Hey guys. I wrote the EA holyguy7 is referring to. A few comments:
Good catch. No, there is no speculation - the entire ring is supposed to close together. I'll have to look at holyguy7's logs to see what happened.
We are forward-testing, not back-testing. If any EA would NOT work with back-testing, this would be it.
First, many thanks for laying out the principles of FPI so clearly. Fascinating!
The EA implements strict FPI as I understand it from this thread. To make configuration easy for the user, I allow them to set a pip goal (per ring), but internally this is translated to FPI. For example, in your first post in this thread, you mention how a swing from negative FPI to positive might yield a profit of 5-6 pips. In our EA, the higher you set the pip goal, the more both the entry and exit FPI must deviate from center. But the rings are perfect hedged using the formulas laid out in this thread. Total ring spread is added to the pip goal to arrive at the FPI figures.
Regarding swap: based on my experience and calculations, the position sizes are crucial when determining whether or not a ring will generate positive swap. Swap payments are based on the size of your position, so I don't know how it could be otherwise.
The point here is that a ring can have two negative-swap pairs and one positive swap pair, and still generate positive swap overall because of the position sizes. But the opposite is also true with other rings: your swap profit will disappear if the negative-swap pairs overtake the positive pairs.
When I first wrote the EA I didn't take this into consideration, and perfectly-hedged rings that I thought would generate positive swap (based on the rates retrieved programmatically from the broker), did not. After I made the adjustment to consider position sizes, everything now comes out exactly as it should. (Not all brokers have positive swap rings.)
You state a couple of times in recent posts that position sizes don't matter when determining swap, and you obviously understand the issues, so please explain what you mean so that I can continue to learn.
Thanks again, Michal. If you limit the rings to those which generate good swap, this may be the safest Forex trading method I've ever seen.