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Thread: Would this work?

  1. #1

    Would this work?

    Hey everyone, I had been scouring the internet and came across this on moneytec.com's forum. It sounds interesting and may try it on OaNda's demo. just wondering what you think!



    Since you may already know, the current federal interest rates are 4.50% to the
    USA, 2.50% to EUR, and 1 percent for CHF. So each time you buy EUR/USD, you are
    earning 2.50% APR on EUR, and shedding 4.50% APR on USD, so the brokers cost you
    that interest each night. On the other hand when you buy USD/CHF, you earn
    4.50% APR on USD and losing 1 percent APR on CHF, so you are earning 3.50%. Some
    brokers actually pay you that interest. Is among those brokers. So you
    may already understand that EUR/USD and USD/CHF are pretty much mirror images of one
    another. As one goes up, the other goes down, with minor deviations. Thus
    if
    you start both rankings, as market moves, you get pips on a single, and lose pips on
    the other, overall pretty much breaking even. You're losing 2.00% attention on
    a single pair, and earning 3.5% interest on the other. That's 1.5% APR profit.

    Now envision, with's 50:1 leverage, it is like getting 1.5%*50=75% APR!
    That's not even the most exciting part. The most exciting part is that you
    should constantly see deviation between the pairs, a few days it'll be adverse,
    and other days it'll be positive. You simply close both rankings when the
    deviation is positive, make 10, 20, 30 pips profit, and reopen the rankings. I
    did it twice this week for total profit of about 40 pips. This week, I've
    been experimenting with a $5,000 demo account, and I currently have a balance of
    $5,535.66, that will be $535.66 profit just this week. I will see if I will turn
    $5,000
    to $10,000 on demonion, and if I will, I will go live with this egy.

    The way I have been calculating my rankings to optimize this egy on
    using 50:1 leverage. I divide whatever amount I have on my own account by 0.0588.
    This gives me the lot to buy EUR/USD pair with enough margin to
    permit for deviation. It's $85,034. Then I multiply 85,034 by
    that the
    current USD/CHF rate, so in this instance 85,034*1.2899, which extends to 109,685.
    This way a pip on each pair equals to exactly the same sum of money. And I open my
    orders.

    Sounds interesting.

  2. #2
    Quote Originally Posted by ;
    Sis, you're a trip. . .where did you get 10% yearly ?

    Can you add the balances??

    Balance = 3313.05
    Balance = -16676.49
    Balance = 5871.66
    Balance = 1413.35
    Balance = -5436.10
    ------------------------
    = -$11514.53 following 5 years. . .that's NEGATIVE

    Here is how far your account would be worth following 5 years! In the event that you were to attempt to liquidate your position. That's a hole to climb out of. That may take years to grow out of that hole, if you're telling me that you're just going to wait till your equity climbs out of territory. Together with the ups and downs that may never be cleared by you. What's the point of that?

    Now, if we add in $10 a day for 365 days a year for 5 years, that is a total of $18250. . .for a GRAND account balance of $6735.47 (positive). That's 6.7percent over 5 years that is less than 1.5percent a year.
    It seems we are studying two distinct things into the very same data. You have not told me why the rankings would close for a loss if you know the position will return in your favor. So the question remains, why do you do it? Is there a reason you need to shut the place at the end of the year to get a loss? Are you compounding the equilibrium or did you start over at $100000 each year? Might it be possible that you conduct a backtest more than five years without closing the position at the conclusion of the year and permitting the balance and interest to gow and carry over year after year?
    If you can't include those items in a backtest, and those seem to be reasonable requirements, then your backtest will not give you the entire picture.
    A person please, tell me if I'm being unreasonable.

  3. #3
    What about this, rather than entering split the amount of units that you want by enter times, and say . Enter a third of your order, wait till the market is at a place, wait and enter, then enter your third your 3rd part at a spot that is different. I don't know if I am right or not if you enter many different times would not the ups and downs of the market hurt (or help) you . But it might give less drawdown and provide you less risk. Correct me if I am wrong.
    lt;! -- / message -lt;! -- sig -
    lt;! -- / message -lt;! -- sig -

  4. #4
    Two items:
    1. A $20000 drawdown on a $100000 account with no leverage, is the equivalent of a 20 pip loss on $1000 in 100:1. Who trades with a 20 pip stop loss? Most folks would be familiar with a 35 - 40 pip stop loss, the equivalent of a $35000 to $45000 drawdown. If a 35 - 40 pip stop loss is okay in is not $20000 aceptable in 1:1?
    2. Why is it that you insist on limiting the system together with time's unecessary parameter, forcing it to take losses for no reason other than it's the end of the year. That would be like forcing all traders to shut positions at 5pm EST each day than it's 5:00. That makes no sense.

  5. #5
    Oh, and one more thing...

    Quote Originally Posted by ;
    .. .and as you could NOT take a loss, if you had an account of lt; $20K you'd have produced a margin call. So. . .that basically means that you need an account larger than $20K to prevent yourself from getting too much of a drawdown (unrealized profit/loss).
    How would you suggest we purchase a regular $100k lot with $20k, you'd require some sort of leverage. The fact that you need more than $20k to purchase a standard lot at 1:1 causes this argument irrelevant.

  6. #6
    Quote Originally Posted by ;
    Oh, and one more thing...



    How do you suggest we purchase a standard $100k lot with $20k, you would need some sort of leverage. The very fact that you just need over $20k to purchase a normal lot at 1:1 causes this argument irrelevant.
    Dude...

    I am so done with this. By all means. . .please think whatever you want. It is quite apparent that we are not likely to see eye to eye with this and it is unfortunate.

    At this point, anything that I say will do nothing longer have you completely overlook the points that I am trying to create. I completely get what you're saying, but trying to make you understand my point of view is proving to be tedious. I don't have any interest in assisting you to understand these points, so please. . .just figure it out yourself.

  7. #7
    Quote Originally Posted by ;
    Dude...

    I'm so done with this. By all means. . .please think anything you desire. It is fairly apparent that we are not going to see eye to eye with this and it is unfortunate.

    At this time, anything that I say will do nothing more have you completely overlook the things that I am trying to make. I get what you're saying, but seeking to make you know my point of view is currently proving to be dull. I have no interest in helping you understand these points. . .just figure it out yourself.
    I have addressed each and each of your things, but you did not have the courtesy to do the exact same for me. You have no answers to my questions as your arguments are full of fallacies and you also lack the decency to acknowledge it. You're full and you haven't. Where's that enthusiasm? Why not take a rest and return to me.

  8. #8
    Quote Originally Posted by ;
    I've addressed each and each one of the things, but you did not have the courtesy to do the exact same for me. You don't have any answers to my own questions because the arguments are full of fallacies and you lack the decency to admit it. You were full and you haven't. Where's that enthusiasm today? Why don't you take a break and get back to me.
    You're absolutely right, you have addressed EVERY one of my factors (accurately, I'm not so sure ), and I apparently do not have the courtesy of answering your questions. . .therefore, my suggestion would be to do your own back-test or do your own forward evaluation...

    I'm keeping my results to myself, I don't see why I should share them. . .they are a complete waste of everybody's time.

  9. #9
    To isufreak24:
    that I believe you first must determine the maximum lots you may enter with the thought of the maximum drawdown that would occur - see mrmikal's calculation in previous page. You can consider if you may divide the lots to 3 and enter at 3 times or maybe not - your lot size may not allow you to do it.

    But I do think it's an ok idea to reduce the risk as it accelerates your entry. The only additional thing that you need to believe about is how far apart between each order - if you enter those order too close, then it did not have any impact. If you enter those order also far apart, you eliminate the interest that you ought to get for all those time (ie. Why don't you enter all at precisely the exact same time and collect more attention ) Therefore you need to find out it yourselft whether it's worthwhile or not.

    Hope this helps.

  10. #10
    Quote Originally Posted by ;
    Mrmikal, I am unsure what the problem is, your backtesting proved that the system makes money, at a mean rate of 10 percent each year, and you neglected to include some pretty important pieces. Additionally, you did not compund the profits . What you have proven is that there exists a means to earn at least 10 percent on your money anually without a risk. Correct me if I am incorrect, I am certain that you will.
    Sis, you're a trip. . .where did you get 10 from?

    Did you add the accounts??

    Balance = 3313.05
    Balance = -16676.49
    Impact = 5871.66
    Impact = 1413.35
    Impact = -5436.10
    ------------------------
    = -$11514.53 following 5 decades. . .that's NEGATIVE

    This is how much your account would be worth following 5 decades! In the event that you should attempt to liquidate your position. That is a HUGE hole to climb out of. That may take years to grow out of that hole, if you're telling me that you're only going to wait until your equity grows out of territory. Together with the ups and downs you might never clear that. What is the point of this?

    Today, if we add in $10 a day for 365 days a year for 5 decades, that is a total of 18250. . .for a GRAND account balance of $6735.47 (positive). That is 6.7percent over 5 years which is less than 1.5percent a year.

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