FPI - Fractional Product Inefficiency: The Impeccable Hedge

NeoTicker indicators

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deepleo
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Postby deepleo » Thu Oct 26, 2006 7:47 pm

Michal,

Hmm..Please forgive me for this..where do I need to calculate the correct Bid or Ask sides for this ring?

Thanks
Deepleo

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michal.kreslik
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Postby michal.kreslik » Thu Oct 26, 2006 7:53 pm

deepleo wrote:Hmm..Please forgive me for this..where do I need to calculate the correct Bid or Ask sides for this ring?


Simple:
  • use Ask price for FX symbol that is Bought
  • use Bid price for FX symbol that is SoldShort
Michal

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Postby deepleo » Thu Oct 26, 2006 8:10 pm

michal.kreslik wrote:
deepleo wrote:Hmm..Please forgive me for this..where do I need to calculate the correct Bid or Ask sides for this ring?


Simple:[list][*]use Ask price for FX symbol that is Bought[*]use Bid price for FX symbol that is SoldShort[/list:u]Michal
Michal,

You mean to determine the number lots for each pair to trade?

Please let me know
Thanks
DeepLeo

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michal.kreslik
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Postby michal.kreslik » Thu Oct 26, 2006 8:13 pm

Deepleo,

you must determine the correct price (Bid or Ask) and of course the correct number of lots to trade, too.

Michal

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Postby deepleo » Thu Oct 26, 2006 8:19 pm

Michal,

But my question is when I need to enter trade? I mean as the indicator is showing both (lower & upper) values as <1.
Per my understanding (please forgive me if I'm wrong) we should enter trade(s) when the value is <1 and close the trade when the value is >1.
I'm confused as both the upper & lower values are below 1.
Thanks in advance
DeepLeo

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michal.kreslik
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Postby michal.kreslik » Thu Oct 26, 2006 8:47 pm

DeepLeo (your avatar is scary :smt023 ),

as I said several articles above, it doesn't really matter whether the Impeccable Hedge open / close is below / above 1. The only datum that matters is the absolute difference between the FPI values at the time of open and close.

Michal

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Postby eagles » Thu Oct 26, 2006 9:16 pm

Here is a picture of with more time shown and it looks like your picture is correct. The value has been running below 1 for about the last day. In fact, it looks like it has stayed below 1 since this last uptrend started.

I don't know why (and haven't tried to figure it out).

The indicator I provided adjusts for bid & ask prices based on the spread value contained in the symbol properties and whether you have selected long or short in the inputs.

The indicator uses equal size lots for the calculation. I haven't gotten around to programming the math for balancing the ring as described in one of Michal's previous posts.

Hope this helps...


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Postby akasha » Thu Oct 26, 2006 10:08 pm

@michael

it's a nice one.
a few question

Conclusion

As exaplained, the Impeccable Hedge takes advantage of the mutual inefficiencies of FX quotes. We can use the FPI indicator to display the current state of the mutual inefficiency. The Impeccable Hedge trade makes very small amount of profit, but this profit is sure. The success of this concept depends very much on the quality of your broker’s execution.



what about the quantity of the broker's spread? will that effect the efficiency of these FPI stuffs~~

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michal.kreslik
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Postby michal.kreslik » Fri Oct 27, 2006 12:09 am

eagles wrote:Michal,

Can you provide a text file of the FPI rings for those of us who don't have NeoTicker?


Sure. I've exported the FPI rings for 24 FX symbols. There are 602 FPI rings total including the opposite direction rings (both Buy/Buy/SellShort and SellShort/SellShort/Buy).

The opposite direction rings are shown in parenthesis.

I've exported the rings into the .csv (comma-separated file), which means you can open it directly in excel - it will look like this:



but you can still work with the file as with the standard .txt file (no Excel file format bells and whistles).

The zipped .csv file is attached below.

If you can't see the attached file, please log in first.

Michal
Attachments
FPIRings.zip
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Nicholishen
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Postby Nicholishen » Fri Oct 27, 2006 12:58 am

michal.kreslik wrote:DeepLeo (your avatar is scary :smt023 ),

as I said several articles above, it doesn't really matter whether the Impeccable Hedge open / close is below / above 1. The only datum that matters is the absolute difference between the FPI values at the time of open and close.

Michal


Hi Michal!

I'm just curious... by the above quote, are you implying that it doesn't matter whether the hedge is buysellsell or sellbuybuy?

Thanks for the ring csv! :D

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