Ring - page 22
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I decided to experiment with the rings. For this purpose I have formed several micro-rings. For example, here is one of them: buy 0.1 EURUSD + sell 0.1 GBPUSD + sell 0.1 EURGBP. These 3 open positions have been suspended for almost a month, equity (not considering swaps) has been fluctuating from -30 to +56 USD during this time. I do not close the positions, I observe. Other micro rings behave similarly. It appears that if the range where equity fluctuates is static or close to it and it is defined correctly, we may trade micro rings from the border inwards. Questions for connoisseurs:
1. Are there any range boundaries, and can they be determined and what do they depend on? What is your estimation of trading prospects?
2. Do I have the right micro-ring open if I consider the main task to balance it as much as possible? (I suppose I need additional weighting coefficients).
3. How to properly balance, to balance pairs in a micro-ring? Obviously, the point value and volatility should be taken into account?
4. Can balance be achieved or will the micro-ring end up being unbalanced anyway? At the expense of what?
5. Is it possible to construct a micro-ring equity indicator? I do not mean an indicator similar to Surgeon who would accumulate the statistics online but an indicator that would show the micro ring equity value in the past similar to the indicators in MT4 Spread Trading. It should be emphasized that it is not the composite symbol price that should be displayed here but the equity which depends on the quote currency of the pair (it changes on the history) and probably other factors.
Compare the equities charts of the ring and GBPUSD. And post them for us to see, if you don't mind.
Unfortunately, there are no charts. I turned on my PC 1-2 times a day and wrote down the extreme values of equity on a piece of paper. First of all I was interested in the presence of fixed limits of the supposed range and their value, though now I understand that there should be (and probably a considerable) dependence on other currencies, in this case on GBPUSD.
I decided to experiment with the rings. For this purpose I have formed several micro-rings. For example, here is one of them: buy 0.1 EURUSD + sell 0.1 GBPUSD + sell 0.1 EURGBP. These 3 open positions have been suspended for almost a month, equity (not considering swaps) has been fluctuating from -30 to +56 USD during this time. I do not close the positions, I observe. Other micro rings behave similarly. It appears that if the range where equity fluctuates is static or close to it and it is defined correctly, we may trade micro rings from the border inwards. Questions for connoisseurs:
1. Are there any range boundaries, and can they be determined and what do they depend on? What is your estimation of trading prospects?
2. Do I have the right micro-ring open if I consider the main task to balance it as much as possible? (I suppose I need additional weighting coefficients).
3. How to properly balance, to balance pairs in a micro-ring? Obviously, the point value and volatility should be taken into account?
4. Can balance be achieved or will the micro-ring end up being unbalanced anyway? At the expense of what?
5. Is it possible to construct a micro-ring equity indicator? I do not mean an indicator similar to Surgeon who would accumulate the statistics online but an indicator that would show the micro ring equity value in the past similar to the indicators in MT4 Spread Trading. It should be emphasized that it is not the composite symbol price that should be displayed here but the equity which depends on the quote currency of the pair (it changes on the history) and probably other factors.
http://goodservice.su/forum/69-4233-1
https://www.mql5.com/go?link=http://goodservice.su/forum/69-4233-1
This is different: they calculate the PRICE of the cross on the majors and if it differs greatly from the calculated one, they open on the cross towards the calculated one.
Compare the charts of equity of the ring and GBPUSD. And post it for us to see, if it is not difficult.
I am duplicating my notes instead of charts:
-5.5 (loss on total opening spread),
-13,
-30,
+2,
+18,
+23,
+36,
+56,
Only the extreme values were recorded. Didn't record any dates. Now +14. The micro-ring was opened on May 7; it is clear that the equities chart of the ring does not practically coincide with the pound chart. The moment when the ring was opened is marked on the screenshot.
This is different: I calculate the PRICE of the cross on majors, and if it differs much from the calculated one, they open on the cross towards the calculated one.
We have currency pairs A and B and their cross A*B=C
As you understand, A+B or A-B will never equal C, not counting trivial cases. In mathematics, + and * have such a large difference that in our case the sum or difference of A and B forms a new exchange rate that is not the same as A*B. I.e. the triangle obtained by the sum or difference of rates and the cross creates a chart whose parameters differ little from those of any currency pair. And no "fluctuation around 0" is out of the question.
We have currency pairs A and B and their cross A*B=C
As you understand, A+B or A-B will never equal C, apart from trivial cases. In mathematics, + and * have such a large difference that in our case the sum or difference of A and B forms a new exchange rate that is not the same as A*B. I.e. the triangle obtained by the sum or difference of rates and the cross creates a chart whose parameters differ little from those of any currency pair. And no "fluctuation around 0" is out of the question.
We have currency pairs A and B and their cross A*B=C
As you understand, A+B or A-B will never equal C, apart from trivial cases. In mathematics, + and * have such a large difference that in our case the sum or difference of A and B forms a new exchange rate that is not the same as A*B. I.e. the triangle obtained by the sum or difference of rates and the cross creates a chart whose parameters differ little from those of any currency pair. And no "fluctuation around 0" is out of the question.
I am trying to explain it on my fingers (the topicstarter by the way, I failed to do it).
We bought 10,000 Euros (in dollars, which is the deposit). Now we have sold 10000 pounds (for dollars, they have a deposit), and sold another 10000 Euro (for pounds, while the deposit we have in dollars, so we buy a pound for a dollar), the total with the conversion rate of 0.8375, we bought 8375 pounds. Euro is balanced (sale of 10,000 compensates for the buy of 10,000). And here on the pound a discrepancy. £1,625 has been undersold to us. All currencies have different values, and the deposit (aka wallet) - it is one and it too has its own currency measurement. And it turns out that these 1625 pounds (or 0.016 of a lot) we need to add to make a full correction. Then the ring will close completely, but it will have absolutely no meaning, a net loss of 3 spreads. Bottom line - if you open a position for 0.016 lots (theoretically) instead of the specified pairs, then
- get the same result;
- save 3 spreads.
So the logical question arises: does this trading makes sense? We trade several pairs instead of 1, the essence of trading does not change. Instead of 0.1 lot we trade 0.016 lots (in this example) and are happy that the account is not losing, and sometimes we even gain. Decrease your trade 10 times and it will be the same. :)