Machine learning in trading: theory, models, practice and algo-trading - page 158

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Andrey Dik:
You can't not use the leverage set by the office.

Leverage is like permanently available credit. If your broker gave you a leverage of 1:500, it means that the maximum available deal size will be much bigger than compared to 1:100.
But just so you know, if you open and then close a deal on two accounts simultaneously, with the same lot, but different leverage of 1:10 and 1:500 - then the profit in both accounts will be the same. The leverage does not affect how much money you get for each pip. It affects the maximum allowable trade size and how early a stop out is triggered (God forbid of course).

You don't have to bang out the maximum available amount every time, using leverage to the max. Even with 1:1000 leverage you can mentally say to the broker "thanks, but I'll pass" - and open with a smaller lot. Then, using mathematics or some monitoring you can even calculate what leverage would be enough for this strategy. That is, if your broker has a leverage of 1:1000, you can figure out that 1:50 would have been enough for your strategy. In that case, you can safely say that your strategy can be traded with 1:50 leverage.

 
Dr.Trader:

Leverage is like permanently available credit. If your broker gave you a leverage of 1:500, that means that the maximum available deal size will be much bigger than compared to 1:100.
But, just so you know, if you simultaneously open and then close a transaction in two accounts with the same lot, but different leverage of 1:10 and 1:500 - then the profit in both accounts will be the same. The leverage does not affect how much money you get for each pip. It affects the maximum allowed trade size and how early a stop out triggers (God forbid of course).

You don't have to bang out the maximum amount available every time, using leverage to the max. Even with 1:1000 leverage you can mentally say to your broker "thanks, but I'll hold off" - and open with a smaller lot. Then, using mathematics or some monitoring you can even calculate what leverage would be enough for this strategy. That is, if your broker has a leverage of 1:1000, you can figure out that 1:50 would have been enough for your strategy. In that case, we can safely say that your strategy can be traded with a leverage of 1:50.

Does the lot size that you open with depend on the leverage?

And the price of a pip depends on the size of the lot?

Child's play...

 
Dr.Trader:

Leverage is like a constantly available credit. If your broker gave you a leverage of 1:500 it means that the maximum available deal size will be much larger than compared to 1:100.
But, just so you know, if you simultaneously open and then close a transaction in two accounts with the same lot, but different leverage of 1:10 and 1:500 - then the profit in both accounts will be the same. The leverage does not affect how much money you get for each pip. It affects the maximum allowed trade size and how early a stop out triggers (God forbid of course).

That's exactly right. I was talking about the same thing.

Now explain it not to me, butto Alexey Burnakov, he was asked a question, as far as I understand, about the leverage provided by the office, which was answered:

Alexey Burnakov:

The maximum leverage - yes, 1:100. But I don't use it. I'll say it again.

See? The man misunderstands. What do you mean "but I don't use it"? - Leverage is one of the characteristics of a trading account, it is impossible not to use it - it is there!

Another thing is the deposit load, the maximum drawdown in a transaction, but the question was not about that, but about the leverage!!!

 
Dmitry:

Does the lot size at which you open depend on the leverage?

And the price of a pip depends on the size of the lot?

Child's play...

No, he's right:

Dr.Trader:

Leverage doesn't affect how much money you get for each pip. It affects the maximum allowed trade size, and how early a stop out triggers (God forbid of course) ......

And what he said next is irrelevant.

 

Guys, I need help...

I am doing a volume profile, in fact I even did it, the volume profile is when all the volume is summed up by the price at which it was passed, I think you all know this thing and there is no need to go deeper...

When you look at the chart, you see that the price is not a tick chart but a 5-minute chart and there is not one price in a 5-minute chart, but a range of price borders (high, low)...

I'm a little unclear, but I don't know how else to explain it.

The question is how to make these ranges?

here is the code - how to make a volume profile

volume <- sample.int(101,size=100,replace=TRUE)
price <- round(cumsum(rnorm(100))+1000,0)

df <- as.data.frame(cbind(price=price , volume=volume))
volume.profile <- aggregate(df$volume ~ df$price, sum, data=df)

volume.profile
plot(volume.profile,t="h" , lwd=5)
 
I don't know:

And the lot size for which you open depends on the leverage?

Of course not. I use a tester to run Expert Advisors on history with forward tests in order to find out how much the deposit drawdown is per each lot. Then I select the lot size from the current equity so that the maximum possible drawdown would not exceed 10%. Accounts usually have 1:400 or 1:300 leverage, but if I really want to, I can calculate the leverage for my own strategy and ask my broker to decrease it to what I need. But I'm too lazy, I just leave the leverage as it is, but I don't use it fully, like Alexey did.

The thing is that some dishonest brokers make money on clients losses. They benefit from seminars to tell about the advantage of leverage >1:500, that you can open with it with a big lot, etc., but in fact it's a trap. The client will write an application for a bigger leverage, for the joy of opening a deal with the maximum possible lot, and then the next news will drain his whole balance by a stop out. And then because of such brokers people on forums are trying to measure who has the bigger leverage, everywhere is rubbish.

 
Dr.Trader:

Of course not. I use a tester to run Expert Advisors on history with forward tests in order to find out how much the deposit drawdown is per each lot. Then I select the lot size from the current equity so that the maximum possible drawdown would not exceed 10%. Accounts usually have 1:400 or 1:300 leverage, but if I really want to, I can calculate the leverage for my own strategy and ask my broker to decrease it to what I need. But I'm too lazy, I just leave the leverage as it is, but I don't use it fully, like Alexey did.

The thing is that some dishonest brokers make money on clients losses. They benefit from seminars to tell about the advantage of leverage >1:500, that with it you can open with a big lot, etc., but in fact it's a trap. The client will write an application for a bigger leverage, for the joy of opening a deal with the maximum possible lot, and then the next news will drain his whole balance by a stop out. And then because of such brokers people on forums are trying to measure who has bigger leverage.

Concentrate! I understand that it's very difficult for you, but try to concentrate - it's VERY important!

Does the lot size of the position you can open depend on the amount of leverage your broker gives you?

For example, if you have a $100 deposit and the broker gives you 1:1 leverage and if you have the same $100 deposit and the broker gives you 1:500 leverage - in the second case can you open a position with a BIGGER lot than in the first?

P.S. Fucking..... "And these people forbid me to pick my nose"(s)!

 
Dmitriy:

Does the lot size of the position you can open depend on the amount of leverage your broker gives you?

I wrote just above, please reread it.

Dr.Trader:

If your broker has given you a leverage of 1:500 that means that the maximum available deal size will be much bigger than 1:100.

 
Andrey Dik:

That's exactly right. I was talking about the same thing.

Now explain it not to me, butto Alexey Burnakov, he was asked a question, as far as I understand, about the shoulder provided by the office, which was answered:

You see? The man misunderstands. How is it "but I don't use it"? - The leverage is one of the characteristics of the trading account, it is impossible not to use it - it is there!

Another thing is the deposit load, the maximum drawdown in a transaction, but the question was not about that, but about the leverage!


Why should I explain the obvious? Well, I can open a deal with a big volume. We are not in kindergarten here. It's better to admit that you don't know what we're talking about.

You'd better ask Dmitry, what was the purpose of the question:

))) Funny!

Is it the leverage with which you do these 30-40% a year?

Probably he wanted to hear "1:500" and laugh. Like, what a leverage. But he does not earn much. What would it mean if I told him that a broker gives me 1:1000? That I can open a deal for a few lots at once?
 
Dmitry:

Concentrate! I know this is very difficult for you, but try to concentrate - it's VERY important!

Does the lot size of the position you can open depend on the amount of leverage your broker gives you?

For example, if you have a $100 deposit and the broker gives you 1:1 leverage and if you have the same $100 deposit and the broker gives you 1:500 leverage - in the second case, can you open a position with a BIGGER lot than in the first?

P.S. Fucking..... "And these people forbid me to pick my nose"(s)!

You talk about Thomas, you talk about Yeremiah.

What difference does it make in practice what mega-large position I can open, if, as Dr. says - and I totally agree with him - in backtests you pick such a (usually small) lot, that the max drawdown is not limited to dangerous values?

Which answer would you prefer: 1:10 or 1:1000? Will it change your mindset? Do you want a private consultation about brokerage companies that give 1:1000 and more?

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