Pair trading and multicurrency arbitrage. The showdown. - page 77
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I too have a stable 280% in 2 weeks. 6 out of 6 times were profitable and not 20% but hundreds of per cent . But at spikes can take out the account, it's not the Grail. That is, in 90% of cases will be 500% per month, in 2-3% can take out the account on sharp pin bars. Well yeah, not exactly stable.....
Stable is year after year, 20% every month. Or at least a year, every month at 20%. That's the grail.
I had 1000% for six months on the stock exchange, but there was a free situation there, I wrote a robot specially for it, but that free situation closed long ago.
Why bother?
You have two lines (yellow and red) going synchronously, point to point, repeating each other. You can see that they express something the same.
But then... they diverge.
How is that possible?
And this is on an hourly chart, not on tick or minute charts, i.e., it cannot be written off to technical arbitrage and a joint of quotes within one broker.
why the reversal and ER in pairs trading????
in pairs trading, it's the spread that's traded, not fluctuations around zero.
youcan trade both the full spread and its increment.
educate yourself
explain in detail - I don't understand.... It's possible in the LK.
here:
two instruments are taken. Their prices are divided (or subtracted) one by the other - the ratio of the two instruments' prices is obtained.
When this ratio suddenly changes, we buy one instrument and sell the other. Expecting that the index (ratio of instruments) will return to its original state.
now switch the TF to MN1 and send me a screenshot.
Found a divergence indicator in one of your posts. Euro and pound. On MN1, the divergence. are similar across the different TFs.
If you temper the GBP volatility and "narrow" it down mentally, they seem to converge, but not everywhere. On the other hand, it's not clear how this can be exploited
Found a divergence indicator in one of your posts. Euro and pound. On MN1, the divergences. are similar across the different TFs.
If you temper the GBP volatility and "narrow" it down mentally, they seem to converge, but not everywhere. On the other hand, it's not clear how this can be exploited
Wow! Norm.
All right.
First step taken. We've seen the overlay plot on MN1.
The conclusion is correct-- no way.
It's a very slow strategy.
Because these notorious slippers will diverge and flatten (whether you are lucky or not - it is unknown) for years.
In such an implementation, pair trading will not bring happiness, because the risk per trade will be as low as the profit.
One of the first more or less working realisations is placed in the branch EA by the whole world.
The indicator used is a multi-tool, which will be quite overdrawn.
There you can scratch out more profit, but you can also lose.
One more realisation on pairwise:
Who does not read my articles? -Automated Trading Systems - MQL5
The conclusion is obvious - it is already interesting.
The only difference between the two implementations is the choice of tools for trading.
That is, the main mistake that can be traced in attempts to trade pair trading is the wrong choice of tools for trading.
And the test should be done on the most senior timeframe.
And only this timeframe will show the prospects of the strategy's work over a decent period of time,
the maximum size of the spread is the main issue, it's also there,
will morally set the trader for the timeframe for which the deal will start and end,
planning of incomes, expenses,
show and tell,
because we need a strategy that is long-lasting and consistently profitable, right?
That's basically it.
And the other thing that ruins everyone is greed .
And the fundamental error of catching zig-zag in a particular tool. And bad habits from dreams about grails :-))
everyone wants to trade as the purple zig-zag indicates ?
and all TSs are orientated on it and algorithms are checked with it.
This is NOT the case in Pair/Bank trading.
On a particular symbol will be taken trades similar to the red lines - rare, with a sharp slope, less long.
Almost constantly in trading, but constantly changing the instrument, such dashes will appear on different symbols.
Forget zigzags completely.
And the other thing that ruins everyone is greed .
And the fundamental error of catching zig-zag in a particular tool. And bad habits from dreams about grails :-)
everyone still wants to trade as the purple zig-zag indicates ?
and all TCs are oriented on it and algorithms are checked with it.
This is not the case in pair/bathroom trading.
On a particular symbol, trades similar to red lines will be taken - rare, with a sharp slope, less long term.
Almost constantly in trading, but constantly changing the instrument, Such dashes will appear on different symbols.
Forget zigzags completely.
Maxim, finally a really good post
+
But in pairs, the focus is not on the red dashes, but on the maximum spread between two selected instruments that are always the same.
Based on this maximum risk is calculated and the prospects of profitability of the strategy are determined before the start of trading.
the duration of the trade determines the turnover and plans for capital growth/expenditure
And the other thing that ruins everyone is greed .
And the fundamental error of catching zig-zag in a particular tool. And bad habits from dreams about grails :-)
everyone still wants to trade as the purple zig-zag indicates ?
and all TCs are oriented on it and algorithms are checked with it.
This is not the case in pair/bathroom trading.
On a particular symbol, trades similar to red lines will be taken - rare, with a sharp slope, less long term.
Almost constantly in trading, but constantly changing the instrument, Such dashes will appear on different symbols.
Forget zigzags completely.
Curiously, purely mathematically/statistically - they are bound to be.
1) Every timeframe is hungry. It needs volatility.
2) Impulse on the senior TF - trend with small corrections on the junior TF
3) Correction on the senior TF - trend with deep corrections on the junior TF .
Fundamental factor:
1) A small player needs a price nearby
2) A big player needs the price farther away.
As a result: on each TF there are impulses, which are taken by professional traders for profit. The classic example - representatives of the new wave (3-wave ABS: impulse-correction-impulse) - they take wave "c" in wave "C" of the senior timeframe. These are the very impulses on your chart.
Representatives of one forex academy call this effect "resonance" by analogy with the real physical resonance of waves.
Curiously enough, purely mathematically/statistically - they have to be.
1) Every timeframe is hungry. It needs volatility.
2) Impulse on the senior TF - trend with small corrections on the junior TF
3) Correction on the senior TF - trend with deep corrections on the junior TF .
Fundamental factor:
1) A small player needs the price near
2) A large player needs a price further away.
As a result: on every TF there are impulses, which are taken by professional traders for profit. A classic example - representatives of the new wave (3-wave ABS: impulse-correction-impulse) - they take wave "c" in wave "C" of the senior timeframe. These are the very impulses on your chart.
Representatives of one forex academy call this effect "resonance" by analogy with the real wave resonance.
That's what's bothering you.
This is almost an exhaustive list of misconceptions. Everything that is written exists only in your head.
2) A big player needs a price further away.
I'm not a major, but I need one ;)
Would be extremely happy with black/white swans ;)