Is risk diversification even possible in the forex market? - page 2
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
I don't quite understand your example. You are comparing options where you would have entered one pair and four that are moving about the same. Assuming that our total lot is the same, it means that in both cases we lose that lot. Why "four units"? You don't compare the case of entering one pair with one lot, and four pairs with one lot !
And, apparently, it's "not always in the black", since there are losses.
But in any case, the risk is determined by the TS, and not by the number of instruments. In theory, if you have the same TS, the risk will be the same. As it seems to me, there is some sense if you have different TS - in this case, the probability that they will all stop working at once is lower than the probability that our one TS running on four instruments will stop working.
And about "impossible to program" - it means that your definition of patterns is not strict. In one case, you will identify a pattern where there is no pattern, and in the other case, you will miss a pattern where there is one.
If I had only entered 1 instrument I would have lost 1 unit in a particular situation with the pound.
And so I've lost 4 units at once, because I've entered each of them with the same risk.
Well, there are plenty of such situations.
The quid went up and everything went up with it - respectively, I have the risk of 1 quid in 10 positions at once (for example)
On the account I meant every month (or rather almost every month).
There may be minuses and zeros.
But this is still only a tester of manual strategies.
I think we can not trade in the real world like that.
I have never coded, I have never copied them, so I have no idea how to use them.
I have to study the language and I need to know the basics of programming.
(By the time I learn it, mql6 will have appeared. )
And I have no time to do all this.
I have enough to learn on typesetting as it is.
P.S. In my mind it's about all the time in the plus side with this kind of results:
1. There are different risks. For example:
-Risks associated with being in the market. These are risks related to events occurring in the market and adversely affecting the result of your open positions. For example important news releases or force majeure situations, etc;
-Risks related to the execution of your trade orders. These are the risks you run if your orders are executed below your expectations;
- the risks associated with thechoice of the direction (Buy/Sell) of the position opening.
The first and third groups of risks are addressed through a market-neutral portfolio, i.e. when you open/close all instruments at once. The second group of risks is practically unsolvable, in my opinion.
Bullshit.
Market-neutral portfolios have nothing to do with the first and second point
Did you recognise the clever phrase?
It's as simple as that.
If I had only entered 1 instrument, I would have lost 1 unit in a certain situation with the pound.
And I lost 4 units at a time, because I entered each of them with the same risk.
Well, there are plenty of such situations.
The quid went up and everything went up with it - respectively, I have the risk of 1 quid in 10 positions at once (for example)
Wait a minute, wait a minute... But these are completely different loads ! You're comparing entry with one lot, and entry with four lots ! It's clear that in the second case the loss will be four times bigger !
Usually, by diversification of risk we mean entry in four symbols with one lot, as compared to entry in one symbol with four lots !
There may be minuses and zeros.
But this is still only a tester of manual strategies.
I do not think you can trade in the real world this way.
I have to study the language and I need to know the basics of programming.
(By the time I learn it, mql6 will have appeared. )
And I have no time to do all this.
I have enough to learn on layout...
You don't have to program it. What matters is the clarity of the definition.
Let's take the simplest known pattern "hammer". Usually this pattern is understood as a bar with the body size of not more than one third of the full bar range, but not less than 20%. The upper shadow should not be more than 5% of the range. Plus adowntrend is required, say for three bars prior to that the H and L bars should consistently decrease. Plus it usually also requires a confirming post-couple, it should be bullish, the body more shadowy.
Here, only a pattern that meets ALL of these conditions can be called a hammer. If any of these conditions are not met, a trade on a hammer is not allowed.
The same is true for all other patterns.
It's much easier to let the indicator identify the patterns than to check if the body of the hammer occupies one third of a bar's range.
Scarecrow, that means you have more to learn. :)
That's not much of a commentary.
Wait a minute, wait a minute... But these are completely different loads ! You're comparing entry with one lot, and entry with four lots ! It's clear that in the second case the loss will be four times bigger !
Usually, by diversification of risk we mean entry in four symbols with one lot, as compared to entry in one symbol with four lots !
I don't quite understand... What does "manual strategy tester" mean? Are you trading on a demo account ? Or is it a special programme ? If it is a special programme, I would like to warn you - even on a demo account the results will be quite different (usually worse). And even more so on real account.You don't have to program it. What matters is the clarity of the definition.
Let's take the simplest known pattern "hammer". Usually this pattern is understood as a bar with the body size of not more than one third of the full bar range, but not less than 20%. The upper shadow should not be more than 5% of the range. Plus adowntrend is required, say for three bars prior to that the H and L bars should consistently decrease. Plus it usually also requires a confirming post-couple, it should be bullish, the body more shadowy.
Here, only a pattern that meets ALL of these conditions can be called a hammer. If any of these conditions are not met, a trade on a hammer is not allowed.
The same is true for all other patterns.
It's much easier to trust the identification of patterns to the indicator, than to try by yourself whether the body of the same hammer occupies one third of the bar range or not.
Why?
There are 5 positions each with a lot - on the 1st one I made and on the 4th one I lost.
In fact, I want to find out if it is possible to enter several positions at once with the same lot (with a risk of say 5% for each) and not to feel that one movement of quid or something else will take me out of all 5 positions.
I want to understand if it is possible to find more or less independent tools from each other.
(If anyone knows the answer to this question - I will be very grateful for its publication ...)
About the program yes - it's a forex tester-2
Normal trade on the history and no more.
(as well as tested the automated strategies in MT-5)
At the expense of the paternoster.
I do not believe in hammers and so on.
There are just situations that are worked out in my head and that's it.
I call them patterns.
Often I don't realize why this particular situation is promising.
I just have a feeling and that's it.
It's like driving a race car.
I do not think for how many degrees I turn a wheel or how many mm I press a pedal (gas, brake, clutch) to a floor.
So there's often autopilot at work.
(as in many other areas. Martial arts can also be taken for example and almost any sport or many computer games).
There are 5 positions each with a lot - on the 1st I made and on the 4th I lost.
I.e. I want to understand if it is possible to find more or less independent tools from each other.
I think you are talking about different points. The first is the total deposit load. Say you take five positions with a total risk of 5%, that one position with a risk of 5% you lose at worst 5%. But of course, if the movements of the instruments are highly correlated, there is a high probability of close results on all positions.
The second question is exactly the correlation of pairs. You just need to check if the movements of pairs are close. If the pairs are strongly correlated, the results for various pairs will be close. The correlation of pair movements was sort of performed by the people in MathLab or similar packages.
I don't believe in hammers etc.
There are just situations that are worked out in my head and that's it.
I call it a pattern.
Often I don't realize why this particular situation is promising.
I just have a feeling and that's it.
It's like driving a race car.
I do not think for how many degrees I turn a wheel or how many mm I press a pedal (gas, brake, clutch) to a floor.
That is, autopilot often works here, too.
(As in many other fields. You may take martial arts for example and almost any sport or many computer games).
Ahh... Well, good luck with intuitive trading...
Only the analogy with "racing car" is not quite correct. Because your muscles and feelings really "think" for you. It just doesn't come to consciousness. But I am afraid you are too presumptuous, thinking that you "have managed to understand the market, having worked up situations". You need to clearly formalize all the signs of these situations. Only in this case the trading will be systematic, not intuitive.
It seems that one variant is the entrance by one symbol, and the second one is the entrance by four symbols. But now it turns out that we have five tools. We should decide what are we comparing?
I think you are talking about different points. The first is the total deposit load. Say you take five positions with a total risk of 5%, that one position with a risk of 5% you lose at worst 5%. But of course, if the movements of the instruments are highly correlated, there is a high probability of close results on all positions.
The second question is exactly the correlation of pairs. You just need to see if the movements of pairs are close. If the pairs are strongly correlated, the results on different pairs will be close. Correlation of pair movements was sort of performed by people in MathLab or similar packages.
Ahh... Well, good luck with intuitive trading...
Only the analogy with "racing car" is not quite correct. Because your muscles and feelings really "think" for you. It just doesn't come to the mind. But I am afraid you are too presumptuous, thinking that you "have managed to understand the market, having worked up situations". You need to clearly formalize all the signs of these situations. Only in this case the trading will be systematic, not intuitive.
(500 people passed through the office in that time).
For 2 years in the black was only once a month (-$15).
The rest is only plus.
I left purely because of the large commission (10 years ago you can ask what it was ...).
I do not need to know how to trade and how not to trade...
If you do not know how to do it and you do not know how to do it, you cannot do it.
(And high-level traders are in the black every month.)
I am surprised that you would like such a result (grosses in the plus all the time) and you do not have it (it works) - if you position yourself as a strong trader (since I decided to give advice on intuition, formalization, etc.)...
P.S. If you think that I think so - you can read a book (if you want)
Nikolay Ludanov "Intuitive Trading".
This is what he describes in his book, this is how traders (in the company) did in 30% of cases...
I am surprised that you would want such a result (by grossing in the plus all the time) and you do not have it (if you position yourself as a strong trader (since you decided to give me advice on intuition, formalization, etc...).
Nah... I'm an amateur... And I'm nowhere near your results. It's strange that you're asking questions like that when you're doing so well.
+ on nysa I've only worked as a scalper.
(And there's a ribbon of open bouquets, etc.)
So everything is different.
Now I have to completely retrain...
(in a sense from scratch).
+ I am asking because I am not familiar with Forex.
I do not understand well what moves with what and how in terms of correlations ...
(and I am not familiar with global indices (I think they should be), which may indirectly (or even directly) affect some or other forex instruments).