Is risk diversification even possible in the forex market? - page 13
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In this case, the goal is also unachievable - by distributing the depo load on the instruments, you are also distributing the possible profit. That is, as a result, the risk/profit probability ratio for all pairs will be the same as in trading with full deposit load on one instrument (slightly inaccurate due to purely technical details).
In this case, the goal is also unachievable - by distributing the depo load on the instrument you are also distributing the possible profit. In other words, as a result, the risk/profit probability ratio for all pairs will be the same as when trading with full deposit load on one instrument (slightly inaccurate due to purely technical details).
But it turns out due to what?
Because of the fact that in Forex everything correlates with each other or due to the fact that many instruments are taken on the 1st account simultaneously and you think this load on the deposit is dangerous?
And 1 more point that is not completely clear to me is diversification by accounts.
Explain briefly (if possible) what is the point of it?
(just that you can be screwed by 1 of the DTs or there are other aspects?)
So there are no successful traders on Forex, who trade several pairs simultaneously on the same timeframe with the same strategy?
There is another approach to multicurrency trading (I am a follower of this approach), when trading in several instruments is a part of a single trading strategy. But that is another topic altogether.
Let's not take offence or personal insults.
1. Your quote: "currency nullification", creating a currency-neutral portfolio is an unrealizable delusion, .....".
Answer 2 questions:
1. Portfolio neutrality shows neutrality in relation to what?
2. the major risk in the trade is what? Which of the risks results in significant losses?
Please answer my questions first and then you can ask yours. This will lead to a PROPERTY discussion.
1- Let's start by saying that I am not the one who invented both the term and the concept of "market-neutral portfolio". Based on what is meant by the term in the discussion, the meaning is that "MFN" is a collection of trading instruments that has the following properties - if position directions and sizes are chosen correctly (from the adherents' point of view), we get a portfolio whose total value slightly fluctuates but does not change depending on market conditions. And now about neutrality "towards what" - there is in fact no neutrality towards anything, even towards the currency pair or any instrument in such a portfolio, the price doesn't stay constant. Precisely this fact gives me a reason to consider the very idea of an "EOI" nonsense, moreover I (as I told you in another thread) confirmed my guesses and considerations with calculations and illustrations of behaviour of such pseudo-"EOI" in the tester;
2 - the question volume too much, "fathers" of trade write treatises on this subject, therefore I suggest not to mention it even for discussions (besides it has no direct relation to questions of the top-starter).
I have only one question to you - why are you misleading newbies by throwing in unreliable information? They will make enough screw-ups and mistakes without outside "help".
or controlling the correctness of the strategy (this is a telling moment, when the same strategy works equally well on different instruments).
(but only with condition 1 instrument traded at a time and no more.)
Or what did you mean by "works equally well on different instruments" and what did you mean by "correctness control"?
"Open 2 neutral portfolios at the same time:
- buy EURUSD and USDJPY, sell EURJPY. I call this option a portfolio BUY;
- selling EURUSD and USDJPY, buying EURJPY. Accordingly, this portfolio is a SELL of the portfolio."
Or I don't understand something in your task or explain how I can perform these operations simultaneously on one trading account in MT5?
Well, I gave examples (screenshots) from the tester where I traded absolutely different instruments (18 pairs. I simply did not have more available in the tester...)
(but only with a condition of 1 instrument traded at a time and no more.)
Or what did you mean by "works equally well on different instruments" and what did you mean by "correctness control"?
If you have several successful trading strategies on several symbols - it gives hope that you were able to notice and use in the trade some fundamental market law, such strategies have a chance for a longer successful operation (we are talking about the fact that simultaneously trade in several instruments, when the search for trading signals and the implementation of trade operations for different instruments is carried out by the same algorithm; at the same time trade on each of these instruments is made
Your example, when only one instrument is traded at a time leads me into deep confusion and raises the question - "what is the point? What meaning did you put into such a trade? It cannot be considered as trading several instruments by the same strategy. If you had a rule of alternation of which instrument to trade when to follow some logical reasoning, perhaps it would make sense - i.e. what I was talking about earlier, a strategy built on the trading of several instruments. Have you implemented this in a systematic way, or by simple brute force, so that the condition of no more than one open position at a time is fulfilled?
You can perform an experiment: Open 2 neutral portfolios at the same time:
- Buy EURUSD and USDJPY, sell EURJPY. This is what I call a BUY of a portfolio;
- selling EURUSD and USDJPY, buying EURJPY. Accordingly, this portfolio is a SELL of the portfolio.
Observe how the profits of these two portfolios change
Of course, for the sake of purity of the experiment and visual perception of results.
Just a reminder.
Here's the link:https://www.mql5.com/ru/forum/60120
Here's a quote:
"So, you create a market-neutral portfolio of currencies (triangle):
buy EURUSD and USDJPY;
sell EURJPY.
The fact that we have a neutral portfolio is clear from the formula: EUR/USD * USD/JPY = EUR/JPY. According to the rules of arithmetic, the left side of USD is reduced and we obtain EUR/JPY, i.e. the left side is equal to the right one.
Now for the arbitrage itself.
1. Ask (of the portfolio) = Ask (EURUSD) * Ask (USDJPY) / Bid (EURJPY).
2. Bid (portfolio) = Bid (EURUSD) * Bid (USDJPY) / Ask (EURJPY).
This portfolio's price fluctuates around 1.0, with Ask usually fluctuating above 1.0 and Bid below 1.0. But during the day there are short-term fluctuations when Ask drops below 1.0 and after some time Bid rises above 1.0 !!! Classic arbitrage, with separation by the time of entry and exit from the trade. That is, when the Ask price drops below 1.0 - we buy the portfolio, when the Bid rises above 1.0 - we close the portfolio. This is a risk-free trade, as the portfolio is neutral. That is, if one currency takes a shot, the others will offset that shot."Your example of only one instrument being traded at a time leaves me deeply puzzled and begs the question - "what is the point? What meaning did you put into such a trade? It cannot be considered as trading several instruments by the same strategy. If you had a rule of alternation of which instrument to trade when to follow some logical reasoning, perhaps it would make sense - i.e., what I was talking about earlier, a strategy built on the trading of several instruments. Have you implemented it systematically, or using the usual search method, so that the condition of not more than one open position at a time is fulfilled?
http://webmaster.ayrveda.ru/Forex_Tester/Forex_Tester.html
Trading in the tester on multiple instruments is too tense on this tester.
(It's not convenient to move stops + you can't see which Take Profit you have in money, not in points, etc.).
That's why I initially decided to trade only on the 1st instrument, so as not to constantly scroll up and down and watch where and what I have in position number 21 (for example)
(ie mentally less load if you trade the 1st instrument on the simulator ...)
+ So I'm not afraid to trade on the same instrument and it may work in different situations ...
If I simply trade a certain deal and immediately move downwards (scrolling) in search of a new opportunity.
As soon as I see it - I immediately take the first instrument that appears (no matter what kind).
That's all.
And so on.
If I've come to the bottom and thease is no longer there - I start again from the top, rewinding the story for 1 hour (or sometimes more) ahead.
And then again, moving in search of the masa from the top to the bottom of the charts...