Forumsee logo

Simple High Profit low Drawdown Triangular Arbitrage

Trading Systems @ Forex Factory - www.forexfactory.com
Very basic summary

*******************************

1) Buy 1 unit GBPJPY

2) Sell 1 unit GBPUSD

3) Sell ?? units using the USD in point (2) in USDJPY to balance everything out

Do this randomly at any time if no open positions.

Close in profit and open other direction (1) Sell (2) Buy (3) Buy

Close in profit.

Rinse and repeat.

Can this work or what is the pitfalls with this idea ?

*******************************

Detail

*******************************

OK I am still new in this, but must say triangular arbitrage looks interesting.

I made an EA to trade GBPUSB, GBPJPY and USDJPY

Basically

1) Buy 1 unit GBPJPY

2) Sell 1 unit GBPUSD

3) Sell ?? units using the USD in point (2) in USDJPY to balance everything out

This basically ZEROs your position minus spread, commission and swap.

Just hold on to this until in profit.

It will oscillate around the ZERO point.

Once I make profit I swap the above 123 points to Sell, Buy, Buy.

My entry is random and then go from there.

Now sometimes you do accidentally get in at just the wrong time.

Basically buying at the highest point and it never gets back to that point.

In 2 years time I found it about 9 times.

You can see these in the load spikes at the bottom of the chart.

This problem is solved by a minor grid.

Basically once you unluckily buy at the highest point then you will be stuck, but no worries, because it can only fall so far before coming back, but never past that point again so just wait a bit and let it fall and once it fell enough then Buy again the same amount and leave it for a guaranteed profit a bit more than half way back so just wait a bit.

Now as I said My speciality is maths and programming, but I am new to the forex market.

The demo EA I wrote I ran from 2015-06-23 till 2017-06-16.

I started with $1000 and ended with $2,725,839.38

Maximum drawdown during this time was 25% of the account.

I did have a safety catch in the system to prevent losses from going beyond 25% which was hit 2 times during the 2 year run, which does not affect the EA seeing that it will adapt itself to the next balance as needed.

The cause for the 25% drawdown spikes was weekend gaps on the Monday.

I tried preventing Friday trades which caused the maximum drawdown to drop to 15%, but the ending profit also dropped to about $1,800,000.00

Other things to note was that I was maxing out my Metatrader 5 back test lot size at 99 lots after the 1 year mark at about 2016-06-28 and from there it stopped growing exponentially and started a slower sequential growth.

In the live environment you can split your account into multiple accounts long before it reaches the limit for even more profit.

The 25% drawdown hits will probably also increase if you can keep the exponential growth growing from 2 hits to about 4 hits, maybe 5 at most, but the EA is designed for it and can handle about 20 times 25% hist before starting to show a loss, because the growth rate is about 100% every 2 months and at worst it hit the 25% drawdown 2 times in one year..

I do not have funds to test this live, but demo testing seem quite good.

Any advice will be great.

I even found this to be profitable using a starting capitol of only $100, but at this price all 3 pairs will start at the same 0.01 lots, which is a bit off in balance seeing that the USDJPY can not be the same as the other, but once it breaks the $1000 profit mark it works good and the $10,000 mark is just rocket fuel for it.

Ignore the upward spikes in the charts.

The EA is told to start selling the highest profitable once first.

What matters to me is the equity and how far it falls after opening a 3 pair group.

The 2 pair 25% drawdown happened in the beginning of the chart and therefore is almost invisible when compared to the profit of the rest of the chart.

*******************************************************************************

UPDATE : 2017-06-17

*******************************************************************************

I added the EA, but please be careful and DO NOT USE ON LIVE ACCOUNT.

It is extremely unstable and only usable for back testing and maybe Demo.

To run the EA.

1) Make sure you have got no open positions on you WHOLE account.

2) Attach it to a GBPUSB or GBPJPY or USDJPY chart.

ONLY ONE CHART and not multiple charts.

Any time frame.

It just need to be active and receive tick signals from anywhere.

You can actually attach it to any chart, but the tick signal timing will differ so a one of the top 2 pairs will probably work best.

3) I suggest a starting account with $10,000, but it should work with less.

As stated it even worked on a $100 account, but it is risky with whiskey seeing that the USDJPY pair is not balanced correctly then.

4) Thats it.

No settings or anything is needed.

It does check spreads and will not open trades if the spread is too high.

I suggest a ENC/commission broker with low spreads.

It will take about 6 months for it to average out and show real profits.

Or sooner if you are lucky.

It does some trades once every 3 days on average, but can do a few per minute if the maker moves a lot.

Keep in mind that this version of the EA is set to EXTREMELY aggressive.

I can set it to a safer settings which will still make about 500% profit a year, but hey IM A DAREDEVIL Or I was dropped on my head to much.
Date: Jun 17, 2017   


Last videos:

CSV/LiveTicks to chart application
CSV/LiveTicks to chart application
Offline Renko Chart Generator for MT4
Offline Renko Chart Generator for MT4
Russel Waves. Trading the way Nature flows.
Russel Waves. Trading the way Nature flows.
Fast optimization by indicators ranges. 1K results for 1 sec.
Fast optimization by indicators ranges. 1K results for 1 sec.
indicators we use
indicators we use
Live Prices into Excel from IB
Live Prices into Excel from IB
CityTrader for futures trading
CityTrader for futures trading
Scroll Chart Bar-By-Bar
Scroll Chart Bar-By-Bar

Cars ·
Travel ·
Pets ·
production-frontend