October 6, 2010 – 12:43 pm | by trader
Finally the test for the neutral hedge strategy in the linux machine started this sunday (october 3th) with the asia session opening, the expert advisor using forex.com as broker is currently running since then trading eur-jpy and gbp-jpy.
Only 2 times since the test started the criteria to open trades was met, it sound as to little but it is enough for taking some conclusions.
The first trade was made on monday:
The oscilator pass the -100 limit and a hedge trade should be open, unfortunatly the expert advisor some times fails on opening the 2 trades and open just one, in this case only GBP-JPY was opened in the long side. It is expected to this pair to go up sooner or later, this is what happened and the trade was closed with 30 pips of profits.
At that point the trade was closed with a profit of $30.01. As a first fix i will have to change the expert to make sure that both trades are open and not just one.
A second trade was opened by the expert, this time both trades were open, long gbp, short euro:
See how it looks like the oscilator touched the -100 before and no trade was opened, this is because meta trader zooms in or out the screen as the market advances depending on the volatility of the market. I didnt saw this trade in real time but i think that the oscilator never really touched that -100 while running and that is why no trade was opened.
It was a wild movment after the entry as we can see in the image of the close of the trade:
On this trade the gbp made $34.63 and the euro made $20.31. I am suspecting that the expert code exit the trade when one pair is at 30 and not when the overall profit is 30. The movemt looks very wild in the charts, this can be another explanation for this, i will see what happens in future trades. The bank of japan made statments this week, they cutted interest rates to virtually 0, maybe this was at the time of that announcement.
Another thing is that the oscillator needs a starting date to work, i am working with about 10 days in the past but i am updating the date manually as time pass. this is because the oscillator stop working when the starting date is to far away in time. As a modification of the expert i have to make the expert update this date automatically to feed the oscillator.
Here is the statement of this 2 trades:Â statement
Finally, i got an email today from forex.com, i contacted them and they told me i will need around 280 USD on the account just to be able to open a mini lot of euro-usd … for a hedge trade probably double of that should be in the account just to open the trade. That is just the minimum, i think i will need at least 1000 usd now to trade this strategy instead of the just 250 needed before.
This situation will make me search for investors when the moment of trading in real came, at the moment the strategy gets defined and the chances of success are high. The other option i have is to try to look for other broker.
If someone is interested on investing with me and with this strategy in the future please use this contact form.
from forex.com
We contacted you last week to inform you of an upcoming change to your FOREX.com account. Effective Monday, October 18, 2010 a new CFTC regulation will go into effect that limits the maximum leverage in the retail forex markets to 50:1.
The new margin requirement is 2% (50:1 leverage) for the major currencies and 5% for all other currencies (20:1 leverage). Metals will be offered at 100:1. View full list of currency pairs.
The new CFTC regulation is intended to protect retail investors in the US by preventing excessive use of leverage by traders who may not have an adequate understanding of the associated risks. We support their intention and have always provided customers with the ability to employ lower leverage ratios, based on their
Tags: correlation, ea, eurjpy, forex.com, gbpjpy, hedge, mql, neutral, pair trading
