system4 Diskussion

On jan 04 and Jan 05 i had some cash transactions on the systems, as an API fee paymet was delayed so i had to move money out of the systems to pay the API bill, then move the money into the systems when the money arrived from the wire transfer. I used the situation to rebalance a little as #2 and #3 were wiped out more or less in the recent usd rally.

#2 nothing withdrawn, approx 214 eur put in
#3 nothing withdrawn, approx 154 eur put in
#4 100 eur withdrawn, approx 154 eur put in
#5 200 eur withdrawn, approx 154 eur put in
#6 100 eur withdrawn, approx 154 eur put in
#7 200 eur withdrawn, approx 154 eur put in
#8 160+65 usd withdrawn, nothing put in

Dennis, I see you're trading several systems which are actually one?

In overall, are these profitable in the long term? Or is it just some kind of a grid system where the balance grows while the equity stays put?

They are designed to be profitable as long as the doller falls in a relatively orderly manner. The more orderly, the more of the systems will make money. The less orderly the more systems will be wiped out due to too high leverage. The total value of all accounts have been above 27K euro, but is now 10K due to the recent dollar rally. I have not calculated the total amount of money i have put into the systems to begin with.
total p&l, realized and unrealized p&l is :

acct0 -1108 -1108 , 0 (usd)

acct1 -1313 -1313 , 0
acct2 -955 - 959 , +4
acct3 -617 - 513 , -104
acct4 +1340 +2153 -813
acct5 +617 +1708 -1091
acct6 +46 + 661 -615
acct7 +1313 + 398 +815
acct8 +2784 +1037 +1747

the losses on acct0 was achieved using a manual version of this system during another usd rally.

acct1 has been discontinued, i got tired of loosing money - usd is too volatile for the very high leverage i used there.

each account have been funded with approximately the same amount of money - i don't have the details here, but i would estimate not more than usd 1000 each, over some time. Thus the accounts with p&l over 1000 are above 100% gain inside of a year. acct1 have been funded with more, as it was the first euro acct. i played with. acct1 have so many transactions that oanda cannot export data successfully to myfxbook.

above numbers partially from memory so could be wrong, even by a large factor - but all is open here for anyone to check, if they bother looking through thousands of transactions ;-). What is not entirely clear is mostly deposits and withdrawals. The P&l numbers i took off from oanda while i wrote the msg.

To answer Your question : no. the systems are not at all profitable over the long term. They are simply an automated and rather optimized way to benefit if the usd should fall against gold and silver, and /or major curreencies and/or all currencies (except gbp and a very few select other ones i think are worse off than usd)

My biggest problem will be when to stop. NAV was more than 27K euros sometime december, but then usd rallied back and took NAV all the way down to 7000 euros in no time. now i am almost at 10K, have been almost at 12K today (volatile day) The system looses money qucikly when usd rises, so i'll have to ride the usd down and get out before a largish correction. I am not sure i will succeed at this.

You could probably achieve a similar performance profile using options, but it would demand a far larger account to keep things balanced. I utilize oanda's $1 minimum position size very heavily to try to make currencies offset each other and give me a smoother equity curve.

Right now total account value is 9999 and total position size is 202173 - I am heavily leveraged but seem to manage to survive much better than someone who was into fewer crosses and stuff.

This oanda acct. is a speculation account, i have most of my funds at another broker, doing more safe and sane investments.

If usd crashes to eur 2 or eur 3 a dollar, i will probably become as rich as soros did when he managed to pillage the UK central bank way back.

my view on the dollar is that it is very weak in a 3-5 years timeframe, but that it might momentarily rally hard due to either higher relative and/or real usd interest rates - or due to another panic that drives people to 'safe' money. However the underlying usd direction is down (due to way too much money having been issued), and the things mentioned here are sort of competing and balancing, trying to figure where to take the usd next. I believe usd will follow most other fiat currencies into oblivion sonner than later, until or unless some economically responsible politicans gets elected in the us. An economically responsible politican would probably ditch the usd and start over with a new currency - probably tied to comodities or metals or both, creating a oneday usd crash or devaluation. such a scenario would not make me as much money as a gradual decline.

Both equity and balance should grow exponentially as the usd falls, at a rate that starts out around double every 5%, and then accellerate towards double every 2 to 3%, as the trend gets longer (due to higher levered systems kicking in at some point). I don't know if we'll get such a nice usd trend, but if we do, my systems will ride it.


In case you are wondering what my positions in my sane and not so agressive account is :

long silver
short sp500
short us 30yr debt

waiting for oil to revisit 40s when sp500 have crashed, then i'll stop shorting sp500 and start longing oil
will stop shorting us 30yr debt when i feel rates can't go much higher, and that us debt does not seem to have an increasing trend reg. probabillity of a default situation.

account value as of 8 jan 2010 23:18 CET 1507 eur

forgot to mention that net deposits for the week was 6.8 euros

account value as of 16 jan 2010 15:39 CET 1490 eur

account value as of 24 jan 2010 17:22 CET 730 eur

Account value as of 31 jan 2010 18:52 CET 411 eur

Account value as of 6 feb 2010 20:51 CET 258 eur

Account value s of 14 feb 2010 20:09 CET 297 eur

Account value as of 21 feb 2010 19:16 CET 330 EUR

Account value as of 26 feb 2010 23:33 CET is EUR 286. 86 usd = 63 EUR were taken out fo the account to pay for the API

Account value as of 5 mar 2010 23:59 CET is EUR 263 80 euros was taken from the system during the week to fund some personal expenditures, so in fact a gain of 67 euros for the week.

Account value as of 18 mar 2010 13:46 CET is EUR 252 , note that EUR 300 was withdrawn since last update, so almost 300 euros profit since mar 5.

was beginning to wonder when will it happen and yup all was nice till that new set got a bump?