Jurnal Trading ijak8510

[ijak8510]

i wanna do some research about Triangular Arbitrage

Triangular Arbitrage is one of the forex trading strategies utilizing the imbalance value of the three currencies,
Example : GBP / USD, EUR / GBP, and the EUR USD,

the formula = GBP / USD x EUR / GBP = EUR / USD,
if the conditions are GBP / USD x EUR / GBP # EUR / USD,
then the triangular arbitrage opportunities arise.
This strategy practiced manually is difficult, because of the scarcity of opportunities that arise, and need the speed and timing to execute the order, because it is usually run by using softaware.


Here is my basic concept

Triangular Arbitrage

Currency formula (CF):
GBP / USD (GU) x EUR / GBP (EG) = EUR / USD (EU
Description :
GU price multiplied by EG must be equal to the EU

The Triangular Arbitrage Formula(TAF):
GU x EG # EU
Description :
Triangular Arbitrage arises if:
GU price multiplied by the price of EG is not the same as the price of the EU at the time

Entry Rule:
1. If the EU CF> EU TAF by a margin of at least 12 pips then we open trades: EU buy, sell EG, & sell GU
2. If the EU CF <EU TAF by a margin of at least 12 pips then we open trades: EU sell, buy EG & buy GU
3. We will not open trades if the difference is less than 12 pips

Lot used in TAF for each currency:
1. EU = 1 x lot (mini, standard)
Examples 0.10 or 1.0
2. EG = appropriate price at the time GU x lot (mini, standard)
Sample price GU 1.6381 then we open 0:16 or 1.63
3. GU = appropriate price at the time EG x lot (mini, standard)
Examples EG 0.7210 price then we open 0.72 or 7:21

Exit Rule there are 2 options:
1. Take Profit with the following calculation: the difference in pips (ex: 12) - total third spread currency (ex: fx version 8 open) = profit (4) x lot (1) = $ 40
2. Exit when price is in conformity with the CF

Sample case Using tickmill brokers
Prices on the chart, namely: GU 1.6381, EG 0.7210 and 1.1823 EU,
with spreads are 1.3 for EURUSD, 1.7 for GBPUSD , and 2 for EURGBP

and then triangular arbitrage opportunity appeared, because GU x EG # EU.
Value EU CF is supposed to 1.1811 due to the smaller than EU TAF by 12 pips,
then we open trades sell EU, buy EG and buy GU
With the lot size EU 1,
EG 1.63 (according to the price GU)
and GU 0.72 (according to the price EG that time )
We will take profit formula pips difference minus the total spread, ie 12-5 = 7 x 1 lot = $ 70

But i will do it with a twist
Instead i am wait the triangular opportunity
i will enter trades blindly, no analyzing anything

and only with this lotsize formula
XXX/USD = 1
YYY/USD = Lot size depend of XXX/YYY Price
XXX/YYY = Lot Size depend of YYY/USD price

For Example GBPNZD Trade below

 

[ijak8510]

GBPNZD triangular closed with nice profit

 

[signal24]

Can u pls explain more details of ur technique?

i wanna do some research about Triangular Arbitrage

Triangular Arbitrage is one of the forex trading strategies utilizing the imbalance value of the three currencies,
Example : GBP / USD, EUR / GBP, and the EUR USD,

the formula = GBP / USD x EUR / GBP = EUR / USD,
if the conditions are GBP / USD x EUR / GBP # EUR / USD,
then the triangular arbitrage opportunities arise.
This strategy practiced manually is difficult, because of the scarcity of opportunities that arise, and need the speed and timing to execute the order, because it is usually run by using softaware.


Here is my basic concept


But i will do it with a twist
Instead i am wait the triangular opportunity
i will enter trades blindly, no analyzing anything

and only with this lotsize formula
XXX/USD = 1
YYY/USD = Lot size depend of XXX/YYY Price
XXX/YYY = Lot Size depend of YYY/USD price

For Example GBPNZD Trade below

 

[man84]

What type of trading strategies is this?

 

[osazizi]

Isn't it arbitrage is prohibited by most brokers?

 

[ijak8510]

What type of trading strategies is this?

its called arbitrage.
and this one is failed one, because i mess my lot size
so the result of both account, one account profit , one account suffering in loss,

i've read somewhere the right size of Triangular :
EU-GU-EG
EU = 1 LOT
EG = 1 lot
GU = EG price

Isn't it arbitrage is prohibited by most brokers?

some of them prohibited this kind of trading, but some of ECN like Tickmill or ic markets, as far as i know, allowed this kind of strategy

 

[ijak8510]

long time not update this journal., and what i can say, my experiment had flaws on it. someone critized me if my entries are not perfectly hedged.

so, it threw up this concept.

and i will start a new trading journal using normal technical analysis

will deposit $50 into my Tickmill account and challnge my self how long it will last. and try to trade with tight stop loss using m15-h1

my trading plan with this money

1. only trade on major, even theoritically all i can trade every instrument that tickmill provided. forex, index, Cfds, metals. but i will stick with majors only.

2.try to put tight stoploss and take profit with healty risk reward ratio

will post about the trading rules tomorrow.

 

[ijak8510]

Let us made some market review for a moment before opened a trade. W
What happened in this week which is the majority of USD rivals stronger than the USD , which means that the long-term weakening of the USD in sight

This is due to weaker US economic data than anticipated.
PMI is below expectations,
ADP which is above forecast, Forecast 195k, actual 205K
The unemployment rate rose 8k

the NFP today, market expectations about jobs created and opened : 189k ,
and if the data released under 180k can harm USD fundamentally.

With the reluctance of the Fed to raise interest rates, the ECB QE plan in March 2016, and the BOJ is set negative interest rates, today's NFP data is crucial as a guide to where the next market direction next.

Technical analysis : [/ B], based on Tickmill weekly chart, the USDJPY this week , weakened as much as 500.0 pips.

Head and Shoudler has been formed, and if the NFP data this week could make close USDJPY weekly chart with a bearish engulfing pattern, then the USDJPY weakness for the medium-long term was inevitable with the first target at 113.00 area

[url]https://charts.mql5.com/10/112/usdjpy-w1-tickmill-ltd.png[/url] [/ IMG]

Recommendation :

USDJPY Bearish,
risk in the area of ​​121.75 -122.00
Target: 113.00, 110.00, and 109.00

 

[ijak8510]

Lets Rock And Roll

Sell EU , Reason : Double Top Formation, Seller candlestick pattern and price opened under EMA 12
Got 0.2 spread, great
Entry at 1.12014
SL at 1.12164

Spoiler

Sell GBPUSD Averaging minus mode
Sell 1 at 1.44090
Sell limit at 1.44490
Reason : Support become resistance and Buyer at H1 buyers are not able to maintain their strength, and candle close under EMA 12

Spoiler

Sell EURAUD
Reason
1. because i have 1 sell eurusd position
2.At M15 price already Break and open new candle under EMA 12, need H1 confirmations
Sell @ 1.59076
SL @ 1.59326
Update Hit SL

Spoiler

 

[ijak8510]

Update :
open 2 trades EURAUD
Open trade 1 : 0.02 lot @ 1.58761 SL @ 1.59161
Open trade 2 : 0.02 lot @ 1.58861 SL @ 1.59561
TP @ 1.57260
Got good spreads with this crosses , around 2.0 pips
nice



Reason : Engulfing on EMA 12

Spoiler