Automated Systems -any hope? :(((

[globalmkt]

Dr Zogg,
Are you trading live with Alpari? If so, what has been your experience with them? eg with regard to ease of withdrawals etc
I believe funds are held in a Riga bank.. is this correct?
Any info re yr experience with them would be appreciated.

cheers
TS

[craig66]

Interesting stuff, how does replacing a losing trade with a smaller losing trade help to manage risk?

[craig66]

You seem to be hedging with EUR/USD & USD/CHF, the implication being that risk can be managed via the correlations in these symbols. Is this not the same as simply trading EUR/CHF? do you take the volatiliy/trend of the EUR/CHF into account when hedging?

[craig66]

Another (probably stupid) idea occured to me, instead of hedging with the CHF why not take a opposite position on the same symbol?

[Dr. Zogg]

Craig, I don't use USD/CHF to hedge. I hedge the pairs against themsleves. I just happen to trade two pairs. For every 100k I have I'll bring a new pair onboard. I just can't afford new pairs right now.

The smaller trade thing was an example. Basically on every tick I go thorugh the portfolio, add all the positions up and then try and work out what my chances are of wiping out. After a period of time it get's to a point where I have to adjust overall exposure...smaller trades are just one way of handling it.

[craig66]

How do you define risk/exposure? most people would use a rule like 1% risk on any given trade, define the width of the stop and work backwards to the trade size. But it seems you have multiple trades open and most do not have stop losses, so you ony really have total profit (counting hedges) on all trades (I would guess), do you try to keep this to a percentage of you capital?

I'm facinated by low draw down in you statement as well, how do you know when to un-hedge? does not the spread eat your gains somwhat?

[Dr. Zogg]

Carig, it's a complex discussion. And there's only one way to figure it out.

Start trading randomly, not only in direction but trade sizes too, no stops, and make it work....

That will teach you how to do this. You'll find yourself constantly trying to work out how and when your portfolio will fail and how close you are to that. Then if you open a new trade the whole picture changes and you have to go through everything again to rework it. And try and decide what to do with open trades or to open new trades etc...

With time you'll find yourself honing in on the stuff that makes portfolio's work...

[Dr. Zogg]

I'm sorry my responses are so slow, but I'm at sea, on a SAT diving vessel working on a new pipeline in the Gulf of Mexico. The shifts are long and tedious, and normally I'm bushed when done, so time is a bit scarce...