in the end of the last week i noticed something very unusual on stock market. during the new series of tests on forex i had taken over ten positions on metatrader5 app (mt5). (few days earlier i was using only mt4 app for the new tests, but as there began issues in placing orders, i also opened account on mt5 and placed the failed orders there. now i use both mt4 and mt5 apps). on the mt5 i placed the orders such a way that several currencies had opposite bets, so if a specific currency would sharply change its value making me lose money on that bet, i would somewhat balance out losses with another bet (would lose less in total). the unusual thing was that all of the bets lost lots of money in just half a day, well above the value of the spread, with not a single bet showing gains. i don’t know how the brokers manage to do that, or how the markets can move such a way that both positive and negative bets on the same currencies lose money!? i don’t think that mt4/mt5 apps are not representing true values — even the demo accounts for training are supposed to show the live data from forex. anyway, over the weekend i came up with a solution to counter any manipulations. i selected twenty currency pairs which are available for betting on both mt4 and mt5 apps.. on each app i balanced out the currencies so that no single currency would create sharp losses, and, more importantly, i reversed the bets between the apps. remember, my method (developed in many years of research with computer simulations) is to increase/decrease bets depending on losses/gains on each currency pair. (read my book about it). here’s the selection..
mt4 // CP // mt5
+ // AUDCAD // –
– // AUDCHF // +
+ // AUDJPY // –
– // AUDNZD // +
– // AUDUSD // +
+ // CADCHF // –
– // CADJPY // +
+ // CHFJPY // –
– // EURAUD // +
– // EURCAD // +
– // EURCHF // +
+ // EURGBP // –
+ // EURJPY // –
– // EURNZD // +
+ // EURUSD // –
+ // GBPCHF // –
– // GBPJPY // +
+ // GBPUSD // –
– // NZDJPY // +
+ // USDCAD // –
mt4 balance .. // mt5 balance ..
AUD + – + – – + = 0 // AUD – + – + + – = 0
CAD – + – + – = -1 // CAD + – + – + = +1
CHF + – + + – = +1 // CHF – + – – + = -1
EUR – – – + + – + = -1 // EUR + + + – – + – = +1
GBP – + – + = 0 // GBP + – + – = 0
JPY – + – – + + = 0 // JPY + – + + – – = 0
NZD + + – = +1 // NZD – – + = -1
USD + – – + = 0 // USD – + + – = 0
placing bets this way, no matter how the currency market changes and no matter how brokers try to manipulate the prices, you will comfortably stay within your financial capacity to gamble. there’s still one issue though — the balance on some currencies may change so much that they won’t equalize anymore (because on losing side you increase bets while on winning side you decrease), but there are several mathematical solutions to tackle it. the most robust way is not to lower bets on certain currencies, only keep “collecting profits” (closing an order taking profits and placing the same order again, without changing value, but on the opposite side which is losing, keep increasing exactly as the formula tells you). you can even increase your bets even if you gain on the currency pairs, if the difference with the opposite bets is growing too big. but you can never decrease bets without taking out profits first (exactly by the formula), because this way you lose money. you can (and must) close all your positions (every single currency pair) if and only if your total balance inreases beyond the previous total balance, including all losing positions, and then begin again with your selected minimum bets on all positions. (read more in the book). tackling the above noted issue in the robust way requires more money (bigger backup cash) to gamble, thus you cannot begin with reasonably big bets for a significantly big total gain.
there are other, more neat mathematical strategies to balance your bets during big changes in currency values, but that is my trade secret and i’m currently still testing my methods with live data, to be sure and to find any possible issues.. and perhaps even better formulas.
about my ebooks, free download..