with eyes open but I appreciate the warning. All of it is extra cash on my part so 100% risk capital.

Speak to you soon

Mick

Well Thank you. Good Trading to you

Thanks Bill B. for letting me post so much in your thread. Perhaps I should start my own thread if you wish. This way your thread will not be side-tracked...what do you think? You would be welcome to post a link to it here or anywhere else if you feel it necessary.

ES

Muddy,

I read this passage and thought it was pure genious.... until I thought about it.

You say trading the correlated pair (GBPUSD/EURUSD) dampens the drawdown that you would have seen had you traded EURGBP. That is true.

But isn't the drawdown exactly the same if you trade the EURGBP with lower leverage? That dampens the drawdown the same, right? You also would collect the same swap.

Sorry, just confused on the advantage of the correlation.

__________________
Ideas are not trade advice.

What are you trading? Correlation? Carry trade? It sounds like you have those two crossed up and they are traded differently using the same robot. In fact, I have someone who uses C4 to news trade across three major currencies which is another critter entirely.

You can't "change it" to earn .5% per day. There are not some magical settings that will do everything for the trader. If you want .5%/day you must actively use the robot to trade currency pairs that you have analyzed. C4 cannot pick currency pairs, entry points, or analyze the market. It does an excellent job of opening trades fast, reporting the status of the open trades, which can be important when there are 20+ open trades across multiple currencies, and it will close everything at user specified values.

First, (everyone) please read the FAQ, especially regarding the trailing stop function. The answers are right in there. Second (this is for everyone else), put the FREE demo robots on a FREE demo account and run them. This weekend alone I counted 17 emails with questions from individuals who had not yet loaded the robots and wanted to answers that are obvious if one reads the faq or runs the robot. That was just during one weekend... If the faq was read and robots tried, it would personally save me almost half my time, which could then be spent elsewhere.

This robot is comes from carry trade roots and is not designed to take losses. The carry trade concept was to leverage carefully, add incrementally and create an averaged in position to earn interest. That is still a valid concept as long as interest rate differentials remain, and assuming that the trader has a plan to hedge any large drops in the pairs traded.

It can be used to trade correlation opportunities, but properly done that is a trade that lasts a few hours at most and ignores interest.

You can, if desired, actively manage the trade by adding stop losses, trailing stops, profit points to each open trade manually without disturbing the robot. You can also manually add/remove trades from the set and the robot will adjust automatically.

Trade carefully,
Bill

Hi,

No worries. This is something that is so obviously simple that it took me a year to figure it out...

Yes, you can lower the absolute drawdown with lower leverage, which will protect the account better, but the absolute change in pips will remain identical - a 200 pip move is still a 200 pip move regardless if the leverage is 4:1 or 400:1. The difference with lower leverage is dollar impact of each pip. A well behaved correlated trade may only move 100 pips when the same directional trade moves 200 pips. This is a good thing if the trade moves against you, especially due to sudden news - like the hoof and mouth outbreak that screwed up my trade last month.

Let's run an example to illustrate the main advantage of a correlated trade. At this moment the EURGBP is trading at .6943 and the big FOMC rate announcement is a couple hours away, which might drive both the EUR and GBP up. Meanwhile, Northern Rock's Board of Directors would like a nice mad cow/hoof and mouth outbreak combo to take the focus off of their horrid financial situation. The Northern Rock news is GBP negative.

So, I decide to take a long position on the EURGBP at .6943 right now. Microseconds after my trade has been placed the Trading Gods punish me for my impunity* by announcing that 1) the banking issue in England has been solved, 2) the European Central Bank will lower interest rates in the next two months, and 3) British cows will never get sick again.

Suddenly the EURGBP plummets in value. Because it is a directional trade I get to take a stop loss at some point. If I stay in, it may be years before we see the .6943 level again, where I can get out at a profit.

What if I had traded the EURUSD/GBPUSD instead? I still could have been punished by the news causing an unfavorable decorrelation event such as the Northern Rock news. But, and this is the critical point here - I don't need to have both of those currencies return to a positive value to make my profit. I only need the combination to become net positive. I entered my cow trade on the GBPUSD side long near 2.300-ish. I don't ever need the GBPUSD pair to get back to that price to profit. This is the advantage that correlation trading has over directional trading, and which almost nobody understands. I just need the EURUSD side to be worth more at some point. I have had the absolute pleasure of wallowing in this stupid trade for more than a month, averaging in and using other correlation trade techniques to nudge it back to profitability - but it will make a positive decorrelation event in it's own good time. I picked up almost 100 pips last night hedging this trade. I was almost out at a nice profit last week, but it turned away again. Stupid British banks!

FYI, the Northern Rock news sucked for my trade. May incontinent, diseased British cows soil the lobby carpet at Northern Rock.

Trade carefully,
Bill

* Yeah, don't laugh. Everyone who has ever placed a live trade has been spanked by the Trading Gods at some point.

Hi Bill. I intrigued by this. I always presumed that if you opened two positions simultaneously, say long EURGBP and long/short EURUSD/GBPUSD, that the profit or loss would be identical for both, irrespective of how long they remained open - are you saying this is not the case???

If so, wouldn't this be classed as a real exploitable in-efficiency in a supposedly efficient market?

long EURGBP, long EURUSD, short GBPUSD would be three positions, not two. This is a kind of arbitrage trade which is not the correlation trading I have been discussing. Correlation trading involves two or more correlated pairs. The cross is sometimes used as a protective hedge in certain circumstances and at certain times.

However, if you opened those three pairs you described in the proper ratio, they will not fluctuate much. They will probably lose swap each day as swap always favors the brokerage.

These arbitrage "rings" should perfectly balance but can be exploited when there are market inefficiencies causing these rings to go slightly out of balance (which is referred to as Fractional Product Inefficiencies), and if one is using a very, very fast data feed, and if the broker is not gouging the trader on the spreads, AND if the fills are fair. Unless you happen to own a major financial institution, the chances of using this system profitably is close to zero. I did a lot of work on a robot to trade this and found the results disappointing.

Trade carefully,
Bill

Yes, that is how I understood it to work. I'm also familiar with FPI thanks to Michael Kreslik.

I therefore take it that you are long both EURUSD and GBPUSD in your example - though I do not really understand how you profit trading two correlated pairs like this, apart from increasing your position in one or both on pullbacks and lightening up on rallies. But what happens if they keep heading south?...

Time to read up on more of what you are doing here methinks...