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Investment amount: € 5,000
Strategy:
AI Robo X1
AI Robo X2
Martingales
Profitability: # 3492748
83.56%
Extended version
Your profitability for 12 months:
+ 4178, - €
3 solid investment strategies
Create your own portfolio with our three different strategies, each implemented in its own algorithm.
CB Robo X3
Gold + 4 indices
DAX, S & P500, DOW JONES, NASDAQ, XAUUSD
3 algorithms
100% algo trading
Min. Deposit $ 1,000
Annual return 55%
Drawdown 25%
small risk
CB Robo X1
15 currency pairs
AUDUSD, NZDJPY, EURGBP, USDCAD, EURCHF, ...
2 algorithms
100% algo trading
Min. Deposit $ 1,000
Annual return 60%
Drawdown 35%
low risk
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* The information provided does not constitute investment advice or a recommendation and is not an offer or advertising to buy or sell
Financial instruments. In particular, this information is not a substitute for suitable investor and product-related advice. We are not a broker or a bank. The annual return and the DrawDown are based on an estimate and can vary greatly depending on the market situation. Further information on the risks can be found here . The portfolio allocation is based on an approximate estimate and can vary greatly depending on the market situation. Any asset can reach 0% - 100%.
Strategy 1 - follow trend
Definition:
Trend-following or trend trading is a trading strategy whereby one should buy an asset when its price is trending up and sell when it is trending down, expecting price action to continue. There are a number of different techniques, calculations, and time frames that can be used to determine the general direction of the market in order to generate a trading signal (forex signals) including calculating the current market price, moving averages and channel breakouts. Traders using this strategy are not aiming to forecast or predict certain price levels; they just jump on the trend and ride it. Because of the different techniques and time frames used by trend followers to identify trends, trend followers as a group are not always strongly correlated with one another.
Trend following is used by forex and commodity trading advisors (CTAs) as the predominant strategy of technical traders. Research by Galen Burghardt has shown that between 2000-2009 there was a very high correlation (.97) between trend-following CTAs and the broader CTA index.
Trend following is an investment or trading strategy that seeks to take advantage of long, medium, or short term movements that appear to be emerging in different markets. Traders who employ a trend following strategy do not aim to predict or predict certain price levels; they just jump on the trend (if they think a trend has established itself with their own reasons or rules) and ride it around. These traders usually enter the market after the trend has "properly" established itself by betting that the trend will continue for a long time and for this reason they forego the initial turning point profit. A market "trend" is the tendency for a financial market price to move in a particular direction over time. If there is a turn against the trend, they get out and wait for the turn to establish itself as a trend in the opposite direction. In the event that their rules signal an exit, traders leave the market, but re-enter when the trend returns.
Cut off loss. They exit the market when the market turns against them to minimize losses and "let profits go" when the market trend goes as expected until the market exhausts and turns into a book profit.
This trading or "positive edge betting" method includes a risk management component that uses three elements: the number of stocks or futures held, the current market price, and current market volatility. An initial risk rule determines the position size at the time of entry. Exactly how much to buy or sell depends on the size of the trading account and the volatility of the issue. Price changes can result in a gradual decrease or increase in the initial trade. On the other hand, unfavorable price movements can lead to an exit from all trading.
In the words of Tom Basso, in the book "Trade Your Way to Financial Freedom," let's break down the term trend following into its component parts. The first part is "Trend". Every trader needs a trend to make money. If you think about it, whatever the technique, if there is no trend after you buy, then you will not be able to sell at higher prices ... "Following" is the next part of the term. We use this word because trend followers always wait for the trend to shift and then "follow" it.
The main reasons for market trends are a series of behavioral distortions that cause market participants to overreact:
Herd: After the markets have developed into a trend, some traders jump on the bandwagon, thus extending the herding effect and the trends.
Affirmation Bias: People tend to look for information that confirms their views and beliefs. This can lead investors to buy assets that they have made money on recently and sell assets that have declined so that the trends continue.
Risk Management: Some risk management models will sell in downward markets because, for example, some risk budgets have been breached, and buy in upward markets when new risk budgets are unleashed, causing trends to persist.
Strategy 2 - grid trading
Definition:
Grid trading is when orders are placed above and below a set price, creating a grid of orders at incrementally rising and falling prices. Grid trading is most commonly associated with the forex market. Overall, this technique attempts to capitalize on the normal price volatility of an investment by placing buy and sell orders above and below a pre-defined strike price at certain regular intervals.
For example, a forex trader could place buy orders every 15 pips above a set price while also placing sell orders every 15 pips below that price. This takes advantage of trends. He could also place buy orders below a set price and sell orders above that price. This takes advantage of range conditions.
Core elements
- In network trading, buy and sell orders are placed at set intervals at a set price.
- The grid can be created to take advantage of trends or ranges.
- To benefit from trends, place buy orders at intervals above the set price and sell orders below the set price.
- To take advantage of spreads, place buy orders at intervals below the set price and sell orders above the set price.
Network trading in general
One advantage of online trading is that it requires little predictions about market direction and can be easily automated. Big drawbacks, however, are the potential for big losses if stop-loss limits are not met, and the complexity involved in running and / or closing multiple positions on a large grid.
The idea behind the trending grid trade is that if the price moves in a sustainable direction, the position will grow in order to capitalize on it. When the price moves up, more buy orders are triggered, resulting in a larger position. The position becomes larger and more profitable the further the price moves in that direction.
However, this creates a dilemma. Ultimately, it is up to the trader to determine when to shut down the net, end the deals, and realize the profits. Otherwise the price could reverse and those gains will disappear. While losses are controlled by the sell orders, which are also equidistant from each other, the position could have turned from profitable to loss of money by the time those orders are reached.
For this reason, dealers usually limit their network to a certain number of orders, e.g. five. For example, they place five orders to buy above a set price. When the price goes through all the buy orders, they exit the trade with a profit. This can be done all at once or through a sales grid starting from a target level.
If the price action is choppy, it could trigger buy orders above the set price and sell orders below the set price, which could result in a loss. At this point, the trend-grid starts to falter. Ultimately, the strategy is most profitable when the price is moving in a sustainable direction. The price fluctuating back and forth usually doesn't produce good results.
In oscillating or fluctuating markets, counter-trend net trading tends to be more effective. For example, the dealer places buy orders at regular intervals below a set price and sell orders at regular intervals above the set price. When the price falls, the trader goes long. When the price goes up, the sell orders are triggered to reduce the long position and possibly go short. The trader profits as long as the price fluctuates sideways and triggers both sell orders and sell orders.
With the counter-trend grid, the risk must be controlled. The trader could end up building a larger and larger losing position if the price continues to move in one direction instead of moving in the predetermined direction. Ultimately, the trader has to set a stop-loss level, as he cannot hold a losing position indefinitely (let alone increase it).
The grid trading strategy is also an extension of the Stoikov strategy. In this case, a market maker places limit orders throughout the book, of increasing size, around a moving average of the price, and then leaves them there. The idea behind this is that the price "iterates" the orders during the day, thus earning the spreads between purchases and sales.
When the order sizes get bigger with the spreads, this strategy has the martingale effect - it effectively doubles when the prices differ from the average price. Unlike Stoikov, since the orders are further apart, they are executed less often, but the spreads (and therefore the profits) are larger.
Calculation formulas that are used in the grid strategy.
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A moving average of prices
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A moving average of prices + a step function (a function
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which resets the average after a sudden increase)
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The current best bid / offer price, which is reset periodically
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becomes (according to the high frequency algorithm)
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View prices on other exchanges / related instruments
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(sometimes referred to as statistical arbitrage)
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Strategy 3 - Triangular Arbitrage
Definition:
Arbitrage trading is an opportunity in financial markets when similar assets can be bought and sold simultaneously at different prices for profit. Put simply, an arbitrageur buys cheaper assets while selling more expensive assets to make a profit with no net cash flow. In theory, the practice of arbitrage should not require capital and involve no risk. In practice, however, arbitrage attempts generally involve both capital and risk.
According to the efficient markets hypothesis, there should be no opportunity for arbitrage because under normal trading conditions and with normal market communication across the markets, prices move towards an equilibrium level. In practice, however, conditions for arbitrage arise due to market inefficiencies. In these cases, currencies may be mispriced due to asymmetrical information or delays in price quotation among market participants.
In the foreign exchange markets, the most straightforward form of arbitrage is two-currency arbitrage, or "two-point arbitrage". This type of arbitrage can be performed when prices have a negative spread, a condition when one seller's ask price is lower than another buyer's bid price. In essence, the trader starts trading with a profit. This circumstance is rare in the currency markets but can occur occasionally, especially when there is high volatility or low liquidity.
What is Triangle Arbitrage?
Triangle arbitrage (also known as three-point arbitrage or cross-currency arbitrage) is a variant of the negative spread strategy that can offer improved odds. It involves trading three or more different currencies, increasing the likelihood that market inefficiencies will create opportunities for profit. In this strategy, traders will look for situations where a particular currency is overvalued compared to one currency but undervalued compared to the other currency.
Researchers have found that during trading hours, triangular arbitrage opportunities arise up to 6% of the time. A commonly traded trio of arbitrage currencies is EUR / USD, USD / GBP, and EUR / GBP. However, any three or more actively traded pairs can be used.
The process of completing a triangle arbitrage strategy with three currencies involves several steps:
1. Identify a triangular arbitrage opportunity with three currency pairs,
2. Identify the cross rate and the implicit cross rate
3. If there is a difference in the rates from step 2, then trade the base currency for a second currency
4. Then exchange the second currency for a third. At this point the trader is able to make a risk-free profit due to the imbalance in prices between the three pairs,
5. Convert the third currency back to the original currency to make a profit.
To identify an arbitrage opportunity, traders can use the following basic cross-currency value equation:
A / B x B / C x C / A = 1, where A is the base currency and B and C are the two counter currencies to be used in arbitrage trading. If the equation is not equal to one, then there may be an arbitrage deal opportunity.
As an example of a trade, we can consider the rates of the following currency pairs: EUR / USD 1.1325, EUR / GBP 0.7805, GBP / USD 1.4528.
In the first step, the merchant buys € 10,000 at 1.1325 to receive the equivalent of US $ 11,325. In the second part of the trade, the trader sells € 10,000 at 0.7805 for the equivalent of £ 7,805. Eventually, the trader uses the British pound to buy dollars at a rate of 1.4528, making a return of $ 11,339.
If you subtract the amount resulting from the initial trade from the final amount (US $ 11,339 - US $ 11,325), the result is a positive difference of US $ 14 per trade.
As with any other trade, however, arbitrage attempts can be risky. This includes the execution risk if the quoted amount cannot be met by a broker. For example, in the above trade, if the euro had risen to 0.7795 against the pound sterling before the trader set a price, the action would be a loss (US $ 11,324.58 - US $ 11,335) of approximately US 10.42 Generate $ per trade.
Summary
Arbitrage opportunities are profitable opportunities that arise from time to time. Indeed, economists consider arbitrage to be a key element in maintaining the fluidity of market conditions as arbitrageurs help balance prices in the markets. "According to the law of unit price - a foundation of modern finance - arbitrage activity should ensure that the prices of identical assets converge so that there are no unlimited risk-free profits," stated economist Paolo Pasquariello in a study of turmoil in the financial markets.
Using triangular arbitrage can be an efficient way to take profits when market conditions allow, and including it in your strategy book can increase the odds of winning. However, traders need to be aware that the competition inherent in the Forex market tends to correct price differences very quickly as they arise. As a result, such opportunities can arise very quickly - even within seconds or milliseconds. Because of this, anyone interested in an arbitrage strategy needs to have a system in place that will closely monitor the market for extended periods of time in order to potentially take advantage of such opportunities before prices move to find equilibrium.
Assets that are traded with our algorithms
DAX German share index
Definition:
The DAX is the most important German share index. It currently measures the performance of the 30 largest stock corporations on the German stock market that are admitted to regional stock exchanges. The DAX is Germany's most popular index. The companies included in the calculation should be admitted to the variable market segment of official trading on the Frankfurt Stock Exchange for at least three years.
It was developed by the Frankfurt Stock Exchange as an index for tradable stocks in preparation for the German Derivatives Exchange - now Eurex - and introduced in 1988. The DAX represents more than 60% of the share capital of listed national companies and is based on the Laspeyres formula. The DAX shows the performance of a portfolio, hence the success of the investment. It provides the statistical measure for the overall price development on the German stock exchange.
The DAX comprises the 30 best-selling German stocks and thus makes up more than 60% of the share capital of nationally listed companies. Measured in terms of share turnover, trading in these shares accounts for 75 percent of German equity transactions. The composite DAX, the DAX 100 with the top 100 German stock corporations and the MDAX as an index for medium-sized companies are calculated using the same method. The most important German stocks, mostly well-known and traditional groups with billions in sales, form the basis for the calculation of the DAX index, the German stock index. The 30 largest stocks, based on the market turnover rate and the market capitalization of the so-called official trading standard stocks, the highest quality German stocks, also called blue chips, are summarized here.
The reason for this is the different share capital and the resulting different number of outstanding shares. The percentage weighting of the index companies in the DAX corresponds to the size of the company concerned. Large companies therefore determine the level of the index more than small ones. The weighting scheme is adjusted quarterly by Deutsche Börse for all indices. The latter would then fall out of the index. The basis for the composition of the share indices is the ranking list of Deutsche Börse. Market rotation and market capitalization criteria as well as the publication of quarterly reports form the basis for the selection of companies in the indices.
Invest in DAX ETFs
Like any stock index, the DAX cannot be bought and sold directly like a stock. Instead, the DAX is traded with ETFs or CFDs. The main exchange for DAX EFTs is Eurex, which offers trading in DAX futures. Investors can use these various trading instruments to bet on rising or falling prices. With leverage products, only a fraction of the capital required is needed to achieve a greater market return. CFD trading, meanwhile, lets you invest long or short in the market, which allows you to generate positive returns on both falling and rising prices.
Companies in the DAX index
NASDAQ index
Definition:
The NYSE 100 Index is the name of one of the most recognized US stock indexes, whose portfolio corresponds to most of the New York stock market. The index contains 100 listed stocks that are weighted according to the market value of individual stocks. For futures on the NYSE 100 Index, the contract is listed as an index. The value of the contract is obtained by multiplying the current index by a factor of 500. The smallest possible change in the index, which is reflected in the change in the price of the futures contract, is 0.05 index points = 25 USD. It is issued by the New York Stock Exchange, which is the exchange with the highest turnover figures, making it the largest trading exchange in the world, especially for international stocks. It was founded in 1792 and is often figuratively called Wall Street because of its location. Her symbols are a bear and a bull.
The index level is determined on the basis of the share price and is only adjusted for subscription income and special payments. The weight of the index is based on the market capitalization of listed companies. Corporate actions such as a stock split have no impact on the index. The calculations are updated every second during NASDAQ business hours from 9:30 a.m. to 4:00 p.m. local time. The investment universe includes all companies listed on NASDAQ. To create a shortlist, companies in the investment universe are sorted by market capitalization in descending order. Likewise, an average of 200,000 shares in a company have to be traded every day. The index weight of the index elements may not exceed 24.0 percent. The composition is usually determined once a year; The proportion of listed companies is reviewed four times a year
Invest in NASDAQ ETFs
Like any stock index, the NASDAQ cannot be bought and sold directly like a stock. Instead, the NASDAQ is traded with ETFs or CFDs. The main exchange for NASDAQ EFTs is the NYSE, which offers trading in NASDAQ futures. Investors can use these various trading instruments to bet on rising or falling prices. With leverage products, only a fraction of the capital required is needed to achieve a greater market return. CFD trading, meanwhile, lets you invest long or short in the market, which allows you to generate positive returns on both falling and rising prices.
The most important companies involved:
