For the last 5 months I have used an automated program to trade currencies.
This is something I designed and built myself as other similar packages cost $6,000 to set up and cost $600 a month to rent.
Mine cost $95 to set up and $0 a month to rent
This is NOT a technical analysis "black box" or any system that tries to 'predict' the market. My system simply buys and sells very small amounts of currency very often for a very small profit. Its like a giant vacuum cleaner sucking up 5c pieces once a minute 24/7!!
Anyways, this setup makes me around $30 a day, or $160 a week. Doing this requires around $6,000 capital. Here is the issue. The computer must be running 24/7. At 30c an hour, this really adds up.
Currently it costs around $40 a week in electricity. Also, the hard drives tend to wear out fairly fast, and Im now on #3.
So, although my $160 a week sounds good, its not an efficient system. I really need to increase the profit, either by optimising the buying/selling, or adding more capital.
Is anyone here a maths expert? I have some mind-bending calculations.........
Is it better to limit buy 1 pip below market and sell 1 pip above buy price?
Is it better to limit buy 10 pips below market and sell 10 pips above buy price?
using the 1 pip system, there are a lot more trades, but the profit they produce is very small. In a downtrend it is easier to sell on a 1 pip bounce.
Likewise in an uptrend, there are plenty of pullbacks allowing you to buy.
using the 10 pip system, there are far less trades, but each trade makes a good profit. You dont get too many 10 pip bounces in a downtrend, so you can end up owning a LOT of currency. In an uptrend, there is rarely a 10 pip pullback so you often miss the rise completely.
Can anyone determine a formula / logic to optimise this system?