HedgeEA - page 55
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so what should we do now?
Definately not possible to open a trio and still able to benefit from the interest rates.
CashGrabs from trio? Spread will kill it all..
Guess everything is calculated properly with the broker, definately can't gain anything from an "impeccable hedge"
Definately not possible to open a trio and still able to benefit from the interest rates.
CashGrabs from trio? Spread will kill it all..
Guess everything is calculated properly with the broker, definately can't gain anything from an "impeccable hedge"Previously I've tested with the trio combo using the FFS calculator. My sense is that its more difficult to close the trade as it involves 3 components. Also, I don't think its going to add more "stability" to the hedge. I would rather go for a dual hedge config such as EURUSD/USDCHF or EURJPY/CHFJPY which is rated high on correlation all around the seasons.
Previously I've tested with the trio combo using the FFS calculator. My sense is that its more difficult to close the trade as it involves 3 components. Also, I don't think its going to add more "stability" to the hedge. I would rather go for a dual hedge config such as EURUSD/USDCHF or EURJPY/CHFJPY which is rated high on correlation all around the seasons.
Alright, I will take alook at EURUSD/USDCHF, whats yours ratio for this 2 pairs?
Alright, I will take alook at EURUSD/USDCHF, whats yours ratio for this 2 pairs?
Based on my calculation, its 0.94.
BTW, if you refer to my Hedge Trade Calculator, you may notice a bias function there. This is to allow you to make adjustments to compensate for any differences in the pip cost between the two pairs of currency in hedge.
For instance, if I'm looking at GBPJPY/CHFJPY, for a trade of 2% margin out of $5000 balance, the pip cost would be $3.21/$1.23. There is gross imbalance between the pip cost of the two currency pairs i.e. GBPJPY is 2.6 times more costly than CHFJPY per pip! In good situations, if GBPJPY were to increase against CHFJPY, the potential for large cashgraps would be terrific! However, if the opposite were to happen, if GBPJPY were to decline against CHFJPY, the potential for damages are equally great i.e. the simultaneous increase of CHFJPY is unlikely to provide much protection against the decline of GBPJPY.
Therefore, to compensate against such gross imbalance, one can adjust the bias such that the pip cost between both currency pairs in the hedge are more or less equal, while maintaining constant margin. In doing so, if GBPJPY were to decline against CHFJPY, a corresponding rise of the latter can provide much better hedge against the decline of the former.
With the bias function in place, one can choose to to trade either more agressively or conservatively. Hence, provided that the correlation between 2 currency pairs is strong (0.80 and above), there is some degree of flexibility that one can control in a hedge pair.
BTW, if you refer to my Hedge Trade Calculator, you may notice a bias function there. This is to allow you to make adjustments to compensate for any differences in the pip cost between the two pairs of currency in hedge.
For instance, if I'm looking at GBPJPY/CHFJPY, for a trade of 2% margin out of $5000 balance, the pip cost would be $3.21/$1.23. There is gross imbalance between the pip cost of the two currency pairs i.e. GBPJPY is 2.6 times more costly than CHFJPY per pip! In good situations, if GBPJPY were to increase against CHFJPY, the potential for large cashgraps would be terrific! However, if the opposite were to happen, if GBPJPY were to decline against CHFJPY, the potential for damages are equally great i.e. the simultaneous increase of CHFJPY is unlikely to provide much protection against the decline of GBPJPY.
Therefore, to compensate against such gross imbalance, one can adjust the bias such that the pip cost between both currency pairs in the hedge are more or less equal, while maintaining constant margin. In doing so, if GBPJPY were to decline against CHFJPY, a corresponding rise of the latter can provide much better hedge against the decline of the former.
With the bias function in place, one can choose to to trade either more agressively or conservatively. Hence, provided that the correlation between 2 currency pairs is strong (0.80 and above), there is some degree of flexibility that one can control in a hedge pair.cv71co,
I am not too sure how you calculate the Pip Cost. Maybe we are testing on different brokers. From what I got from NF and FXDD, the pip cost for GBPJPY and CHFJPY is the same. the ratio should be 1.
The Bias you mention about sound like the range ratio that we are talking about few weeks back.
The AutoRatio function in the HedgeEA actually accounts for that. Current the Ratio is about 2.6.
Which means buy 0.1 lot of GBPJPY and sell 0.26 lots of CHFJPY.
Another question, do you look at correlation for entry? If yes, on which timeframe and period you think its suitable?
Can someone check out this new indicator and provide some feedback on whether or not it would benefit this ea?
https://www.mql5.com/en/forum/176231
cv71co,
I am not too sure how you calculate the Pip Cost. Maybe we are testing on different brokers. From what I got from NF and FXDD, the pip cost for GBPJPY and CHFJPY is the same. the ratio should be 1.
The Bias you mention about sound like the range ratio that we are talking about few weeks back.
The AutoRatio function in the HedgeEA actually accounts for that. Current the Ratio is about 2.6.
Which means buy 0.1 lot of GBPJPY and sell 0.26 lots of CHFJPY.
Another question, do you look at correlation for entry? If yes, on which timeframe and period you think its suitable?Hello,
The ratio between GBPJPY and CHFJPY should be correct. The are not the same. Check this: https://www.mql5.com/en/forum/175357/page20
On second thoughts, are you referring to EURUSD/USDCHF? They are close enough, but not the same as well. Check it here: http://www.1world-forex.com/calc.htm
I think Bias and AutoRatio function is the same thing here. I did not go thru the previous posts in detail, but I suppose the idea is the same.
On how I check for entry... They are 3 indicators that I look at:
1) CCI
2) RSI
3) Stochastic
Reason is because these are the indicators that tells me whether the current price is overbought or undersell.
I would only look at the 4hr time frame. This is to get a macro view on how the current price compare against the previous prices up to 20 days ago. I don't think the 30 min or 1hr time frame is good for timing entry because it does not give a sufficient macro view.
Hello,
The ratio between GBPJPY and CHFJPY should be correct. The are not the same. Check this: https://www.mql5.com/en/forum/175357/page20
On second thoughts, are you referring to EURUSD/USDCHF? They are close enough, but not the same as well. Check it here: http://www.1world-forex.com/calc.htm
I think Bias and AutoRatio function is the same thing here. I did not go thru the previous posts in detail, but I suppose the idea is the same.
On how I check for entry... They are 3 indicators that I look at:
1) CCI
2) RSI
3) Stochastic
Reason is because these are the indicators that tells me whether the current price is overbought or undersell.
I would only look at the 4hr time frame. This is to get a macro view on how the current price compare against the previous prices up to 20 days ago. I don't think the 30 min or 1hr time frame is good for timing entry because it does not give a sufficient macro view.The Ratio for GBPJPY and CHFJPY is not the same but the PipCost should bethe same.
Currently having super big drawndown on this pair due to yesterday big move. Start to get worry about this hedge pair.. I guess thats the emotional part that everyone are talking about. :P
The Ratio for GBPJPY and CHFJPY is not the same but the PipCost should bethe same.
On my broker's calculator (1world-forex.com), its showing that the pipcost is different, and the ratio is about 0.97 or so.
This hedge pair is very unstable now because of its connection to GBP. I would not trade on it for now. I would rather go for EURUSD/USDCHF.
I'm currently trading light on hedge because of GBP related drawdowns. I'm trading more with WSS technique. The win rate is very high... bordering 90% or so.