FPI - Fractional Product Inefficiency: The Impeccable Hedge

NeoTicker indicators

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michal.kreslik
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Postby michal.kreslik » Sun Jun 15, 2008 10:45 am

There are a couple of fundemantal problems with retail brokers, in order of importance:
  • sloppy order processing
  • technical instability
  • cost of trading (prices + commissions)

Michal

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Stretchdss
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Postby Stretchdss » Mon Jun 16, 2008 5:28 pm

craig,

Absolutely correct...
One of the pairs would be more than 1 "unit",
causing a spread somewhat more than my spreadsheet.
However, I still think there are some rings well within the
gross deviation from 1 including this spread that could offer us
the opportunity to profit.

Before we enter any "trades" we will need to find the potential for profit,
as I discussed above.
I would suggest a profit potential of 2:1 or 1.5:1 (very aggrerssive) as measured against the combined spread.
We would only enter when the deviation from 1 is at it's statistical peak,
and our combined spread (calculated that moment) allows for that 2:1 profit potential.


michal,

Is it really that bad ?
A I see it, there are 2 critical issues...
1. Being able to get three pairs filled simultaneously, and
2. Platform stability. Your platform must stay up while you
have a "trade" open.

1. Can the platform watch to make sure that all 3 pairs are opened
as was previously discussed ? If not, close those that were opened ?
2. Would it be possible to place Stops, just incase of a platform crash ?
I know the simple answer is "NO"... ???

I was considering using EFX / MBT...
Still not good enough ???

Has anyone looked at Tradeview Forex ?
They have MT4...
They claim to have STP...
Spreads are alittle higher, but not too bad...
They have fractional pricing, and I would assume fractional lots as well...

Stretchdss

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Postby craig66 » Mon Jun 16, 2008 7:12 pm

When looking at profit potential you need to include commission and spread, the commissions at EFX are atrocious and the stability of Navigator?...well I didn't have much luck with it. MT4 is also useless for the real time monitoring of more than one symbol, I'm going to set up a monitor on the IB feeb and see whats going on...

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Postby Raphael » Thu Jun 26, 2008 4:39 pm

Hello everybody, hello Michal

First of all, thank you for the time you took to share this great idea. It might be viable. But before testing it, I have a question:

what is the position of brokers regarding this practice of arbitrage? I tried searching through the service agreement, and I found that they forbid "market timing practices". Problem is, their description of "market timing practices" is so vague that it could be anything.

So is there anyone who knows brokers positions about this?

Thank you,
Raphael

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Postby michal.kreslik » Thu Jun 26, 2008 5:03 pm

Raphael wrote:Hello everybody, hello Michal

First of all, thank you for the time you took to share this great idea. It might be viable. But before testing it, I have a question:

what is the position of brokers regarding this practice of arbitrage? I tried searching through the service agreement, and I found that they forbid "market timing practices". Problem is, their description of "market timing practices" is so vague that it could be anything.

So is there anyone who knows brokers positions about this?

Thank you,
Raphael


The brokers' attitude towards FPI is irrelevant as no retail broker has the technical capacity to even let you run it effectively :)

Michal

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Postby Stretchdss » Thu Jun 26, 2008 5:07 pm

what if you only tried to run 3 - 4 rings ?

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Postby Raphael » Thu Jun 26, 2008 8:28 pm

michal.kreslik wrote:
Raphael wrote:Hello everybody, hello Michal

First of all, thank you for the time you took to share this great idea. It might be viable. But before testing it, I have a question:

what is the position of brokers regarding this practice of arbitrage? I tried searching through the service agreement, and I found that they forbid "market timing practices". Problem is, their description of "market timing practices" is so vague that it could be anything.

So is there anyone who knows brokers positions about this?

Thank you,
Raphael


The brokers' attitude towards FPI is irrelevant as no retail broker has the technical capacity to even let you run it effectively :)

Michal


Okay, but let's say it can "work". Is it a problem for brokers? I'm asking you this because I think this can work, but not with market inefficiency, but rather broker inefficiency. I found that some brokers have FPI variations of several hours of length and of great amplitude. And before investigating further in this, I would like the opinion of someone who really knows the field of forex trading.

And by the way, I wonder, if it was a problem, why? Why a honest broker would have problem with arbitrage, since they shouldn't loose anything?

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Postby FXStorm » Wed Jul 16, 2008 8:31 pm

Raphael wrote:
Okay, but let's say it can "work". Is it a problem for brokers? I'm asking you this because I think this can work, but not with market inefficiency, but rather broker inefficiency. I found that some brokers have FPI variations of several hours of length and of great amplitude. And before investigating further in this, I would like the opinion of someone who really knows the field of forex trading.

And by the way, I wonder, if it was a problem, why? Why a honest broker would have problem with arbitrage, since they shouldn't loose anything?


hi Raphael,

The forex is 1 win money when 1 loose money , simple as that. One think the price will go up and the other one think the price will go down so with that principle, if you win all the time, what happen to your bucket shop broker ? you play in a artificial market dont forget that with that type of broker so who is the counterpart of your trade ? its why they dont want you to do that type of strategy.

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Postby linuxpower » Fri Jul 18, 2008 3:01 pm

If someone test in live or demo this strategy...

It's better exit the ring on Extremun or PNL profit ?

Thx 4 advices.

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Postby linuxpower » Thu Jul 31, 2008 1:25 pm

No more news here ? thread dead ? :(

michal ?

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