Shashank Rai
2023.08.14 15:54
(modified 2023.08.31 06:34) #
This signal provider uses the correlation between EURUSD and USDCHF to provide stable returns for clients. In essence, the strategy buys EURUSD and sells USDCHF at the same time. The typical correlation between EURUSD and USDCHF is around negative 0.80. The principle that the system works on is short-term correlation divergences between the two pairs to build positions in the hope of correlation returning back to normal. As you can imagine, when the correlation stays outside of normal ranges for an extended period of time, the strategy will need to keep adding positions in larger and larger sizes to make up for the drawdowns. In case a black swan event occurs and the correlation breaks, it is very likely that the account will be completely blown up. Therefore, keep withdrawing from the account on a periodic basis and keep adjusting the lot-size parameters, if you can.
There are risks associated with this approach. During periods of elevated volatility, drawdowns can be extreme - up to 30%! A general guideline I have used is to assume that the drawdown for 0.01 lots will be around $7 - $10. So if you are trying to scale up the strategy to a larger account, use those risk parameters. DO NOT SIMPLY USE THE LOT MULTIPLIER FEATURE IN A TRADE COPIER AND ASSUME THAT YOUR RISK WILL BE MANAGED WELL. If you do this, the short-term drawdowns will completely destroy your account.
In my experience so far, the number of simultaneous positions may be 2 - 6. Therefore, for every 0.01 lot correlation trade, with scale-ins and adjustments, your notional exposure could be between $20 -$100 on average. So investors have to be extremely careful applying this strategy to their personal accounts with small capital. Also, trades may be held overnight and through rollover periods, which could expose investors to gap risks and swap fees. I am currently using the general guideline of having $400 as the lowest account size for copying the signal and trading the lot size with a 1:1 ratio. This means that for 0.01 lots traded in EURUSD and USDCHF correlation trade, in order to be well capitalized, you need ~$400 in the account. Average returns on a 4-5 day basis for every $400 dollars invested is about 3 - 5%. This means that you will earn about $12 - $20 on a weekly basis. As an example, if you are trading a $100K funded prop account, the maximum you should multiply the lot size by a factor of 10 because most funded prop firms have a daily drawdown limit of 5%. If you go any higher, you will likely blow up your account.
In essence, this is a hedging strategy. When hedging based on correlation, volatility is your worst enemy. So please be careful in applying this strategy. You will likely experience extreme drawdowns during major news events, like NFP, CPI, Fed Meetings, etc. As long as you don't get greedy, don't use a crazy lot multiplier like 50 or 100, don't overleverage your account, and don't let the initial balance drop below $400 for the position size that the signal provider is trading, you will enjoy stable returns over the long run.
Update at the end of Signal Service 8/30/2023:
After finishing signal service for one month, because of the irresponsible management by the signal provider, I lost one $200 account. Also, paying for the signal plus ($30) and VPS ($15) incurred an overall $245 cost to subscribe to the signal. The small account was blown because of the the fact that signal provider's strategy had its worst drawdown last month, just as I was subscribing. There were no stop losses and take profits either, so I was noticeably shaken after a seemingly "safe" strategy had such a $100 - $200 drawdown in my account, very frequently. I continued with the signal by funding a slightly bigger account in hopes of recovering some of my costs. On this bigger account, I made ~$30 from the signal provider. So I am at a net loss. Additionally, the provider is using a broker that uses a suffix Eg. EURUSD.p, USDCHF.p. It's not very easy to copy these trades over on MQL because of the suffix. I had to use a demo account the same size as the provider to copy the signal and then copy it over to the main account. This added an additional $20 to my overall cost because I used Social Trader Tools for the copying. Otherwise, MQL will proportionately increase the lot size on your account based on equity and you will definitely blow up your account.
The provider keeps changing the profit target for this strategy. When I first subscribed, the provider had $1 as the profit target. Recently, the provider has changed the profit target to $2 without notifying any of the subscribers. This is especially bad because your holding times are longer and you have to martingale into more positions to make the strategy work. Consequently, your drawdown and risk are also much larger. Typically, you quadruple your risk if you double your profit target based on this strategy. I am not comfortable with that at all because I know that sooner or later, even my slightly bigger account will be blown. Based on another algorithm that analyzes this strategy, the most optimal profit target is $0.66. However, having a profit target that low, for most subscribers, you will barely break even after spread, commissions, and swaps. Swap fees are high because the provider will have to keep holding positions through the rollover periods if he is caught in a position where the correlation has not been corrected.
无法复制
hi why your position are not have stop los and take profit my position was open for 2 days
Ze Zhen Xie (EURSpecial) is doing a great job, thank you very much. I made 5% profit in my first month. Please keep it up.
Very good signal provider.
Symbols don't match.
This signal provider uses the correlation between EURUSD and USDCHF to provide stable returns for clients. In essence, the strategy buys EURUSD and sells USDCHF at the same time. The typical correlation between EURUSD and USDCHF is around negative 0.80. The principle that the system works on is short-term correlation divergences between the two pairs to build positions in the hope of correlation returning back to normal. As you can imagine, when the correlation stays outside of normal ranges for an extended period of time, the strategy will need to keep adding positions in larger and larger sizes to make up for the drawdowns. In case a black swan event occurs and the correlation breaks, it is very likely that the account will be completely blown up. Therefore, keep withdrawing from the account on a periodic basis and keep adjusting the lot-size parameters, if you can.
There are risks associated with this approach. During periods of elevated volatility, drawdowns can be extreme - up to 30%! A general guideline I have used is to assume that the drawdown for 0.01 lots will be around $7 - $10. So if you are trying to scale up the strategy to a larger account, use those risk parameters. DO NOT SIMPLY USE THE LOT MULTIPLIER FEATURE IN A TRADE COPIER AND ASSUME THAT YOUR RISK WILL BE MANAGED WELL. If you do this, the short-term drawdowns will completely destroy your account.
In my experience so far, the number of simultaneous positions may be 2 - 6. Therefore, for every 0.01 lot correlation trade, with scale-ins and adjustments, your notional exposure could be between $20 -$100 on average. So investors have to be extremely careful applying this strategy to their personal accounts with small capital. Also, trades may be held overnight and through rollover periods, which could expose investors to gap risks and swap fees. I am currently using the general guideline of having $400 as the lowest account size for copying the signal and trading the lot size with a 1:1 ratio. This means that for 0.01 lots traded in EURUSD and USDCHF correlation trade, in order to be well capitalized, you need ~$400 in the account. Average returns on a 4-5 day basis for every $400 dollars invested is about 3 - 5%. This means that you will earn about $12 - $20 on a weekly basis. As an example, if you are trading a $100K funded prop account, the maximum you should multiply the lot size by a factor of 10 because most funded prop firms have a daily drawdown limit of 5%. If you go any higher, you will likely blow up your account.
In essence, this is a hedging strategy. When hedging based on correlation, volatility is your worst enemy. So please be careful in applying this strategy. You will likely experience extreme drawdowns during major news events, like NFP, CPI, Fed Meetings, etc. As long as you don't get greedy, don't use a crazy lot multiplier like 50 or 100, don't overleverage your account, and don't let the initial balance drop below $400 for the position size that the signal provider is trading, you will enjoy stable returns over the long run.
Update at the end of Signal Service 8/30/2023:
After finishing signal service for one month, because of the irresponsible management by the signal provider, I lost one $200 account. Also, paying for the signal plus ($30) and VPS ($15) incurred an overall $245 cost to subscribe to the signal. The small account was blown because of the the fact that signal provider's strategy had its worst drawdown last month, just as I was subscribing. There were no stop losses and take profits either, so I was noticeably shaken after a seemingly "safe" strategy had such a $100 - $200 drawdown in my account, very frequently. I continued with the signal by funding a slightly bigger account in hopes of recovering some of my costs. On this bigger account, I made ~$30 from the signal provider. So I am at a net loss. Additionally, the provider is using a broker that uses a suffix Eg. EURUSD.p, USDCHF.p. It's not very easy to copy these trades over on MQL because of the suffix. I had to use a demo account the same size as the provider to copy the signal and then copy it over to the main account. This added an additional $20 to my overall cost because I used Social Trader Tools for the copying. Otherwise, MQL will proportionately increase the lot size on your account based on equity and you will definitely blow up your account.
The provider keeps changing the profit target for this strategy. When I first subscribed, the provider had $1 as the profit target. Recently, the provider has changed the profit target to $2 without notifying any of the subscribers. This is especially bad because your holding times are longer and you have to martingale into more positions to make the strategy work. Consequently, your drawdown and risk are also much larger. Typically, you quadruple your risk if you double your profit target based on this strategy. I am not comfortable with that at all because I know that sooner or later, even my slightly bigger account will be blown. Based on another algorithm that analyzes this strategy, the most optimal profit target is $0.66. However, having a profit target that low, for most subscribers, you will barely break even after spread, commissions, and swaps. Swap fees are high because the provider will have to keep holding positions through the rollover periods if he is caught in a position where the correlation has not been corrected.