Grand Master Advisor
Pairs trading, unlike trading according to an ordinary strategy on a specific currency pair, requires the trader to competently select two assets that show a pattern in price movement.
Thus, almost any strategy for pairs trading involves searching for a high direct or reverse correlations between currency pairs. With the correct construction of orders, due to correlation on different assets, there is a maximum reduction in risks and the use of hedging.
Unlike simple trading tactics, when trading paired strategies, profit is derived not only from correct speculation in a certain direction, but also from the accrual of a swap.
Thus, it is pair trading that combines the possibility of maximizing profit with minimal risks, and each trader, while holding a bunch of neutral positions, can earn at least a bank percentage, and this does not take into account winning transactions.
The Grand Master Advisor is a combination of two independent trading advisors that work on the basis of correlation and pair trading on Forex. Advisors can be used on almost any time frame, since it is based on a mathematical calculation with elements of averaging and hedging, so the expert will work the same on all time frames.
Installing the Grand Master advisor
Before you begin installing experts in your trading terminal, you must go to the end of the article and download the archive, which contains two different robots. After downloading and unzipping the archives, you will have access to the data directory of your terminal. To do this, launch the file menu in the open trading terminal and select “Data Catalog” in the list of options that appears.The system folders of the trading terminal will be displayed in front of you, so be sure to find a folder with the name expert among them and drop both advisors into it. After you have dropped the experts, close the data catalog and go directly to the trading terminal. In the running platform, we find the navigator panel and make updates by calling an additional menu in the “Advisers” section.
Having updated the platform, the advisors will be displayed in the corresponding section, and in order to start trading, drag the robot with the appropriate name onto the same currency pair:
Robot strategy. Settings
The basis of the two experts is the famous Grand Master strategy, which was first published in 2013. The strategy is based on the inverse correlation of two currency pairs AUDUSD and EURAUD. There has been a global trend in these two instruments for more than 10 years, namely an upward trend for AUDUSD and a downward trend for EURAUD.
If you compare two charts and observe the movement of these two Forex currency pairs, you can see that at the moment when AUDUSD is growing, then EURAUD is falling at that moment and vice versa. Naturally, the correlation between instruments cannot be 100 percent, so martingale is used to make a profit. So, according to the rules of the strategy, it is necessary to simultaneously open a buy order for the AUDUSD currency pair and a sell order for the EURAUD currency pair in the same lot.
Thus it happens hedging in pairs trading. A stop is not set according to the strategy, but if the price goes against you, you should average at a distance of 120 points from the position opening point. Averaging occurs with the same lot. The profit for both positions is 20 points. If the price closes at profit, you open the position again. It is worth noting that you will be charged a positive swap for both positions.
Both experts have completely identical settings, the only thing is that one will only buy the AUDUSD currency pair, and the second will sell EURAUD. In the Lots line, you must specify the lot to the expert. So, according to the strategy, a lot is calculated from a simple formula, namely 0.01 lot per 1000 units of deposit.
In the Distance Ord line you can change the distance in points between the averaging grid orders, and in the QtyOrders line you can limit the number of averaging grid orders. In the TakeProfit line you can set the profit level in points for each trade, and in the StopLoss line you can limit the loss in points (under the stop order strategy, a stop order is not applied).
Testing the Grand Master strategy
In order to draw objective conclusions about the performance of the Forex strategy, we must conduct separate testing on the AUDUSD and EURAUD currency pair. So, the testing period in the strategy tester is 2015. The result was tested on the EURAUD currency pair:
Testing the AUD/USD currency pair:
As you can see, despite the fact that the strategy has been running for more than three years, it shows quite good profitability. It is worth noting that the tester does not display swap charges for each currency pair, so you can safely add at least 10 percent of the deposit for each test.
Download Grand Master Advisor