Discussion in 'Forex' started by ElectricSavant, Dec 29, 2011.
I found this out in the public Domain.
This EA illustrates a grid without any indicators with a mindless progression of trades throughout a range.
Below is the monthly chart of the EUR/GBP showing the dates from 09/01/1990 to the date of this post.
Notice that on 12/01/08 a high was realized of 0.9800.
Notice that on 05/01/2001 a low was realized of 0.5680.
This instrument has seen a range of 4,120 PIPS over the last 21 years and is currently trading towards the
high end of the range roughly 1400 or 1500 pips away from the all time high.
What does this mean for the Super Money Grid EA ?
If your grid space is 15 PIPS that would mean that you should prepare for 275 open positions. 1:500 leverage for
you global traders would equate to about $500.00 of margin cost. If the balance of the trades were all one
direction then maybe 1K of margin would be needed.
The nature of the super money grid is to keep trading the back and forth movements and to realize profit during
the carry. This profit from the movement should exceed the cost of carry and allowing for the entire historical
range should net you 50-100% yield per year with a reasonable risk.
The biggest risk is if the EURO collapes..or your dealer takes off with your capital. A secondary risk is if 4,120 PIPS
of range is exceeded (this would take several years and you could add capital if needed).
If my math is correct. Start capital of two to three thousand USD per dealer with 1:500 leverage could net you a
nice income, considering this is a set & forget type of investment.
My math is based upon 10 cent a pip trade sizes without martingale or other progression and a grid size of 15
and a tp of 15.
Would some of the mathematicians check my math and correct me where I am wrong please? Remember some
offshore dealers treat longs and shorts as one trade, so when calculating your FXMath take that into account.
This sentence quoted below may be incorrect. As I watch the Super Money Grid trade, It uses
another routine than I originally thought. All of the trades are not spaced 15 PIPs apart.
There are more trades than that...
I think what is happening is when it goes to the short swing it closes out some sells...and leaves the
buys open... then on its way back up it starts the 15 PIP grid again, which is out of synch comapared to
where the open trades were left.
Well...anyways you guys have the code and maybe you can figure it out and post.
Does this method usually have a large unrealized loss? Would something like this survive a may 6th 2010?
Never dabbled or really looked too far into grid methods but they look interesting none the less.
Well I took the highest and the lowest of the last 21 years zr....
If you put 2 or 3k in and use 0.01...well theoretically you could survive..assuming you are offshore with 1:500.
My earlier tests saw no more than 30% drawdown on a 1K
account with a 10 pip grid and TP...since then I goosed it to 2K
and made it a 15 PIP grid and TP and decided to post
it here for input.
The mathematicians here can get it down to the penny with their calculations...
I did all of this in my head and my experience. (HeHe maybe thats where it will fail ☺
Right now there are 10 open positions after a few hours and it has banked 1/4 of 1% of 2K.
P.S. anyways I hope you folks find this to be a good read
and that you get some inspiration from it...kinda like porn...
P.P.S. I got a lot more stuff that I waste my time with
if you guys like this sort of stuff. I got about 5000 EA's that I
have not even made a dent in.
It would have been banking a lot of profits on that kind of
bar (May 6th 2010) I suspect.
This is not a martingale or progression...and can survive
more swings than that one day...it can go for years
banking profits and if the math is right it can be self-
sustaining if you do not want to withdraw profits I suspect.
Deep Pockets is what it takes and good FX math (and a longer forward test).
P. S. Here is the question...could you tolerate making
50% a year for 21 years and never trade again...?
just check in to your EA's at the different dealers
from time-to-time? (If it were only that easy)
I woke up to 9 bucks more in profits...so in under 24 hrs
this EA banked $14.17 thus far.
There is $75.07 in drawdown and the question is...
Is time on my side and will the back and forth
motion of the price cause the profits to grow and the
drawdown to stay the same or grow faster
than the profits?...how long will it take for the
profits to overcome the drawdown? Will the price continue
in one direction for years to come ? Hint: the profits will eventually
overtake the drawdown, even with the cost of carry.
Other questions might be: Have I sized enough
capital for this type of grid? Have I oversized?
Could I start smaller and not tie up so much capital
in the beginning and funnel capital into my
account as it is needed? What would be the
formula for that? There is no way I will see 4,000
PIPs in one day.
Here is another question... Does the grid widen?....Does it continue to widen to where the price
just trades between it racking up cost of carry? We shall see...
Well anyways folks...I hope this is a good read
for you and I will report often until I see that I will blow up.
We all know we are waiting for that to happen. But
meanwhile we will ponder the journey and ask
the questions that go through all of our trading minds.
Where are the mathematicians? Could it be
that Electric sized this up correctly in his head?
I doubt it...
I know all of the traders residing in the USA (which there
many here in ET) regret that they cannot trade this EA.
There is no hedging...FIFO rules and only 1:50
leverage. This was decided for you from Senators
who have never traded Forex.
For those of you that think that they can trade offshore...
Well you might be taking a chance with that. I would
definatley question the integrity of the dealer who
does business with the communist nation of the USA.
When taxes go up and the enforcement budgets
get created...well the sky is the limit..Americans
blindly allow Government to supress the people,
in the name of "We are protecting you".
But isn't this fun to read?...it's kinda like
dangling candy in front of a child. And
catering to the rest of the world who
can trade this.
for your eyes only....
Separate names with a comma.