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#1 May 8, 2010 09:44:00

dr_zeus
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Synthetic Grid Balance

MW - start a new trial if you want, but stay in the game.

Enoch - this week was an excellent test of your theory. In practice, my "hedge" did get heavily weighted. Partly due to my fault, since I need to grid USDJPY tighter so I wasn't buying enough USD.

MW - you're right that I take a position at some point. I really don't see a way around that since the only way to make money is through exposure. I control risk by using orders to re-enter the trade if it moves the wrong way. Yes, I would lose a bit, but I the risk to reward is usually pretty good.

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#2 May 8, 2010 10:50:00

blowback
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quote:
Originally posted by Mutant Wizard:
... After I figured out waht happened I ... here are the graphs.


Your sixth chart should be titled:

"Margin available v. Margin used"

not "Mergin used v. Margin available"

Also the graph label should be "Margin Used" not "Mrgin Used".

No, I am not trying to give you a hard time--just want to help you ensure that your metrics are consistent.

Take care and trade well...

[ May 08, 2010, 10:59 AM: Message edited by: Blowback ]


...slow down love, please chill, drop the caper...

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#3 May 8, 2010 17:04:00

MrWizard2U
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Synthetic Grid Balance

quote:
Originally posted by dr_zeus:
MW - start a new trial if you want, but stay in the game.

Enoch - this week was an excellent test of your theory. In practice, my "hedge" did get heavily weighted. Partly due to my fault, since I need to grid USDJPY tighter so I wasn't buying enough USD.

MW - you're right that I take a position at some point. I really don't see a way around that since the only way to make money is through exposure. I control risk by using orders to re-enter the trade if it moves the wrong way. Yes, I would lose a bit, but I the risk to reward is usually pretty good.

I am not going to start a new game. I'll just continue this one. Making mistakes is really what I want to avoid and keeping a reminder of what it does to the account is not a bad way to minimize the recurrences. The other reason is that developing a huge grid is really the purpose of this trial. What I am trying to show is that at some point in time this becomes a simple gathering exercise. The mistake doesn't change that. It only affected the short term increase in the spread between balance and NAV curves.

quote:
Originally posted by Blowback:
quote:
Originally posted by Mutant Wizard:
... After I figured out waht happened I ... here are the graphs.


Your sixth chart should be titled:

"Margin available v. Margin used"

not "Mergin used v. Margin available"

Also the graph label should be "Margin Used" not "Mrgin Used".

No, I am not trying to give you a hard time--just want to help you ensure that your metrics are consistent.

Take care and trade well...

Thanks for pointing it out. Will fix.


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#4 May 8, 2010 17:38:00

MrWizard2U
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Synthetic Grid Balance

quote:
Originally posted by dr_zeus:
MW - you're right that I take a position at some point. I really don't see a way around that since the only way to make money is through exposure. I control risk by using orders to re-enter the trade if it moves the wrong way. Yes, I would lose a bit, but I the risk to reward is usually pretty good.

This is where I disagree. At least I disagree to some degree. The dynamics of the market guarantee that you can trade without taking a side but you can do this only in the range capture stage which gives you a starting trading opportunity, pumps up your balance and locks in your maximum possible UPL. In order to be able to continue trading within the same range you have to take a side but the good thing is that the market dynamics guarantees that you do not have to enter with high exposure. It means that you will always have at least 1 or 2 positive trades on one side or other volume of which will not exceed NAV. All you need to do is keep alternating the exposure side by closing trades and re-inserting the appropriate orders. If you keep this exposure within the account equity then you never risk the account to an MC.

zero would say what if the big one comes along and runs away from you. I would say its only one or 2 trades I need to open or close to prevent the big one from doing even minor damage let alone major damage.

Here is the FXCM trial. Like I posted a bit earlier I made a mistake and hit close all trades(124) when I intended to close only 2. Thursday and Friday I been rebuilding the grid.

As you will notice I switched to NZD/JPY wanting to use the most volatile pair in existence. Volatility is what provides opportunity.

Thursday
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After a day and a half of rebuilding the grid. The loss is due to spread difference. When the market spiked to the grid top the spread widened and I ended up opening 2 more long trades then short. At some point in time given the opportunity I will correct this but for the time being I am treating this as balance as neutral exposure.
 -

[ May 08, 2010, 05:50 PM: Message edited by: Mutant Wizard ]


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#5 May 8, 2010 19:37:00

blowback
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Synthetic Grid Balance

quote:
Originally posted by Mutant Wizard:
As you will notice...

You should erase / hide the account number from the screenshot you posted.

Of course, if it is a demo account that you opened via a proxy with anonymous email etc. this is a not an issue.

[ May 08, 2010, 07:52 PM: Message edited by: Blowback ]


...slow down love, please chill, drop the caper...

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#6 May 8, 2010 20:38:00

MrWizard2U
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The account is there so that you can all see that it is the same account all the way through. Besides you are right the details used to open the account are totaly scrambled.

Here is the result of 2 days of developing the grid.

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 -

 -

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 -

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#7 May 8, 2010 21:50:00

emmison
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Synthetic Grid Balance

 -  -  -


It's just a ride...

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#8 May 9, 2010 10:44:00

blowback
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Synthetic Grid Balance

quote:
Originally posted by Mutant Wizard:

The account is there so that you can all see that it is the same account all the way through...

Okay, so why is not "game over" in week 30 when your "Running Equity" falls to -100% ?

Consider the IBFX clarification posted on February 1, 2010 at:
http://forexmagnates.com/interbank-fx-ibfx-explains-how-its-margin-call-works

"Accounts trading with 100:1 margin levels are subject to a margin call when the equity in the account is equal to or lower than 50% of the margin posted. Once this unfortunate situation occurs the Interbank FX trader 4 platform closes trades automatically. Trades are closed in order beginning with the largest loss trades are closed until the equity in the account exceeds the 50% threshold."

Yet, your chart 4 i.e. "Bi-directional NZD/JPY Projected 1 Year Balance/Equity" extends "Running Equity" to -150% e.g. week 52.

In other words, would you not get margin called when "Running Equity" hits -50% e.g. week 16?

No, I am not trying to give you a hard time or mirror this system etc. as my strategy is entirely different.

The reason I responded to this thread is because your first screenshots (posted on page 2 of this thread) tracked NAV "Net Asset Value".

Now your latest screenshots (posted on page 12 of this thread) track Equity.

So I am wondering (for any arbitrary strategy) what the differences in Equity versus Net Asset Value might be?

Specifically, across various broker dealers--perhaps this accounting difference is exploitable under certain conditions?

However, I do not want to sidetrack / derail this thread so I will not post more.

Good luck!

[ May 09, 2010, 11:14 AM: Message edited by: Blowback ]


...slow down love, please chill, drop the caper...

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#9 May 9, 2010 15:59:00

MrWizard2U
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Synthetic Grid Balance

Hold on mate. I don't expect the equity to ever fall below the initial couple %. Projection is based on past performance and the first week equity is bound to be really bad due to only capturing new range.

These are two different trials. NAV and equity is tracked on two different accounts. NAV at an Oanda account and Equity at the FXCM account. Otherwise there is no difference between the two. At least not as far as I am aware.

Systems are basically the same. Bi-directional griding. The difference is that its done synthetically at Oanda. There are a few other minor differences but will get to that when the time comes.

Please keep posting. Any criticism is good. It opens my mind to things I may have missed thinking on my own.

[ May 09, 2010, 04:01 PM: Message edited by: Mutant Wizard ]


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#10 May 16, 2010 07:37:00

MrWizard2U
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Synthetic Grid Balance

Wasnt able to trade properly this week. I used up my bandwidth allowance and the connection reverted to dial-up speed. But here is what I got.

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If you are afraid of doing something there is no better reason for it!
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