Update 16th June 2008
Closed profit 940 pips
Open DD 450 pips (3 E/U, 1 U/C)
6/16/08 Update:
Closed profit: ~$974
Open DD: ~$468
6 open - EUR/USD
1 open - USD/CHF
What are you looking at for entry of the hedge ?
when and how are you looking at to decide on entry
Thank you
correlation trading system that assumes we don�t know where price is going.
The answer is in the 1st line.
so you are just entering at any random time,point ? or right after you close your first set for profit, than you are entering again ?
With my hedge trading live buying both the euro/usd and chf/usd
i am generally into profit much faster if the euro/usd moves up
So I look at the Index of the euro,chf,dollar and try and see what direction the euro is going. If the euro goes down i am into draw down for a while until
it goes back up
Buy both pairs at the same time to start the cycle. Follow the rules that I listed. Try this on a demo account before going live. Also, use very small positions in the event a long term trend begins. If you still have any questions just let me know.
Hi Pip_chaser
1st I would like to thank you for sharing this strategy. I’m always amazed by hedging strategy.
I have a question though. How do you handle strong market movement that is against you?
E.g.
Oct 15 1999 until Oct 26 2006 eur/usd downmove = -2692 pips
Mar 11, 2005 until Nov 15 2005 eur/usd down for -1842 pips
I’ve been trying to solve the drawdown of that eur/usd position. I think it would be something like this:
#1
1.3482 11 mar 2005
BEP 1.3482
#2
1.3482 11 mar 2005
1.3282 18 mar 2005
BEP 1.3382
#3
1.3482 11 mar 2005
1.3282 18 mar 2005
1.3182 21 Mar 2005
BEP 1.3315
#4
1.3482 11 mar 2005
1.3282 18 mar 2005
1.3182 21 Mar 2005
1.3115 22 Mar 2005
BEP 1,3265
#5
1.3482 11 mar 2005
1.3282 18 mar 2005
1.3182 21 Mar 2005
1.3115 22 Mar 2005
1.3065 23 mar 2005
BEP 1.3225
#6
1.3482 11 mar 2005
1.3282 18 mar 2005
1.3182 21 Mar 2005
1.3115 22 Mar 2005
1.3065 23 mar 2005
1.3025 24 Mar 2005
BEP 1.3192
… (too lazy to count)
Is my counting correct? If it is correct, than your strategy would take an awful lot of lots. That’s not including the new pair to hedge. Isn’t this dangerous?
Well, maybe I’ve done something wrong here.
Could you give example of how you solve this problem?
Regards,
- Usd/Chf for the period Mar 11, 2005 until Nov 15 2005
+1802 pips. (Eur/Usd -1842)
- Usd/Chf for the period Oct 1998 until Oct 2000
+5570 (Eur/Usd -4176)
So if your analysis showed to place an order at the exact time on
each of these pairs, in 1. Positive pips 1802 minus negative pips
1842 = loss of 40 pips.
- 5570-4176 = a gain of +1394
But this empirocal data cannot be interpreted too much as
the interest rate differential needs also to be calculated, was
there in fact a positive differential as there is now.
The answer to your question is the pips from the positive long
trade are in the bank, which should cover any continued drawdown.
Also take a look at the thumbnail, this is a correlation table for
pairs against Eur/Usd, note that a negative correlation means the two currency pairs correlate in the opposite directions, see Usd/Chf.
So while the Usd interest rate stays low there is a postive carry
between these 2 pairs. Not a great deal, an increase in Euro interest
rates would be nice, but every little helps.
Update 29th June 2008 (3rd week)
Closed profit 1440 pips
Open DD 850 pips (Usd/Chf 4 trades, Eur/Usd 3 trades)
Update 6th July 2008 (4th week)
Closed profit 1790 pips
Open DD 820 pips (1 E/U, 4 U/C)
Update 13th July 2008 (5th week)
Closed profit 2070 pips
Open DD 950 pips (2 E/U, 5 U/C)
:)This is the system that actually got me in Forex. There is a software being used to hedge these 2 pairs. I ran it for about a year. It was a great success in 2006. Had a friend who realized 220%. This year I personally had increases of 100% twice , But unfortunatelly The software promotors idea was to let the system run through drawdowns at all cost until a margin call.
Which I did finnally realized unfortunatelly. There problem was that they did not adjust the posititons size for extended drawdowns. Such which happened with the USD/CHF recentlly. If you take into account any longer term drawdowns by either pair and adjust your lots accordingly you will have alot better success rate.
I am working on something something like this but using the croos pair EUR/CHF to gauge entries and exits. I might reverse the hedge at times of extended drawdowns… using long time frames and technical analysis.
Anyway if you take this live good luck and consider taking profit off the table and reset your hedge to prevent large draw downs… I have noticed a 20% to 25% increase in profit is fairilly common prior to the start of a draw down reversal… Hince watching the cross pair. That doesn’t mean that you can’t have higher increases , but as we all know picking tops and bottoms is diffucult at best.
I personally preferr to be mad that a didn’t make as much verses I lost a bunch… Again profits to you all.
Hi, I am developing an EA, but need Testers to prove that it is profitable - it works with all these correlation and hedge feature. Anybody interested to become my Tester please email me at <[email protected]>
Update 20th July 2008 (6th week)
Closed profit 2775 pips
Open DD 1200 pips (4 E/U, 6 U/C)
Good job daydreamer65!
I hope you will continue to inform us about system results.
Sorry for my english.
Update 27th July 2008 (7th week)
Closed profit 3330 pips
Open DD 1300 pips (5 E/U, 4 U/C)
Good job daydreamer65.
I put this on the shelf because I was concerned about the draw-down, however, your results have inspired me to continuing test.
07.28.08
Long:
1 EUR/USD
1 USD/CHF
hai pip chaser
let say for example you long chf @ 1,1000 n the price goes to 1,1100 then the pair will have 100 pips profit but the other pair ( eur ) is in your condition. i mean you have long @1.5500 , 1.5300 , 1.5200 n the price is still falling, like we say to 1.5000 then do you still adding position in eur ? n what about the chf pair ? since the chf is already hitting its take profit. meaning all your position is in eur n still averaging down. isn’t will blow the equity?
thanks ( i hope you know what i mean )
Yep thought you had PIP CHASER as I have not seen any results
from you of late.
I have changed the system a little though, T/P & buy stop 50 pips,
buy limit 100 pips with a T/P 50 pips.
See thumbnail.
I have been watching this thread.
I have only looked at the idea on the surface - I cannot say that I clearly understand what is going on.
I do know that the pairs you are talking about go in opposite directions.
To trade this phenomenon properly, I would have thought that you take equal amounts of each to trade. In that I agree with Rhodytrader.
What I see is an apparent contradiction.
Daydreamer65 is making money out of this system but Rhodytrader is warning against it because of drawdowns that could hit your margin.
Interesting to note, Daydreamer65’s drawdown is also increasing despite his profits!! :eek: :eek:
How do you get out of this?
What am I to think?? 
Is this a good strategy or, [U]danger[/U], I should stay out!
I would like Rhodytrader to post again if he will!