Pair trading and multicurrency arbitrage. The showdown. - page 305

 
Sergey2134 #:
And when the two yellow lines cross on the chart – what does that mean for a trader?

What I can’t understand is the two yellow lines. There are no yellow lines on the indicator.

 
Vitaly Muzichenko #:

What I can’t understand is the two yellow lines. There are no yellow lines on the indicator.

I got the colours a bit wrong ) On the histogram, they’re a light green line and an orange line. Does their intersection mean anything as a signal?
 
Sergey2134 #:
I got the colour a bit wrong ) On the histogram, these are the light green line and the orange line. Does their intersection signify anything as a signal?
No, it doesn’t. But just to mention: I’ve never looked at crossovers; I’ve always based my system on breaks.
 

I’m currently analysing the risks of the system. It’s clear that I need to set aside enough funds to cover two averaging trades.

Vitaly, with this approach, what percentage return on your deposit do you achieve per month?

 
Sergey2134 #:

I’m currently analysing the risks of the system. It’s clear that I need to set aside enough funds to cover two averaging trades.

Vitaly, with this approach, what percentage return on your deposit do you achieve per month?

The profit percentage, calculated as the profit relative to the deposit, for stop-loss/take-profit. On average across the board – these are all amateurish concepts.

With a deposit of $100, the profit percentage can be high.

With a deposit of $10,000, the percentage is small, because the risks are completely different, and a sensible person with a large deposit won’t risk it in the same way as they would with a deposit of $100–200.

The same applies to the stop-loss/take-profit ratio for a position: how can you set a stop-loss or take-profit level for closing a position if, for example, the percentage is set at 2 per cent? With a large deposit, this could take up to a week, and if the market is flat, it could take a month.

 
Vitaly Muzichenko #:

If, for example, the margin requirement is set at 2 per cent. With a large deposit, this could last a week, or a month if the market is flat.

It also depends on the timeframe on which we analyse the spread.
 
Sergey2134 #:
It also depends on the timeframe on which we’re analysing the spread.

I initially tried timeframes ranging from M5 to H4, but the results weren’t impressive, particularly above M30.

On the M15 and below, there are a lot of false entries.

I only use the M30

 

Right. Thanks! It’s actually a very stable system. Yes, we’re trailing based on equity.

But there are parameters involved in this strategy. At what percentage increase in the deposit should we start trading? And when should we close positions if there’s a drawdown of a certain percentage?

In your opinion, which of these parameters are more appropriate?

 
Sergey2134 should we close positions if there’s a pullback of a certain percentage?

In your opinion, which of these parameters are more appropriate?

I used a money-based trailing stop with a fixed amount, but that was just a trial run and I’ve left the tests for ‘later’
 
Sergey2134 should we close positions if there’s a pullback of a certain percentage?

In your opinion, which of these parameters are more appropriate?

I mean, when it comes to scalping?

I can’t imagine doing that with currency pairs