Monday, 16 June 2008
discussion on carrygrid and pointbreak
Here i had an interesting discussion with another trader, which i thought was worth sharing.
[15:44:25] Michael says: I'm a forex trader and introducing broker
[15:45:20] Michael says: I have a few questions about carry grid
[15:46:46] Michael says: I understand that the system buys on daily, but what happens when the market sell off for severals day?
[15:47:04] Paul says: it waits until the buying returns
[15:47:36] Paul says: the whole thing is really predicated on a long term rising market
[15:47:45] Paul says: or an even market
[15:48:16] Paul says: then it will make a fortune. but if the market is going to become truly bearish, its not the right system.
[15:48:38] Paul says: basically its fortunes lie with those of all the carry traders
[15:49:06] Paul says: so GBPJPY i wouldnt go near, right now, but quite a few traders are using is on AUDJPY, EURJPY
[15:49:43] Paul says: personally, being completely honest, i prefer a bi-directional system. which is why im using pointbreak mainly at the moment, as its less stressful to watch.
[15:50:23] Michael says: I went back and notice we were in a overall up trend since 2000,looking at the monthly but from 1998-2000 we were in a major down trend I realize that was a long time ago buy in a case like that would it blow out your account
[15:51:01] Paul says: yes. this is a problem. there are trailing stops in the system but they reduce the profitability.
[15:51:23] Paul says: its risk/reward. If you rode that 6 year rise with the carry grid 10k would be millions.
[15:51:37] Paul says: but its nota system for the faint hearted
[15:51:43] Michael says: I followed point break the overall drawdowns I did not like...
[15:51:54] Paul says: ok
[15:52:04] Paul says: have you looked at shark ?
[15:52:11] Michael says: can u tell me more
[15:52:34] Michael says: yes I traded the shark great system poor tech support
[15:52:37] Paul says: you would have to check out their site, theres a link on the myfxtools site in the reviews section
[15:52:39] Paul says: ok
[15:52:47] Paul says: you know more than me then about that one
[15:54:02] Michael says: the system started looping trades and a friend of mines never got a reply from the seller/developer
[15:54:54] Paul says: ok
[15:55:15] Paul says: what kind of rewards are you looking for
[15:55:23] Paul says: you can run pointbreak on a lower risk level
[15:56:00] Michael says: just want a system that is consistant that will not blow out ones account
[15:56:17] Michael says: u think point break is the best
[15:56:23] Paul says: i honestly do
[15:56:32] Paul says: i can send you the reports from the live accounts i have running on my server
[15:56:45] Michael says: please do
[15:56:57] Michael says: deltatrading@cox.net
[15:57:01] Paul says: one is on quite conservative and pretty small drawdowns over the last 6 months even during bad periods for the system
[15:57:03] Paul says: ok
[15:57:40] Paul says: will do that later
[15:58:23] Michael says: when I ran the EA it did produce nice profits but the equity stayed below the balance for more than two months
[16:01:19] Paul says: ok yes ive seen the same thing
[16:02:07] Michael says: what should I expect from it?
[16:02:17] Paul says: the oldest account was run on 1 for 4 months, then went to 3
[16:02:23] Paul says: it started on 3k
[16:03:06] Paul says: its now at 3,600 or something. so thats 20% over 6 months at low risk. not bad really.
[16:03:33] Paul says: i have an account im running on risk 4, which is a small account
[16:04:05] Paul says: and what i plan to do is add more money if drawdown is high, and then when it hits 20k take half out, and continue running it at high risk.
[16:04:35] Paul says: so the total you can lose is never that high, the rewards are good, and you can always add more funds as its not a large account.
[16:05:06] Paul says: if i had a 50k account and had to pump in another 25-50k to save margin call i would not be happy
[16:05:16] Paul says: ive been in situations like that before
[16:05:42] Paul says: i used to trade a 100k account, and that amount frightens me these days.
[16:08:16] Michael says: ok..I'm watching some trades in the pound yen up 140 pips 190 pips and 108 pips now which is good but like you said when it turns it will not be good
[16:09:07] Paul says: yes, if you can trade with it, its a great tool, and thats how i used it
[16:09:31] Paul says: to be used at its best its not a complete autopilot system
[16:09:56] Paul says: if you already trade its a tool you might like to have in your arsenal. this is how i look at it, a tool for a particular job.
[16:10:09] Michael says: you just don't know when it can turn around and thats the scary part
[16:10:31] Paul says: true...
[16:11:13] Michael says: I appreciate your honesty
[16:11:21] Michael says: thanks a million
[16:11:29] Paul says: i had experimetned with variations that would close out on a daily trend change, but of course overall profitability was much reduced. perhaps a lower-risk version would be worth considering
[16:11:37] Paul says: no problem, always.
[16:11:46] Paul says: good luck with your trading.
[16:14:52] Michael says: thanks again
[15:44:25] Michael says: I'm a forex trader and introducing broker
[15:45:20] Michael says: I have a few questions about carry grid
[15:46:46] Michael says: I understand that the system buys on daily, but what happens when the market sell off for severals day?
[15:47:04] Paul says: it waits until the buying returns
[15:47:36] Paul says: the whole thing is really predicated on a long term rising market
[15:47:45] Paul says: or an even market
[15:48:16] Paul says: then it will make a fortune. but if the market is going to become truly bearish, its not the right system.
[15:48:38] Paul says: basically its fortunes lie with those of all the carry traders
[15:49:06] Paul says: so GBPJPY i wouldnt go near, right now, but quite a few traders are using is on AUDJPY, EURJPY
[15:49:43] Paul says: personally, being completely honest, i prefer a bi-directional system. which is why im using pointbreak mainly at the moment, as its less stressful to watch.
[15:50:23] Michael says: I went back and notice we were in a overall up trend since 2000,looking at the monthly but from 1998-2000 we were in a major down trend I realize that was a long time ago buy in a case like that would it blow out your account
[15:51:01] Paul says: yes. this is a problem. there are trailing stops in the system but they reduce the profitability.
[15:51:23] Paul says: its risk/reward. If you rode that 6 year rise with the carry grid 10k would be millions.
[15:51:37] Paul says: but its nota system for the faint hearted
[15:51:43] Michael says: I followed point break the overall drawdowns I did not like...
[15:51:54] Paul says: ok
[15:52:04] Paul says: have you looked at shark ?
[15:52:11] Michael says: can u tell me more
[15:52:34] Michael says: yes I traded the shark great system poor tech support
[15:52:37] Paul says: you would have to check out their site, theres a link on the myfxtools site in the reviews section
[15:52:39] Paul says: ok
[15:52:47] Paul says: you know more than me then about that one
[15:54:02] Michael says: the system started looping trades and a friend of mines never got a reply from the seller/developer
[15:54:54] Paul says: ok
[15:55:15] Paul says: what kind of rewards are you looking for
[15:55:23] Paul says: you can run pointbreak on a lower risk level
[15:56:00] Michael says: just want a system that is consistant that will not blow out ones account
[15:56:17] Michael says: u think point break is the best
[15:56:23] Paul says: i honestly do
[15:56:32] Paul says: i can send you the reports from the live accounts i have running on my server
[15:56:45] Michael says: please do
[15:56:57] Michael says: deltatrading@cox.net
[15:57:01] Paul says: one is on quite conservative and pretty small drawdowns over the last 6 months even during bad periods for the system
[15:57:03] Paul says: ok
[15:57:40] Paul says: will do that later
[15:58:23] Michael says: when I ran the EA it did produce nice profits but the equity stayed below the balance for more than two months
[16:01:19] Paul says: ok yes ive seen the same thing
[16:02:07] Michael says: what should I expect from it?
[16:02:17] Paul says: the oldest account was run on 1 for 4 months, then went to 3
[16:02:23] Paul says: it started on 3k
[16:03:06] Paul says: its now at 3,600 or something. so thats 20% over 6 months at low risk. not bad really.
[16:03:33] Paul says: i have an account im running on risk 4, which is a small account
[16:04:05] Paul says: and what i plan to do is add more money if drawdown is high, and then when it hits 20k take half out, and continue running it at high risk.
[16:04:35] Paul says: so the total you can lose is never that high, the rewards are good, and you can always add more funds as its not a large account.
[16:05:06] Paul says: if i had a 50k account and had to pump in another 25-50k to save margin call i would not be happy
[16:05:16] Paul says: ive been in situations like that before
[16:05:42] Paul says: i used to trade a 100k account, and that amount frightens me these days.
[16:08:16] Michael says: ok..I'm watching some trades in the pound yen up 140 pips 190 pips and 108 pips now which is good but like you said when it turns it will not be good
[16:09:07] Paul says: yes, if you can trade with it, its a great tool, and thats how i used it
[16:09:31] Paul says: to be used at its best its not a complete autopilot system
[16:09:56] Paul says: if you already trade its a tool you might like to have in your arsenal. this is how i look at it, a tool for a particular job.
[16:10:09] Michael says: you just don't know when it can turn around and thats the scary part
[16:10:31] Paul says: true...
[16:11:13] Michael says: I appreciate your honesty
[16:11:21] Michael says: thanks a million
[16:11:29] Paul says: i had experimetned with variations that would close out on a daily trend change, but of course overall profitability was much reduced. perhaps a lower-risk version would be worth considering
[16:11:37] Paul says: no problem, always.
[16:11:46] Paul says: good luck with your trading.
[16:14:52] Michael says: thanks again
Labels: CarryGrid EA, drawdown, Expert advisor, forex, PointBreak EA, shark
Tuesday, 11 December 2007
drawdown and unwinding
Question
I see you CarryGrid is doing well so far, I learn about grid trading since last month, as far as I know one side grid like you have (buy only on GBPJPY) has drawbacks, it is when strong trend against our trade (unwinding moment), so have you any protective logic embedded in the EA ? how about is GBPJPY drop to 200-300 pips like 2 month ago…?
Answer
For the next version of carrygrid we plan to add an element of hedging so we move to the short side if we see unwinding happening.
The largest drawdown over the last 9 years ever would have been during this summer.
Labels: Carry Grid EA, drawdown, unwinding
Tuesday, 6 November 2007
Drawdown question and Version 6
Q. The ea seems to work well,
but i am a bit concerned about the drawdowns in
backtesting. If the ea is supposed to recognise a
trend change and close open trades, why do we still
get a drawdown.
A. The version i am working on RIGHT NOW dramatically reduces drawdown by dynamically changing the grid mesh based on market volatility, and produces similiar results (10k -> 1 million in 5-6 years). Get on the newsletter to keep updated.
but i am a bit concerned about the drawdowns in
backtesting. If the ea is supposed to recognise a
trend change and close open trades, why do we still
get a drawdown.
A. The version i am working on RIGHT NOW dramatically reduces drawdown by dynamically changing the grid mesh based on market volatility, and produces similiar results (10k -> 1 million in 5-6 years). Get on the newsletter to keep updated.
Labels: CarryGrid EA, drawdown, version 6
Thursday, 26 July 2007
Something really kicked the yen into gear
Something really kicked the yen into gear in the last couple of hours. I am still trying to track down the news event that occurred. This is a good time to look at drawdowns incurred by the system, the statemnet has just been updated, and gbpjpy has fallen 600 pips in the last 4 days. this is a really typical pattern of this pair, to see 600 pips in a few days. it falls, hard and fast when it does. The account equity is at 85k, with a 96k balance. thanks to some diversification the usdchf trades are providing some positive equity injection (hedge baskets are good), none of the yen pairs are trading right now, and gbpjpy is creating most of the losses. which is good. if any pair is going to carry losses, it has to be that pair. So we have a 600 pip drawdown, creating a 10% drawdown. Thats pretty good money management in my book. Interesting to see how this one pans out, ive been hoping for a cycle like this so we could see the effect of the drawdown.
Labels: drawdown
Wednesday, 25 July 2007
Weak US Data creating volatility
This morning i was quite shocked to wake up and find myself at the bottom of a 200 pip overnight drop, as the DOW retreated on more weak US data. Through the early asian session we then saw the yen fall on concerns over US data, and illustrated nicely the typical asymmetry between the european/us and asian sessions.
So where does this leave us now? At the time of writing, the equity is at 90k, with most of the drawdown coming from GBPJPY, so we are at a 6% drawdown currently.
None of the recent data really changes any of the fundamentals, and i expect this ripple to provide more buy in opportunities, and the account to go back over 100k by the end of next week. This whole patience thing does take practise.
So where does this leave us now? At the time of writing, the equity is at 90k, with most of the drawdown coming from GBPJPY, so we are at a 6% drawdown currently.
None of the recent data really changes any of the fundamentals, and i expect this ripple to provide more buy in opportunities, and the account to go back over 100k by the end of next week. This whole patience thing does take practise.
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