What exactly about the arbitrage is not clear for you? Ask precise question please
Yes, Epidot, exactly. Thank you. You are right. The stop loss should be important.
Yes, Ontario. As discussed, the arbitrage is the key point. But if you sign in to different accounts, how will you manage them?
Try to optimize your strategy just a little bit. From the chart you placed it is clearly showed that your chances are below the half. Also it will make sense to the higher time-frames. What you currently have is good for a demo account but not if you want to make money.
“Close going above SMA(20) go long, Close going below SMA(20) go short.”
Ok… two things. With such a simple rule what makes you think you can profit when 99% of other people cannot?
Also when price crosses above the MA you now have a long signal. But you have already missed the move. By the time price is crossing above the MA (Laggin Indicator) the institutions are selling retail for profits. They will be selling against buyers (you). This is the mistake retail traders make and why the market sentiment is always the opposite of the banks. Trade with the banks not against them. Enter when they enter… Buy at wholesale and sell at retail. You cannot do this with moving averages.
Thank you, Eroedon.
Actually we are optimizing our strategies. But the results seem we are wasting time…
Thank you, Epidot.
Actually sometimes, this strategy worked. we use M1 period. is that too small to make the strategy not work?
Arbitrage in the sense of risk-free strategies used with forex brokers are most likely prohibited, but some brokers allow them. For example swap arbitrage. You need two brokers which have good swap conditions on high yielding currencies like ZAR, RUB. Placing two opposite trades with them you get zero exposure and earn swaps everyday. Also this strategy can be risky if you have insufficient capital for that
I think what you would find with a strategy like this is you will sometimes make profits then lose them during ranges. MA’s should whipsaw you around in ranges causing you to give back all the profits you have. In my opinion the 1 min TF cannot be traded with success. And especially not on Spot Forex. Futures perhaps.
Thank you, Ontaria.
I heard of that. But I think in one broker the arbitrage opportunity is zero.
So traders need to choose more than 2 brokers. If we buy via one broker and sell via the other one without hedging trades in the same broker, how can they check if there is arbitrage trading?
Thank you, Epidot.
But I think HFT need to be M1. If we don’t use M1 TF, how to trade in HFT mode?
You considered right point, they can’t spot that at all. But they can suspect you in this. The problem can lie in non-trading risks, for example blocked deposit, blocked profit, account termination because of violation of some broker rules. I used that strategy it works, but earning 400-500 USD monthly on swap arbitrage you have to have at least 10K on both accounts to open big position. Also swap free brokers (where you open short position on high yielding currency) are carefully monitoring trades which are potentially related to swap arbitrage.
Thank you for your reply, Ontario.
But I don’t understand, why non-trading can lead to some excuse to block the deposit.
The reason is not so strong, right? If I were the trader, I would say I had no time to trade…
Did you experience that before?
Well I’ve never experienced that, but offshore bucket-shops are good candidates for nasty surprises -they can cancel profit, terminate account etc. You will probably get back your original deposit, but wasted time is also resource that has a value. That’s why we have to choose only reputable, FCA regulated brokers like IB, Tickmill, Hotforex
Because intra-day price action tends to be unpredictable and spreads exist.
Thank you, Ontario.
But cancelling profit without reason is impossible, right? Just because of not trading ?
Why did off-shore dare to do that? They don’t worry about client leaving?
Thank you, AUdvantages.
Totally agree with you.
Of course they have to state which provision of their ToS you violated. But the problem is some brokers update their rules and cite vague reasons during account termination or basically scamming you. Client protection in offshore brokers is very low.
Thank you, Ontario.
Is there any famous broker who started up offshore as well?
This has a chance of working when markets are trending and you ride the trend as far as it goes but when they are not, you will get chopped to pieces. The problem is knowing when the price is about to trend and when it is not.
Personally, I dislike technical studies because they lag and smooth out the price. You inevitably get in late which increases the risk. Then you leave a lot of money on the table on the exit because the price has already turned but the indicator has yet to indicate to you to get out.
However, this is an opportunity to learn. Try the opposite on your demo.
Sell when the price closes above the SMA. Buy when the price closes below the SMA.
Profit target at least twice your stop loss and both feasible, SL should reduce the probability of getting stopped out but not too wide. TP should maximize your potential to profit yet, realistically get triggered.
You can also experiment with trailing the stop to minimize losses and letting the profitable trades run. Even adding to them when you catch a trend.
You may also want to experiment with higher time frames as a filter. Check this thread : The 3 Duck's Trading System
Come back and update us on your findings and results after you have made at least 20 trades over a series of days. The more trades the better. The more trading days the better…
Why not just flip a coin? Heads go long, tails go short. Risk to rewards at least 1:2 and / or add to the winners as price makes new highs or lows and adjust your SL along the way. I think this is just as good, maybe better…