w00t! IB Trading Olympiad begins

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From what I heard concerning last years winner is that he made only a couple of "lucky" trades in the first few weeks of the competion which doubled his account and then basically sat on his lead the rest of the way through....

I am very curious to see the leader boards when posted in a week to see how big of a lead you have on everyone at this point
 
Quote from follow:


I use both targets and stops. My computer is slow and my internet connection is spotty so I would be pulling my hair out if I had to rely on my code to exit a trade. I submit a basket order then rest until I'm flat in my base currency again.
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I thought the rules prohibited discretionary trades, that all trades had to be automatic and system-driven. I recall a winner was penalized last year due to manual/discretionary trades.
 
That is true ALL trades must be submited by the trading bot... no discretionairy trades are allowed according to IB's website? Are all of your trades being submited by your trading application?
 
Quote from walterjennings:

its easy with forex. flip a coin. you have a 50% chance of doubling your money in a day. given a 0.070$ move from open value. at 200x leverage. IB must have rules about that. i would have just created two contest accounts. make one buy. the other sell. and finish the first day with 200,000$ in my account.
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No, that's 100% false. Impossible to pull off at IB. Even ignoring for the moment any multiple-registration contest rules they must have in force. You could always collude, I mean, collaborate with a partner, agreeing to share any prize money, although, sadly, not bragging rights or an offer of employment in the suburban paradise that is Greenwich.

First, maximum forex leverage at IB is set at 50:1, not 200:1. With $100K in play money, the most you could trade would be about 3.8M EUR/USD, 2.5M GBP/USD, etc.

Second, a "0.070$" daily move has not happened in any of the majors or more common crosses in this decade.

The average daily range across the majors has recently been between 50-140 pips, depending on the pair. In % terms, that works out to a much narrower range of about 0.55-0.75%. Even if you manage to enter both long and short at what will turn out to be an extreme of the day (high or low) -- and that's a pretty big "if" right there -- you may expect to gain no more than 30-35% in the winning account, while losing 50% on a margin call in the losing account. You could hope for a blockbuster day, which happens a few times a month, but any gain in the winning account will still fall far short of "doubling your money" in a day.

However, there's a catch (surprise...), and it's another biggie. Unless you happen to nail your entry point within a few pips of the extreme, you'll have a high probability of getting a margin call in both accounts within the first hour or two. The resulting 50% losses in each account will probably put an end to your noble quest for victory, before you ever get a shot. That is so unfair.

The only practical solution is to reduce your working leverage well below the limit of 50:1. That would create some breathing space, but also further cap any potential gains in the winning account, to the 20-25% range. And that's just day 1. What happens to the winning account on day 2, day 3 and so on?
 
ah you're right. i missed out on one zero when typing 0.07. i meant an expected motion for a major pair during a day is 70 pips. or 0.007$. EUR/USD at 200x leverage i believe you double your invested capital at 67 some odd pips. true that IB only allows 50:1 leverage on forex and forex futures. so that would reduce the possible daily profit.

of course you would need to leave some room to avoid margin calls on both accounts. the way i would approach it would be buy and sell using both accounts. use 50-75k of the 100k. leave the positions on for the whole course of the contest hoping that the market would trend in a single direction. reinvesting winnings in order to leave 50-25% capital as a buffer.

hoping the market will end the contest period 5*67 pips away from the starting point, and that no ridiculously big spikes caused margin calls on both accounts. given a 5*67 pip or greater final EUR/USD move at 50:1 on say 75k. you should end the contest period with over 200k, thus winning the prize money.

of course this isint a sure fire way to win a contest, and not having done any backtests with the system I have no clue what % chance these settings will work. but i am guessing probably better than 10:1 chance of winning the contest. all depending on market conditions. not bad i think? comments?

edit: another idea would be to scale out / scale in during losses / winnings. this would prevent margin calls. knowing full well if the market moves down quite a bit then trends back up over time, the losing account would scale out and end up with less capital to make money off on the swing up (bad case). but it might perform better than letting the losing account get margin called.

these 'all-in' ideas are not designed to perform well on most markets, they are to just give you a reasonable chance (1-10%), at out performing other contestants.
 
it was limited to 2000... however, i bet less than 100 are really for real.

i play the markets for money, but i figured i'd give this a shot. i really hope to take home $100k or maybe even 50k for that gallardo. ;)
 
well, you have to be a college student, but from the sounds of it, you are an experienced trader?

the market this week really sucked... JCP was a good call as was XMSR... we'll see. i wish we could manually input trades, because the code execution is a little slow... but, whatever. it's all good.
 
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