If the other pairs were thrown in, their trade sizes would be divided over the TOTAL portfolio pairs. No additional risk would be taken. The reason for the dilution would be to capture the different timeframes of volatility as fast as possible. There is a slight acceleration of realized due to the percentage default trade ticket, giving a slight martingale.
Elite Trader's Gambler's Anonymous ETGA
- Thread starter ElectricSavant
- Start date
- Status
ok revised calculation for you, 30 pips apart
move from 1.55 to 1.90
drawdown? 218 000 pips
and there is NOWAYS you will profit 300 pips per day on gbpusd using a 30 pip system, you may take in 20 000 pips during that run
so you still have a drawndown of 200 000 pips in just 4 to 6 months months - and that is only 1 pair!
$50 000 account trading 10 cents a pip - unrealized loss of $20k
and again, that is just ONE USD PAIR
throw in the others and you would get account wipeout easily
to trade this safely it would have to be at such a low leverage (like 1 cent a pip on a 50k account), you are better off putting your money in a CD
move from 1.55 to 1.90
drawdown? 218 000 pips
and there is NOWAYS you will profit 300 pips per day on gbpusd using a 30 pip system, you may take in 20 000 pips during that run
so you still have a drawndown of 200 000 pips in just 4 to 6 months months - and that is only 1 pair!
$50 000 account trading 10 cents a pip - unrealized loss of $20k
and again, that is just ONE USD PAIR
throw in the others and you would get account wipeout easily
to trade this safely it would have to be at such a low leverage (like 1 cent a pip on a 50k account), you are better off putting your money in a CD
Hopefully you're getting started at a good time.
Check out the quarterly chart of the GBP/USD attached.
This system likely would have profited handsomely from 1987 to 1992 as the pair was range bound between 1.50 - 2.00
I haven't heard you mention it directly so I'll just say one last thing.
You have to add some way to remove profits from the system in a calculated way.
I believe while running this system you will find that if you track the range from initiation of your system you may find your account balance peaks (realized & unrealized) when the price is trading at the exact middle of the range.
This is the time to take some profits out.
In my perspective there are no profits until they are out of the trading account and stored or spent.
Check out the quarterly chart of the GBP/USD attached.
This system likely would have profited handsomely from 1987 to 1992 as the pair was range bound between 1.50 - 2.00
I haven't heard you mention it directly so I'll just say one last thing.
You have to add some way to remove profits from the system in a calculated way.
I believe while running this system you will find that if you track the range from initiation of your system you may find your account balance peaks (realized & unrealized) when the price is trading at the exact middle of the range.
This is the time to take some profits out.
In my perspective there are no profits until they are out of the trading account and stored or spent.
The hard part is to build the pool....
slight martingale would not even make a dent in a strong move like that, you talking 100% ROI? so in 4 to 6 months, its about 30-40% - so boost your realized profits and money "banked" by 30-40%, still doesnt help all that much IMO
look at all the other USD pairs electric
instead of helping you it makes the whole thing much worse
they all will post massive unrealized losses
look at all the other USD pairs electric
instead of helping you it makes the whole thing much worse
they all will post massive unrealized losses
jasonjm,
How are you calculating all this so fast? How do you get my money banked that low?
Michael B.
How are you calculating all this so fast? How do you get my money banked that low?
Michael B.
to safely "build the pool" you will have to use such low leverage it makes the whole idea questionable
lets take a $100k account that can withstand a severe GBPUSD move, say 3500 pip move
that is a drawdown of 200 000 pips
at 5 cents a pip, that would mean unrealized loss of $10k which is acceptable (remember lots of other pairs would also post a big unrealized)
so trading gbpusd for 5 cents a pip on a 100k account yields what? maybe $10 a day
multiply by 250 trading days
$2500
now actually that isnt looking so bad to me as long as the range comes back
$2500 a year x 10 pairs (sympatico trades too many correlated pairs imo)
thats $25k per year - that is actually a VERY VERY good return, slightly more with martingale, maybe $30k? 25% to 30% ROI
so answer my own question,
*****i guess this system can work*****
but I bet after laying out these caclulations, the MARGIN TO TRADE AT IS WAY WAY WAY lower than anyone dare dreamed of
lets take a $100k account that can withstand a severe GBPUSD move, say 3500 pip move
that is a drawdown of 200 000 pips
at 5 cents a pip, that would mean unrealized loss of $10k which is acceptable (remember lots of other pairs would also post a big unrealized)
so trading gbpusd for 5 cents a pip on a 100k account yields what? maybe $10 a day
multiply by 250 trading days
$2500
now actually that isnt looking so bad to me as long as the range comes back
$2500 a year x 10 pairs (sympatico trades too many correlated pairs imo)
thats $25k per year - that is actually a VERY VERY good return, slightly more with martingale, maybe $30k? 25% to 30% ROI
so answer my own question,
*****i guess this system can work*****
but I bet after laying out these caclulations, the MARGIN TO TRADE AT IS WAY WAY WAY lower than anyone dare dreamed of
jasonjm,
I accept the carry of the unrealized.
I need to know how to go about calculating Oanda's trade tickit in percent based on the pair traded. The percent will be different because of the differing 10Y ranges. I have using a current condition of Drawdown to make it variable. But I need to get the base.
Thank you for your time.
Michael B.
I accept the carry of the unrealized.
I need to know how to go about calculating Oanda's trade tickit in percent based on the pair traded. The percent will be different because of the differing 10Y ranges. I have using a current condition of Drawdown to make it variable. But I need to get the base.
Thank you for your time.
Michael B.
unless someone can show me where i went wrong in my calculations, the correct trade ticket size on oanda (at 50:1 leverage) would be about
0.02%
(that is assuming 30 pip gbpusd short/long entry spreads and TP)
(Also assuming trading 10 of the least correlated pairs)
at those settings I doubt that unrealized loss will go much beyond 30% of total account even in worst case scenarios
0.02%
(that is assuming 30 pip gbpusd short/long entry spreads and TP)
(Also assuming trading 10 of the least correlated pairs)
at those settings I doubt that unrealized loss will go much beyond 30% of total account even in worst case scenarios
jasonjm,
That seems reasonable to me.
Now for the pairs.
Here is sympatico's list.
AUD/JPY
AUD/USD
CHF/JPY
EUR/AUD
EUR/CHF
EUR/GBP
EUR/JPY
EUR/USD
GBP/CHF
GBP/JPY
GBP/USD
NZD/USD
USD/CAD
USD/CHF
USD/JPY
I also trade three pairs in another interest carry system (SYSTEM#2), so when choosing from Sympatico's list I need to rememebr I already have these three:
AUD/JPY
GBP/CHF
EUR/HUF
Should pairs be chosen that have the narrowest 10Y ranges? Or it just the independance of correation? There will only be three pairs if the latter is true.
Michael B.
That seems reasonable to me.
Now for the pairs.
Here is sympatico's list.
AUD/JPY
AUD/USD
CHF/JPY
EUR/AUD
EUR/CHF
EUR/GBP
EUR/JPY
EUR/USD
GBP/CHF
GBP/JPY
GBP/USD
NZD/USD
USD/CAD
USD/CHF
USD/JPY
I also trade three pairs in another interest carry system (SYSTEM#2), so when choosing from Sympatico's list I need to rememebr I already have these three:
AUD/JPY
GBP/CHF
EUR/HUF
Should pairs be chosen that have the narrowest 10Y ranges? Or it just the independance of correation? There will only be three pairs if the latter is true.
Michael B.
- Status