ArbitrageStatistic Hedge

trading Strategy

One of the strategies used by successful traders - trade in pairs (pair trading). At the time this
strategy has been the prerogative of only large hedge funds, mutual funds, brokers dealing centers and banks. Today, many
traders and investors use in their arsenal pair trading.

Trading pairs - one of the many varieties
arbitration. The way in which trades the expert falls under the category of statistical arbitrage. The essence of the strategy
It is to find the extreme deviations in the behavior of the two instruments with high correlation. Wherein
supported by overall neutral position on the market.

I think that many will be surprised to learn that the famous
investors and traders tend to make their state is not a simple investment in their chosen instruments,
as it is often presented in books and magazines, and through integrated hedzhingovye strategies to
minimize risk. Expressive waving his arms traders in the CME (Chicago Mercantile Exchange), trading
futures contracts - the majority of a link in a well thought out scheme hedzhingovoy: sell basket
shares (cash), simultaneously buying contracts (futures), or, conversely, to sell features, at the same time buying
shares.

Pair trading has its own peculiarities. Thus, for example, adding to the
the position at which the lost money, is often an example of undisciplined trade. In pairs trading,
on the contrary, such a move may be part of a working strategy, as spread, by its very nature, tends to
fall back from its peak is much more likely than a single stock. Naturally, as in
any other strategy, money management and risk control is the key to success.

There are whole hedge funds, which are only
this pair trading and engaged, while remaining market-neutral.
Expert analyzes the average difference between the two courses and tools for a certain convergence / divergence takes
both short and long positions. Profit is derived from the relative change in the price of these instruments.
Because relative prices are more stable than the absolute price. The most significant characteristic of these
positions - that's what the absolute price changes are not significant. Gain offset on one side
losses on the other. Only if the prices of the two contracts will change relative to each other, or will profit
lesion.

Expert reveals overlapping (hedging) position not to infinity (adjustable parameter
ePositiveClosing). When the amount of open positions are profitable (eTakeProfit option + spread) Advisor
simultaneously closes all open trades. message appears on the expert 5 languages ​​(EN-English, RU-Russian,
DE-German, FR-French, ES-Spanish). Parameters (eTakeProfit, eMean, eFirstR, eFirstS, eOthers, eOrderBroken) indicated for the 4-digit quotes. If the expert is working on a pair that has 3 or 5-digit quotes, it is multiplied by 10 their own.

Input parameters

• Language of messages displayed (EN, RU, DE, FR, ES) - language display messages (English, Russian, German, French, Spanish;


• Automatic calculation of average (true-auto, false-manual) - automatic calculation of average (true - automatic, false - manual);


• Period for average calculation in hours - pa what period (in hours) to calculate the average (if the previous parameter = true);


• Initial lot - Initial Offer;


• Factor to increase / decrease lot of ally instrument - enlargement / reduction ratio Lot ally tool;


• Magic - Magick;


• Ally currency - Currency ally;


• Profit in points - Profit in points;


• Manual average - Hand medium (if the parameter Automatic calculation of average = false);


• Number of points for opening first divergence deal - the number of points to open the first deal of the difference;


• Number of points for opening first convergence deal - the number of points to open the first transaction on the toe;


• Number of points for opening after the first deal - the number of points to open after the first;


• Lot increasing factor - magnification lot;


• Deal after which lots start to increase - Transaction after which the increase in the lots begins;


• Mode (0 - last average, 1 - calculated average) - Method (0-last average, the calculated average 1);


• Number of points to close deal without pair - the number of items which are closed after single transaction;


• Calculate average if there were no trades for (days) - calculation of the average if it was not opening deals within eCountDay days, 0 - do not count


• Pair after which positions are closed - how couples deal closes force;


• Check margin before making a series of deals - to check whether the money is enough for the opening of a series of transactions (at the expert initialization)


• Time for the timer to trigger - after how many seconds the timer expires;


• Slippage - slip value;


• Show log -show log (1-Yes, 0 - No).

Important

Parameter Factor to increase / decrease lot of ally instrument is used, if the selected tool tick value is different. For example, for gold and silver
teak value differs by five times. Accordingly, the parameter Factor to increase / decrease lot of ally need to specify a value of 0.2 if the expert run on gold (silver on the lot will be 5
times less). If the tick value equal, for example, for EURUSD and GBPUSD, then this value is set = 1.

Councilor test results

Testing for EURUSD + GBPUSD in the "Every tick".
At an initial deposit of $ 10,000 ArbitrageStatistic (Hedge) earned $ 21,834.04 on EURUSD + GBPUSD for the period from 1 January
2012 to December 1, 2012.
You can get similar information by downloading the demo version of the expert and test it.
Advisor has flexible settings that allow everyone to make it fit your style of work. You can also
optimize virtually all parameters in the strategy tester.
A good solution for those who want to train experts for little money.