Pair trading and multicurrency arbitrage. The showdown. - page 299
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Well, that indicator’s input formula isn’t the same as yours. That’s why the signals are different.
And another thing: why do you need i-Equity? To monitor drawdown? It’s better to see that as a percentage on the dashboard.
That was a good signal; if you’d done it this way, it would have turned out like this. Buy the green one – it’s lower; sell the orange one – it’s higher. The drawdown would have been -18, and the profit would have been locked in ages ago.
This is exactly what i-Equity does : it analyses the quality of signals based on historical data and draws conclusions about the current situation – whether to enter a trade or choose other currency pairs
This is precisely what i-Equity does: it analyses the quality of signals based on historical data and draws conclusions about the current situation – whether to enter a trade or choose other currency pairs
If I’ve understood correctly, is the take-profit set at no more than 21 pips in your system ? Or do you close the position in some other way?
If the take-profit level has been consistent across the historical data, then yes, the equity statistics definitely help here.
That was a good signal; if we’d done it that way, it would have turned out like this. We buy when it’s green – it’s lower; we sell when it’s orange – it’s higher. The drawdown would have been -18, and the profit would have been locked in ages ago.
This is exactly what i-Equity does : it analyses the quality of signals based on historical data and draws conclusions about the current situation – whether to enter a trade or choose other pairs
If I’ve understood correctly, is your system set up with a take-profit of no more than 21 points? Or do you close the position in some other way?
If the take-profit level has been consistent across the trading history, then yes, the equity statistics definitely help here.
For 0.1 lot = $10
I mentioned earlier that you could take more, but in 5 per cent of cases it results in $11 and a reversal. So we take our 10 and walk away. This isn’t the last trade, so there’s no need to hold on to it until the very end – there’ll be others.
Per 0.1 lot = $10
I mentioned earlier that you could take a larger position, but in 5 per cent of cases it results in a profit of $11 followed by a reversal. So we’ll take our $10 and walk away. This isn’t the last trade – there’ll be others, so there’s no need to hold on to this one until the very end.
If I’ve understood you correctly, on average you open two trades of 0.1 lot each, totalling 0.2 lots — that’s roughly $200. The aim is to take a profit of $10. That’s 5 pips at 4 digits on average. In other words, this amounts to a paired pip-trading strategy. And if you were to apply this to trading a single instrument with the aim of taking 5 pips at 4 digits, you would end up with a greater number of trades in the same amount of time. Now all that remains is to work out what proportion of your deposit your two open trades represent.
This is approximately 10 pips, not 5.
That’s about 10 points, not 5.
That’s clear, but you’re entering with two pairs. In other words, each pair gets a +10 dollars, or one gets +10 and the other?
Some are negative, some are positive; sometimes both are positive. There are times when they stay at those levels for a long time, ending up at around -80 and +90
That makes sense. If the strategy was designed around a specific set of currency pairs, adding AUDCHF and EURGBP changes the assumptions the algorithm was built on.
It's not just about having more trades—the new pairs introduce different volatility, correlation, spread costs, and position sizing requirements. Without testing how those factors interact, the results become much harder to predict.
The report seems to confirm that. If the additional pairs increased costs without improving overall performance, it's a good indication they don't add value to the current strategy. I'd focus on optimizing the original pair selection first and only introduce new pairs after thorough backtesting and forward testing.