FPI - Fractional Product Inefficiency: The Impeccable Hedge
Moderator: moderators
hi, michal. please sorry for my english. i've been testing this strategy for a long time. and i've noticed one thing. if you use the ring for example usdchf * gbpusd * (1/gbpchf) and it ishows that the fractional product is > or < than 1 it doesn't depend on the real balance. for example if we've opened a ring 2008.08.05 00:00 GMT BUY USDCHF 1.0480 BUY GBPUSD 1.9618 SELL GBPCHF 2.0566 and closed it 2008.08.18 23:00 GMT USDCHF 1.0983 GBPUSD 1.8620 GBPCHF 2.0448 we would lost 377 pips (503-998+118=-377)though we've opened the ring when the fractional product was 0.9997 and closed it when it was 1.0001. According to your theory we must have earned some money, but instead of it we've lost it. Then i had an idea to replace the pairs. instead of usdchf*gbpusd*(1/gbpchf) i used (1/usdchf)*gbpusd*gbpchf. the result of this replacement was "a new currency pair"it has it's own rises and falls, as if it was a currency pair. if it falls we should buy usdchf sell gbpusd sell gbpchf, and if it rises we should sell usdchf buy gbpusd buy gbpchf. it is quiet a liquid instrument, it is enough to move a little and the result is a big profit or a big loss. the same is if we use usdchf*(1/gbpusd)*gbpchf. I want to know your opinon. again, sorry for my english.
Please add www.kreslik.com to your ad blocker white list.
Thank you for your support.
Thank you for your support.
If you opened a ring and lost pips then your ring was not balanced and you were taking a position. I repeated what you did and noticed you used one standard lot on all pairs, which is not quite correct. You're almost there but I think the key part you're missing is the number of lots of each pair.
I would recommend going back and looking at some of the previous examples and see how one of the pairs does not use the same number of lots as the other two pairs.
I would recommend going back and looking at some of the previous examples and see how one of the pairs does not use the same number of lots as the other two pairs.
Brough, thanks for the answer. yes i used one standard lot on all pairs, but the thing is that if we use different lots our ring will be closed, and we couldn't earn anything because there will be no balance fluctuations. we can earn money only if one of pairs moves faster. tell me please if i am mistaken. thanks.
Arb Calculator
I have download this arb calculator and used it a bit different and it WORK$$$$$$
What you need to do is enter the current rates.
Then change with the arrows just the EURGBP rates till you will see either
a BUY or SELL indication
Then keep changing the values to how much money you wish to make.
Enter your trades manually, they will be either a buylimit or selllimt orders.
It works every time
Now what I need is someone who could do this auto, like a MT4 EA
Any ideas how this arb calculates this?
What you need to do is enter the current rates.
Then change with the arrows just the EURGBP rates till you will see either
a BUY or SELL indication
Then keep changing the values to how much money you wish to make.
Enter your trades manually, they will be either a buylimit or selllimt orders.
It works every time
Now what I need is someone who could do this auto, like a MT4 EA
Any ideas how this arb calculates this?
- Attachments
-
- facalcwin.zip
- (108.2 KiB) Downloaded 599 times
Hello everyone,
Could this FPI ring be traded more successfully across multiple brokers simultaneously?
If an application were to be coded enabling the application to "share" information between 3 separate brokers, and automate trading operations respectively, I believe this trading method could work great.
Best of all? The brokers would not know what you were doing.
Could this FPI ring be traded more successfully across multiple brokers simultaneously?
If an application were to be coded enabling the application to "share" information between 3 separate brokers, and automate trading operations respectively, I believe this trading method could work great.
Best of all? The brokers would not know what you were doing.
Please add www.kreslik.com to your ad blocker white list.
Thank you for your support.
Thank you for your support.
- michal.kreslik
- rank: 1000+ posts
- Posts: 1048
- Joined: Sat May 13, 2006 2:40 am
- Reputation: 36
- Location: Monte Carlo, Monaco
- Real name: Michal Kreslik
- Gender:
wolfe wrote:Hello everyone,
Could this FPI ring be traded more successfully across multiple brokers simultaneously?
If an application were to be coded enabling the application to "share" information between 3 separate brokers, and automate trading operations respectively, I believe this trading method could work great.
Best of all? The brokers would not know what you were doing.
FPI arbitrage can't be run with retail brokers, much less with multiple retail brokers.
Michal
- pineapples
- rank: <50 posts
- Posts: 45
- Joined: Fri May 04, 2007 11:49 am
- Reputation: 0
- Location: Belgium
- Gender:
Use of multiple brokers doesn't eliminate the "timing of execution" risk; if anything it increases it. If you manage to get two orders placed simultaneously and the third one takes twenty five seconds longer, then the whole point of using this system is negated.
I brought this possibility up earlier in the thread, suggesting also the use of separate accounts working together (the old "synchronise watches, boys" routine).
The conclusion of that discussion was that the only practical means to use FPI would be through the use of a "basket order" that a willing broker would provide - this still would not guarantee simultanaeity of order execution.
I brought this possibility up earlier in the thread, suggesting also the use of separate accounts working together (the old "synchronise watches, boys" routine).
The conclusion of that discussion was that the only practical means to use FPI would be through the use of a "basket order" that a willing broker would provide - this still would not guarantee simultanaeity of order execution.
- michal.kreslik
- rank: 1000+ posts
- Posts: 1048
- Joined: Sat May 13, 2006 2:40 am
- Reputation: 36
- Location: Monte Carlo, Monaco
- Real name: Michal Kreslik
- Gender:
- michal.kreslik
- rank: 1000+ posts
- Posts: 1048
- Joined: Sat May 13, 2006 2:40 am
- Reputation: 36
- Location: Monte Carlo, Monaco
- Real name: Michal Kreslik
- Gender:
EFX group can't be used for running FPI.
In fact, I don't know of any retail forex broker out there that would fit the stringent requirement of precise order processing and execution.
This is one of the reasons I haven't contributed to this thread much lately as knowing that the FPI requires an interbank market access, FPI is only accessible to traders/investors with something like $1 mil+ in trading capital.
I guess that for most readers it would be a purely theoretical discussion then.
Michal
In fact, I don't know of any retail forex broker out there that would fit the stringent requirement of precise order processing and execution.
This is one of the reasons I haven't contributed to this thread much lately as knowing that the FPI requires an interbank market access, FPI is only accessible to traders/investors with something like $1 mil+ in trading capital.
I guess that for most readers it would be a purely theoretical discussion then.
Michal
Please add www.kreslik.com to your ad blocker white list.
Thank you for your support.
Thank you for your support.