No I haven't tried it just yet, my IG account is currently empty because I transfered all my cash to Gekko for their bonus... When DIT provides a bit of profit I will be able to move some cash back to IG to test this
The Daily Index Trader
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No I haven't tried it just yet, my IG account is currently empty because I transfered all my cash to Gekko for their bonus... When DIT provides a bit of profit I will be able to move some cash back to IG to test this
That's great news!:clap:
Ok here is my idea to reduce risk...
The idea is we don't really need to hedge!
Below are two example trades which DIT would instruct us to open
BUY DAX @ 6000 with TP-6060 SL-5070
SELL CAC @ 3000 with TP-2040 SL-3030
Now the idea is to not open these, and instead action whatever occurs first from the following manually:
if CAC hits 3030 (stoploss) then BUY DAX with TP of 6060 & SL 5070 (assuming DAX is around 6030)
if DAX hits 5070 (stop loss) then SELL CAC with TP of 2040 & SL 3030 (assuming CAC is around 2070)
Obviously this requires more manual intervention but with some additional ideas thrown in we could make this easier to implement.
One way to make this easier that I have thought about is IG Index offer alerts, we could setup 2 alerts. When CAC hits 3030 send alert or when DAX hits 5070 send alert then we enter opposite trade with whatever alert comes first.
The second idea could be to use "order to open" by creating two pending orders.
1. Create pending order to BUY DAX @ 6030 with TP 6060, SL 5070
2. Create pending order to SELL CAC @ 2070 with TP 2040 and SL 3030
3. Whatever order is executed (opened) first then cancel the second order.
This way we are only ever entering one trade and the risk reward is the same or 1:1 therefore 50% less than DIT rules.
What do you think?
The idea is we don't really need to hedge!
Below are two example trades which DIT would instruct us to open
BUY DAX @ 6000 with TP-6060 SL-5070
SELL CAC @ 3000 with TP-2040 SL-3030
Now the idea is to not open these, and instead action whatever occurs first from the following manually:
if CAC hits 3030 (stoploss) then BUY DAX with TP of 6060 & SL 5070 (assuming DAX is around 6030)
if DAX hits 5070 (stop loss) then SELL CAC with TP of 2040 & SL 3030 (assuming CAC is around 2070)
Obviously this requires more manual intervention but with some additional ideas thrown in we could make this easier to implement.
One way to make this easier that I have thought about is IG Index offer alerts, we could setup 2 alerts. When CAC hits 3030 send alert or when DAX hits 5070 send alert then we enter opposite trade with whatever alert comes first.
The second idea could be to use "order to open" by creating two pending orders.
1. Create pending order to BUY DAX @ 6030 with TP 6060, SL 5070
2. Create pending order to SELL CAC @ 2070 with TP 2040 and SL 3030
3. Whatever order is executed (opened) first then cancel the second order.
This way we are only ever entering one trade and the risk reward is the same or 1:1 therefore 50% less than DIT rules.
What do you think?
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I think both are valid options, but am leaning towards the second. How would you calculate the trade entry points?
The entry would be the price you expect the index to be at when the other pair hits its stoploss.
So if the CAC hits its stop loss at 3030 it has gone up 30 pips so you would expect the DAX to be around 30 pips up too (around 6030) so the order would be opened at that price
So if the CAC hits its stop loss at 3030 it has gone up 30 pips so you would expect the DAX to be around 30 pips up too (around 6030) so the order would be opened at that price
SteveBanks
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Can't wait for private forum, I think I have found a magic formula for making this 1:1 eliminating 50% risk but obviously can't discuss just yet
Hi c0py (danny),
can't wait to hear about your formula. Application went in to T2W over the weekend so just waiting to hear from them.
Good luck tomorrow
Hi c0py (danny),
can't wait to hear about your formula. Application went in to T2W over the weekend so just waiting to hear from them.
Good luck tomorrow
I spilled it already
I thought about it and it shouldn't matter if non DIT owners read up the initial idea, we can the develop and discuss further in the private room
Astarte3141
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Sounds good. So we could still use the evaluator to tell us the figures to set up and then set up each order as contingent on reaching a stop loss on the other. Then that would be automatic wouldn't it?
Baldeaglebloke
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Good suggestion and this does minimise risk here, assuming that you don't run with the stps suggested by the evaluator - if we follow the above example and Vanilla Daily Index Trader (VDIT) and for arguments sake assume we lose £100 on the first trade and win £200 on the second trade then the net position is a gain of £100. If both had gone against us we would lose £200. So in order to win a £100 our risk would actually be £200 as we are likely to be entering halfway through the trade?.
The other divergence is that whilst DAX &CAC correlate over the longer term they don't always over the shorter term of 2/3 hours. I've had situations were I've almost achieved a limit profit before the stop loss kicked on the other trade. Equally I've been stopped out on one trade and close to being stopped on the other only for it to reverse and end up a winner. If I knew how to backtest this would be worthy of a good hard look. Anyone know how to backtest??
Cheers
SteveBanks
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NEIL-PILKY
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Hi
I like c0pys idea, not too sure I fully understand it though, took a big loss today. The first day the evaluator kicked in and increased my risk %
I like c0pys idea, not too sure I fully understand it though, took a big loss today. The first day the evaluator kicked in and increased my risk %
SteveBanks
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Hi Neil,
I wondered what had happened to you. lol
I know what you mean with the Evaluator. When it increases stakes like today and the trade wins it's great. But when it loses it's hard.
Chin up. When the private forum gets up and running there will be some really good discussions.
NEIL-PILKY
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Hi Neil,
I wondered what had happened to you. lol
I know what you mean with the Evaluator. When it increases stakes like today and the trade wins it's great. But when it loses it's hard.
Chin up. When the private forum gets up and running there will be some really good discussions.
Hi Steve
Sorry I wasn't on the forum this morning
I had a 9.20 appointment at the docs, took my laptop and dongle placed my trade sat outside the docs (with hindsight wish the mb signal had been poor, lol), placed it a bit earlier than 9.15. I am not despondant at all, looking forward to the forum going private and then we will be able to progress with some good ideas, looks like its already started
Hello all,
Interesting thread
Many moons ago Grey1 set out a great deal of useful information in these forums on pairs trading US stocks using VWAP and reversion to the mean.
His methodology worked well but it is for day trading and requires close attention to the screen.
Might help users of this system to get a different perspective.
Be interested to join the private forum.
Regards.
LII
Interesting thread
Many moons ago Grey1 set out a great deal of useful information in these forums on pairs trading US stocks using VWAP and reversion to the mean.
His methodology worked well but it is for day trading and requires close attention to the screen.
Might help users of this system to get a different perspective.
Be interested to join the private forum.
Regards.
LII
SteveBanks
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Welcome LEVII,
thanks for your post. I'll put you on our list of members waiting for the private forum.
I'm sure your contributions will be very gratefully received.
Many thanks.
Hi, I have been working on an idea along the same lines, had been looking at contingent and OCO (One Cancels Other) orders to try and achieve it but can't seem to find a way, now looking at writing a script in MetaTrader4 but I am a bit of a novice at such things.
I got dragged to church on Sunday and spent the whole service thinking about how to achieve this!!
I am sure there is a way of doing it!!
Steve, can you add me to the private list please.
SteveBanks
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