T101 basket trading system - math analysis - page 6
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Interesting, But Complex
Hi,
T101 seems like an interesting trading strategy, but there are just so many posts about it, and it just makes things all the more complicated.
But from what I have read (and I havent read everything), here is my understand of the general rule:
When the overall pairs trend is bullish, buy all 14 pairs.
When the overall pairs trend is bearish, sell all 14 pairs.
Now to determine, the overall trend, T101 has thought of the IA, to analyse and determine the trend, and there are also EA's like profitCALC etc. Again, this is very complicated, and I believe in K.I.S.S.
So, using the same logic of T101, I would like to introduce a new method, which is very simple (I havent tested to see if it works):
We have the following pairs:
1. GBPUSD 8. EURUSD
2. EURGBP 9. USDJPY
3. GBPJPY 10. AUDUSD
4. USDCHF 11. NZDJPY
5. NZDUSD 12. GBPCHF
6. AUDJPY 13. CHFJPY
7. EURJPY 14 EURCHF
Trades 1-7 go short, trades 8-14 go long.
Next we want to find the hourly trend of each of the pair, so for this I go to Streaming Forex Rates , FX street have a trend index which determines the direction of the trend, on whatever time frame you choose.
From the above pairs, we have the following results on 15 min timeframe:
1. GBPUSD - Bearish 8. EURUSD - Bullish
2. EURGBP - Bullish 9. USDJPY - Bearish
3. GBPJPY - Neutral 10. AUDUSD - Neutral
4. USDCHF - Bearish 11. NZDJPY - Neutral
5. NZDUSD - Bullish 12. GBPCHF - Neutral
6. AUDJPY - Bullish 13. CHFJPY - Neutral
7. EURJPY - Bearish 14 EURCHF - Bearish
So from 14 pairs, we have 5 bearish, 4 bullish, and 5 neutral.
We have no trade here because, it is a mixture, and no clear trend direction.
Or we can analyse it a different way:
1-7 is short (Overall trend is neutral)
8-14 is long(Overall trend is Very Slightly Bearish)
From the 14 pairs, we have more bearish, than bullish or neutral;
So the signal for the opening is Bearish for all pairs.
However, this analysis is based upon the week ending data, and I do not think it is very accurate.
The best time to trade this method is on London Open, with the analysis done within into 1-2 hours into london open, and the trades open shortly after. As the first few hours before and after london open time, tend to determine the trend for the rest of the day.
Just a thought, maybe somebody give better methods and times of trading using only the trend indicator, from websites like forexpros.com, fxstreet.com etc.
Sell all 14 pairs on sunday. Take profit $500
Thanks @all for the feedback!
Let me take the opportunity to answer your questions:
1. The indicator starts with the opening of the market at the beginning of each week.
2. Spread is taken into account
3. I know about the "pair disappearing" bug (slot becomes black), almost fixed
Now, let me comment the various wishes and suggestions:
@IamThat: Well, it is quite easily possible to also have a Daily set displayed. I'm just wondering how to place it on the screen? Can you (or someone else) suggest where exactly to display a Daily set?
@iwjw: Time since last trend change can be done easily. I'll include it in the next bug fixed release. An optional log-file is no big deal either. Can you please specify which informations you exactly want in the log file?
@Nopik: Indeed you are right, I "Sum buys" and "Sum sells" is swapped - already fixed this. I think that adding a "start time" display is quite obsolete, because start time is always opening of the market at the beginning of the week. Don't you think so? No commission or swap is included, because the indicator only monitors price action - in accordance with Julius IA idea. All prices are calculate from the opening of the market beginning each week.
The indicator should handle symbol suffix autodetection. Unfortunately, I can't test it. Is there any broker that has demo accounts with strange suffixes?
I know there are still some small bugs, and I'm working on fixing them (luckily not all of them have been discover yet...
). Expect a new version shortly.
My intention was to use this indicator to make more profit using jumping pairs. From my experience they usually give good profit with almost no risk. Especially if you spot a jumping pair with the indicators help, wait if it doesn't jump back for a few minutes (watch "Time since last jump"), and increase your positions if the pairs start moving to position 1 and 14. Close your position if it retraces back 2 positions. I don't know if this is the optimum or even recommended way of trading jumping pairs, but at least for me it gives some good pips.
Any comments, criticism or suggestion is always welcome.
Cheers
AndyAndy:
Any updates on your new version?
Next we want to find the hourly trend of each of the pair, so for this I go to Streaming Forex Rates , FX street have a trend index which determines the direction of the trend, on whatever time frame you choose.
Nice approach, thanks. I'll try it next week.
How you check the trends with the url you provided? Was the url correct? Or you do read Chg% column?
Nopik:
Use the trend from Forex | Forex Trading | Currency Trading | Forex Brokers
Find out which timeframe works best, and what time to use it. It would be more simple if you could just enter the trade the same time everyday.
@thor
Yes, new version is ready, but still doing some final testing.
- Logging o trend changes to files is done
- showing the time passed since last trend change is done
- small bug fixes adjusted
I'll release the new version soon.
Cheers,
Andy
P.S. It would be possible to show daily date, but I don't think it will be a real benefit. If you need different time frames shown at a glance, I highly recommend using Orest T101 indicator...
@thor
Yes, new version is ready, but still doing some final testing.
- Logging o trend changes to files is done
- showing the time passed since last trend change is done
- small bug fixes adjusted
I'll release the new version soon.
Cheers,
Andy
P.S. It would be possible to show daily date, but I don't think it will be a real benefit. If you need different time frames shown at a glance, I highly recommend using Orest T101 indicator...Updates?
Still Testing?
Hi guys,
I don't look in on this forum too much, though I've been recently interested in the basket concept and full marks to Nopik for the comprehensive analysis.
I've thought for a long time that it must be possible to collect together pairs of currencies which are theoretically hedged and scoop off profits in the profitable cycle.
This is very similar to arbitrage in that we're looking at net value 0 in theory, however the reality regularly cycles between relatively small profits and losses. The theoretical net value of 0 means means that we have minimal risk and the cycles mean that we should have guaranteed profits provided we wait for the profitable cycle to come around.
The T101 system seems to skew this theory in our favour by trading indicators (e.g. movements between slots) which indicate a trend change and which should put us much more heavily into trades on the profitable part of the cycle.
There's quite a sophisticated EA (BasketBull) which has been developed on the Russian Alpari forum to trade T101 baskets which I think you may be interested in. I can't give you the links to the originals because I've not got enough posts in this forum, however I've attached them here.
I've roughly translated all the code to English to try and understand how it works and enclose that too along with the Russian manual and very rough English translation of the same manual (which will need a fair bit of work).
I don't really understand the T101 system enough yet to make any use of this EA, though you may find it handy in your investigations.
From what I can see, the EA can be run in totally automatic mode, semi-automatic or manual. This should be an invaluable tool in trading the T101 system and I'll be interested to hear how you experts get on with it.
Updates
Hi all,
It was been a while since I posted here, so let me give some updates. I've been trying to trade this system for last few weeks, the results are quite optimistic, though not amazing. The system indeed needs a lot of manual discretion, yet once somebody gets used to it, it definitely can be profitable.
Please note, that so far I've been trading 100% by EAs, never seriously tried to trade manually on my own, this is first time. So, my account after 3 weeks is on small positive side now (+21%), though it was on +40% after first week. Second week was strongly negative, went down to -26% (though I made some stupid mistakes and most of it was lost in single whipsaw). Third week was good again. These results are not amazing, and I do not know what will be average over many months, yet, having said the above about lack of experience, I consider this to be a success so far. Also, please bear in mind, that I do not spent much time with this system - less than 10 minutes per day. And I'm making trade decisions in a matter of seconds, after quick glance over few indicators and price itself. So, it can be improved, definitely
From my observations, the 560 USD SL is really tight. Yet, if you do correct decision, you rarely go near it. I also relaxed some TP rules, as they were tight and tended to close trades on slightest pullback.
Will keep you posted.
@echelon - thanks, I will try it out as well.
Hi Nopik,
Add "www" and fill in the '.' to this: "fxfreeseminar com/Forex/BTS/trading-results aspx" and check out the results (I can't post links until I get 10 posts
).
Some very impressive pip hauls there and you can click into the statement for each day. I only checked a few, though it looks as though T101 is trading 14 pairs with the bulk in one direction and a few in the other.
I believe that the system as he uses now is more advanced than the original system (which could probably help you avoid those losing weeks), though I think the only way to find out all the new methods is to pay for a seminar or special mentoring.