+/- 300 pips? Why such a big range? I base my range upon ADR, it works fine.
What period is your ADR?
EU is 94 pips, GU is 111 pips.
No, I didnāt mean what is the value of the ADR, I meant, what is the averaging period. Over how many days is your ADR being calculated?
The markets move in waves/phases. They will have big movement days and then several days of consolidation. The overall value is averaged out to give the ADR (and this applies to an ATR equally). As a result, the daily move will regularly be considerably more than the ADR. If your period is too short, your stop will be too tight.
Using a stop that is, say, 2x the ADR gives you the ability to cope with these larger movements, based upon the current volatility.
[QUOTE=Jedster;356450]No, I didnāt mean what is the value of the ADR, I meant, what is the averaging period. Over how many days is your ADR being calculated?
The markets move in waves/phases. They will have big movement days and then several days of consolidation. The overall value is averaged out to give the ADR (and this applies to an ATR equally). As a result, the daily move will regularly be considerably more than the ADR. If your period is too short, your stop will be too tight.
Using a stop that is, say, 2x the ADR gives you the ability to cope with these larger movements, based upon the current volatility.[/QUOTE]
Hi, I have no idea how it is calculated, I have an indicator that does that. here it is.
That sounds a little dangerous to me. You are making trading decisions based upon something you donāt understand. I would suggest that if you have no idea how it is calculated, that you go and do a little research - what it is, how it is calculated and the difference between the ADR and ATR. You can then make informed trading decisionsā¦
No worries, Iām still demoing. I wonāt go live until Iām absolutely positive about every aspect of the system. 
Jedster, howās it going? I have been trading BB method on EG pretty successful, the only thing I donāt like is moving my TP manually do you know of any way to automate this where it would move every hour when the BB moves and buy in when it crosses one of them and sell automatically when it reverses or buys more if it continues to cross over more BB? Anyone else that can help would be appreciated, just directed it at Jedster because of the similar style we are tradingā¦Thanks
Jedster should like this, but I wanted to share with everybody some significance to trading EG, even when using Vitrite method to see trade opportunitiesā¦
The EG has lower margin cost than EU\GU pairs, but higher pip dollarsā¦let me explain:
take 1.0 lots to trade a scenerio, and this example we will use 1:200 leverageā¦
to trade EU\GU, each pair gets 0.5 lots, which equals total of $700 of margin usedā¦with a 20 pip TP, you get about $100 profitā¦now compare same trade using EGā¦
to trade EG using same lot size, will be 1.0 lot, but margin used is only $400ā¦hit a 12.5 TP, which is what it will be for same close time as EU\GU pairs, using pricing difference, the actual profit will be $200, double the dollars!
the only thing is the SL will either need to be shorter for same dollar loss, or greater for same pip SL, which would be greater dollar loss if hitā¦the EG moves less pips than EU\GU for same given amount of time, but one EG pip at 1.0 lot is $16, while either EU or GU pip is $10 per pipā¦so if your like Timehopper and like lower lots with no SL, trading EG will give you more headroom with more available free margin, while also giving more profit in dollars!
I personally prefer to trade this manually. I prefer to use my own judgement based around price action and trends to determine when exactly to enter. However, it would be pretty easy to write a little script to adjust stops every hour. It might be better to just apply a trailing stop based upon the gap between each band. Lets say there was about 20 pips between each of the bands, you simply set the trailing stop to 20 pips. Then each time price crossed through a band, the stop would move.
As for taking new positions, again it would be a pretty simple BB trading EA. Perhaps if you search the various forex forums you will find one already done.
Yes, I prefer the cheaper trade and finance costs for holding just one position - not that my position sizes are big or anything.
Not sure about the profit point though. Margin requirements wonāt influence your profit and the leverage and lot size are the same, so 10 pips profit through a direct trade, or synthetic trade should be equal. The only actual difference should be the spread cost - the direct trade has only one spread and the synthetic has two sets of spreads to pay for.
OK Thanks, are you in short right now since it is 2 SD above the mean? I bought in twice as it crossed over one then two, have only been taking one SD for profit since it hasnāt really been moving much past that. I will sell out one lot as it crosses back thru one SD then sell the other at mean, hopefully both with profit we will see, of course I am down right now, but that is the beauty of trading one pair I can handle a bigger draw down, but so far hasnāt been to bad.
Just checking; this large divergence was measured on the 1 minute time frame?
Thanks Medisoft
Yes, short at 0.80675
EG trend is down, so I think this is a good entry. Not sure where I will target profits yet but probably at least +2SD
Well, thatās just an example hehehe, I instead of that use the daily standard deviation for the last 52 weeks as a measure to add to the current price, but it was to complicated for me to put in this example.
I differ here. It is not the same profit in dollars to win 10 pips on EU/GU than 10 pips on EG, because on EU/GU the pip value is 10 dollars per full lot, while on EG it is greater, because you are not using USD as a common currency, but GBP.
yes, on the 1 minute time frame. Iām trading all in 1 minute
Still not sure I get this, can you give an example?
Actually, I worked up my own quick example:
Lets say EG, EU and GU all have the same lot size and pip value - well they do with my broker. So:
1 lot = $100,000
1 pip = 0.0001
1 pip value = 100,000 * 0.0001 = $10
so for every 1 pip move in price, your position goes up or down by $10
Lets say EU and GU diverge by 10 pips. There are a number of ways to show an example but in the most basic form:
For the synthetic:
buy 1 lot EU
sell 1 lot GU
EU goes up by 5 pips
GU goes down by 5 pips.
EU makes $50, GU makes $50 = total $100
Lets say each pair has a 1 pip spread. Spread cost = 2 * $10
Net profit = $80
For the direct trade in the same circumstances:
buy 1 lot EG
EG goes up by 10 pips
EG makes $100
Spread cost = 1 * $10
Net profit = $90.
On your example I would be trading 2.0 lots of EG because it is same total lot size as both other pairs together, and it takes even less margin at 1:200, $800, instead of $1400, and at the end of your example trade, upon hitting 10 pip TP, the gross profit is $308 vs $100 of EU/GU pairs, grossā¦My account is in USD, Iāll bet yoursā is GPB, so since GU is trading around $1.54-1.55, that is why there is a difference in pip value for me and others with USD accountsā¦is EU pair 10 pounds per pip?