Launching Bunjip EA - Wish me luck!

[CanOz]

so really it should pick the same spot to trade?

Almost to the minute i would think.

Cheers,


CanOz

 

[Stormin_Norman]

thats strange then you have such a variance in the results then.

same broker?

 

[CanOz]

thats strange then you have such a variance in the results then.

same broker?

Same data, this is still being tested Norm! Esignal data.

Its not an EA, its just a set of signals being tested over historical data at this stage.

Cheers,


CanOz

 

[Stormin_Norman]

farks me then. that's strange.

 

[pilbara]

A big question I have is whether the financial system will allow an auto trading system to be that successful.

if the EA makes money, then we must identify who is losing money. The EA trades frequently and consistently which creates liquidity for the retail broker. Most likely the EA opens a position against one trader, and closes it against a different trader, all within the retail broker's book. The broker would like the EA because they make more money from spreads. This is risk free income. The broker is just redistributing money between traders and taking commission.

If the retail broker cannot match orders internally they must hedge the positions in the wholesale market. The Tier 1 interbank dealers sit on top of the market pyramid with vast resources to make profit at the expense of everyone else in the market. The "financial system" allows these dealers to succeed, so it cannot prevent a smaller EA doing much the same thing. For details of how they do it see FTI's thread at ForexFactory
http://www.forexfactory.com/showthread.php?t=57639

For dealers, its a different game, because when markets are going up in a BEAR market, customers keep making them short, their book keeps getting bigger short, but their average cost of being short keeps going up.
all they have to do is to wait for the trend to enforce and
when the market returns to the point where the buying started ,
he would make nearly the amount of money that made him short in the first place.

For this to happen, he has to have a book big enough to accommadate the customer base.
AND as the market swings back towards the start point, he has to ascertain that his book of shorts, be kept constant.
This is because on the way down the customers will be making him long.
So by constantly covering back to back on the way down he maintains his book short.
So for the dealer, as long as he maintains his poise in the direction of the markets major trend,
he will always make "scalp money", guanranteed.

His modus operandi, is to "duck and move quickly"
so as to have a better average on the up swing towards stops to maximise his shorting near the top of the swing.
This scenerio is most effective if there are stop near levels where he las a large order to sell,
where he can help the customer sell OB and "kill the sitting duck stops" in the same blow.
Another senerio is where by the heavy selling is CB levels or specific sell zones,
where many teir 1 are ready to pounch on the buyers.
You must understand that only tier 1 and some big tier 2 will have this advantage.

This is the reason, why you have rubber band snap backs in the direction of trend directions,
and slow puffy moves counter trend.
Am I making any sense to anyone here?

So we use daily trend as the direction to build book size and short charts to make market for retraces.

The trick is to hold very steadfast to the position allowing the snowball build on you,
the maxim is to be able to take the punches first,
once the rubber band swings back, whack them like theres no tomorrow,
within your capacity and keep taking profits along the way untill the frenzy slows off
then square down for the next attack.

 

[Stormin_Norman]

that's a good summary of how i see the market operating and how the EA fits into it.

it should be ok, as its not widely used (only my own companies). if positions get to big, it can be spread across a few brokers and larger brokers, so one doesnt start getting flooded by it.

 

[Wysiwyg]

If the retail broker cannot match orders internally they must hedge the positions in the wholesale market. The Tier 1 interbank dealers sit on top of the market pyramid with vast resources to make profit at the expense of everyone else in the market. The "financial system" allows these dealers to succeed, so it cannot prevent a smaller EA doing much the same thing.

Good contributor is Pilbara.

In reference to the bold type. Doing away with a dealing desk would surely be beneficial to an individual trader in that they have access to multiple participants.This below for everyone to benefit.

A Forex ECN broker does not have a dealing desk but instead provides a marketplace where multiple market makers, banks and traders can enter in competing bids and offers into the platform either inside or outside the spread, allowing traders to be market makers and have their trades filled by multiple liquidity providers.

A trader might have their buy order filled by liquidity provider "A", and close the same order against liquidity provider "B", or have their trade matched internally by the bid or offer of another trader.

 

[pilbara]

Doing away with a dealing desk would surely be beneficial to an individual trader in that they have access to multiple participants.
"A Forex ECN broker does not have a dealing desk but instead provides a marketplace where multiple market makers, banks and traders can enter in competing bids and offers into the platform either inside or outside the spread, allowing traders to be market makers and have their trades filled by multiple liquidity providers."

That makes sense when the individual is making trades of the same size as the other participants in the ECN. The minimum sizes are quite large for genuine ECNs.

For example, this broker gives you access to the following ECNs: Currenex, Lava FX, Hotspot FXi, Baxter FX, FXall, but requires the following minimums:

http://www.vcapfx.com/forex-commissions.asp

Spreads: Bid/Ask spreads are dependent on market liquidity.
Commissions: Determined by monthly volume transacted.
Lot Size: $100,000 USD Per Currency Lot.
Min Trade Size: $500,000 USD per trade.
Min. Equity: $250,000 USD minimum required to open account.
Margin: 1% - 6% varies according to account balance and strategy.

Another broker indicates smaller deal sizes, but also includes the interbank EBS and Reuters (minimum deal size 1 million). I imagine the DB Autobahn FX would be similar to EBS and Reuters.

http://www.aarontrade.com/html/forex_account_structures.html

Prime Hub Currenex - Minimum notional deal size 100k.

Hotspot Institutional - Minimum notional deal size 100k.

EBS Prime - Minimum notional deal size 1 Million.

Reuters - Minimum notional deal size 1 Million.

Lava FX - Minimum notional deal size 50K.

Baxter FX - Minimum notional deal size 100K.

FXall Accelor - Minimum notional deal size 100K.

CAX Aggregator - Minimum notional deal size 500K.


In an ECN you get to see details of the size available at a particular price, which becomes crucial when you are dealing with large orders. For retail traders with small accounts this is irrelevant. You'd rather have your broker combine your little orders together and then make a combined large order with an ECN participant.

The following image shows a sample screen from Hotspot, with a spread on EUR/USD at 1.5 pips. On the Bid side, there is $18.5 million at 1.21360, $21.8 million at 1.21355, $20.8 million at 1.21350 etc.

 

[Wysiwyg]

That makes sense when the individual is making trades of the same size as the other participants in the ECN. The minimum sizes are quite large for genuine ECNs.

For example, this broker gives you access to the following ECNs: Currenex, Lava FX, Hotspot FXi, Baxter FX, FXall, but requires the following minimums:

http://www.vcapfx.com/forex-commissions.asp

Spreads: Bid/Ask spreads are dependent on market liquidity.
Commissions: Determined by monthly volume transacted.
Lot Size: $100,000 USD Per Currency Lot.
Min Trade Size: $500,000 USD per trade.
Min. Equity: $250,000 USD minimum required to open account.
Margin: 1% - 6% varies according to account balance and strategy.

That is institutional and here is professional ...

Spreads: Bid/Ask spreads are dependent on market liquidity
Commissions: Determined by monthly volume transacted and clearing firm selected
Lot Size: $100,000 USD Per Lot
Min Trade Size: $100,000 USD Per Lot
Min. Equity: $7,000 USD minimum(HotSpot) required to open account.
Margin: 1%

Nothing unusual or out of reach for small traders.One standard lot is US$100,000 with 100:1 leverage.

 

[pilbara]

Yep that sounds reasonable!

BTW I think that $7000 minimum is for Hotspot FXr (Retail) which has been bought out by FXCM. There is major rationalisation going on the retail forex sector because the regulators are increasing the minimum capitalisation requirements, it's now $15 million and will rise to $20 million next month. So Hotspot decided to close the retail side of the business and transfer those accounts to FXCM, who have created a pseudo ECN called active trader. We are seeing fewer but bigger players in the retail side of the business.

 

[Wysiwyg]

Yeah just further down the rabbit hole every time.

 

[pilbara]

nah it's about climbing the ladder, from small broker to big broker!

For an EA we all agree the best place to start is with a MT4 broker but then what is the next step up? What is the best medium size broker for an EA like Bunjip? I think it might work well within the large liquidity pool created internally by one of the very largest retail brokers (like Oanda) or does it require access to true ECN once the order size gets beyond a certain limit?

 

[Stormin_Norman]

nah it's about climbing the ladder, from small broker to big broker!

For an EA we all agree the best place to start is with a MT4 broker but then what is the next step up? What is the best medium size broker for an EA like Bunjip? I think it might work well within the large liquidity pool created internally by one of the very largest retail brokers (like Oanda) or does it require access to true ECN once the order size gets beyond a certain limit?

i think the next step is OandA; but im open and interested in people's thoughts.

which platform/language to move to is probably another important question.

 

[pilbara]

I think Ninja Trader + Interactive Brokers would be a platform/broker combo worth evaluating.

choices for Oanda might be limited. You could code the entire EA as a server application with their API, and then monitor the EA and override trades using their regular platform.

Oanda has a FIX protocol so your programmer could use that to connect to a range of trading platforms, like X Trader.

Maybe if you want to also trade futures, options and precious metals etc,
check out this list of high-end platforms certified for use with CME http://www.cmegroup.com/globex/intr...tionality/certified-trading-applications.html

 

[electronicmaster]

I think Ninja Trader + Interactive Brokers would be a platform/broker combo worth evaluating.

choices for Oanda might be limited. You could code the entire EA as a server application with their API, and then monitor the EA and override trades using their regular platform.

Oanda has a FIX protocol so your programmer could use that to connect to a range of trading platforms, like X Trader.

Maybe if you want to also trade futures, options and precious metals etc,
check out this list of high-end platforms certified for use with CME http://www.cmegroup.com/globex/intr...tionality/certified-trading-applications.html

I hope a version would work with MT4/5, Because it works well (and so far the only one) with Linux (and I suppose the MAC too, since WINE is used).

 

[MRC & Co]

Whatever happened to the Bunjip?

 

[Stormin_Norman]

going strong!



after the hiccup when the fed printed money (which it turned out the EA would have recovered from, but i didnt want to risk it at the time) normal service has resumed.

some programming changes were made to make it more safe, which has reduced the return by about half.

late last week i decided the old system mightnt have been broken, so re-installed it - and it went into a nice big drawdown (seen above) - so ive changed for good back to the new one.

on the .01 lot setting with $5k account, its returning about $650 a week.

 

[CanOz]

going strong!



after the hiccup when the fed printed money (which it turned out the EA would have recovered from, but i didnt want to risk it at the time) normal service has resumed.

some programming changes were made to make it more safe, which has reduced the return by about half.

late last week i decided the old system mightnt have been broken, so re-installed it - and it went into a nice big drawdown (seen above) - so ive changed for good back to the new one.

on the .01 lot setting with $5k account, its returning about $650 a week.

Hmmm,

Sounds like its teaching you a bit about yourself too Norm?

I guess thats why you test too.

CanOz

 

[MRC & Co]

Great stuff.

Cheers for the update. Always good to see.

 

[Wysiwyg]

I wonder if the Easter Bunyip is happy ?