Trading for Z1 or Z2 (for example) - choose capital to invest

Hi!

Like the topic says. If I want to start trading Z1 or Z2, is there a way for me to choose how much to invest? Or do I just have to follow the "capital required" that zorro prints out?

If I'm able to choose it, how can this be implemented in my own trading strategy that I programme?

MS

What you do is you adjust the Margin slider until you get a capital required that you are comfortable with. Remember that Capital Required is the total largest drawdown in the past including open interest and margin. This is the amount that you should expect to drawdown again as some point, and statistically to eventually drawdown more.

Generally speaking, traders tend to set a maximum amount they are willing to lose before they stop trading. You should set the Margin slider so that this is the Capital Required. To put it into an orthodox perspective, a common drawdown a trader is willing to risk is 20% of their account. At this point they will stop and reassess. Suppose the flashy yearly return in Zorro is 200%. Then the actual return on the entire account is 40%. For example, suppose you will risk 20% of your $100 account and you will make 200% of what you risk, which is 200% of $20 = $40. Then you actual return is 40%, that is $40, not $200.

Of course, if you want to risk 100% of $20, or 100% of $100, for example, go for it. Of course, the real numbers are in the low thousands as a minimum.

Just think about this and consider what your risk tolerance is.

This topic was discussed at length sometime in the last 12 months. Generally there was a few of us that were frustrated because out accounts were going down when the Zs equity profile charts were going up. There is no proof or transparency of real results, just hearsay.

If you have not already purchased zorro, I suggest you just subscribe to the systems you want to try. You can buy it out of your profits at a later date. Paying $500 up front is a huge risk. If on the other hand you are a programmer and a trader already and you want to mechanise a system you know works then go ahead and buy the full version.

If you are not a successful trader already, then I suggest you walk away. This is a great piece of software, but it is not for beginners, not for passive investors and not for discretionary traders.

Hi DMB!

Thanks for your input, really!

I've been doing some programming credits in school, but that's just really the basic stuff to be honest. I've also done some discretionary trading myself, and I've been interested in the financial market the last couple of years.

I'm in the process of programming my own stratgies, but still in the testing/training phase though. How about you?



Can't I use the free version as a start if I want to test some of my strategies? Or do you recommend buying Zorro S when going live?



Why do you recommend me to walk away? Do you mean that Zorro is so advanced that it's not even worth it to give it a try, as a 'noob'?


EDIT: Fixing quotes..

Hi guys,

Sorry to hear about your frustrations DMB. I agree that zorro can be frustrating to work with at times, and yes you cannot have the mindset of being passive with it. From running the 3 z systems since March I have cut Z5 alltogether as it has only lost money, and I have increased margin on Z12 to twice that of Z3, since Z3 generally takes all the same trades as Z12 and you can quickly find yourself well overweight gold and silver to a scary amount.

Having said all this my account is up 270% profit since March. I strongly believe picking the right broker is half the battle, since there are so many dodgy brokers out there, and the default broker for Zorro -FXCM have possibly the worst spreads in the world.

Lastly, I think the whole idea of zorro is for you to create your own systems. Zorro is a below average execution system(no offense). It is slow and clunky and freezes constantly for me. It's power is in testing and training systems. As long as you understand what it is that you are working with, I suggest you dive in.

These are just my opinions. And I hope the zorro guys don't take offense at anything I have written here. I love your software.

Thanks.

Hi,



Which broker do you recommend? Is it difficult to program zorro to trade with other brokers?


Another question. I 'only' have the free version of Zorro as we speak. Let's say that I have 3-4 strategies that I've programmed and want to try live. Is this doable with the free version, or what's the benefit of buying Zorro S in this specific situation?

Hi Mothership.

I am using IC Markets, due to their very low spreads on the ECN account. I am biased to Australian brokers though, as I live in Australia and there are pretty good laws here for protecting your cash. Downside to these guys is their swaps are pretty bad, but I think this is the same for most Aussie brokers, and also they do not pay interest on the cash you keep with them. Other than they are awesome.

In choosing a broker I looked at http://www.myfxbook.com/forex-broker-swaps and http://www.fxblue.com/spread/symbol.aspx to compare swaps and spreads. Make sure you factor in and understand which brokers charge brokerage on top of a spread, and how to convert it so that you can compare like for like. I also read heaps of forums for all the complaints that people have with each broker.

I am using MT4, which requires a fair amount of messing around until everything is in place. IC markets requires a certain amount of volume before they will let you connect with API, and then you need to write the API as well. I suggest API connection is quite valuable, and I would not use a broker that does not have that capability...as at some point I think I will switch to API connection, however there seems to be lots of work in writing an API. Read the brokers section for heaps more discussion on brokers.

Hope this helps.

Hi Mothership,

you can use the free version as long as you don't hit the trading restrictions as mentioned in the manual http://zorro-trader.com/manual/en/restrictions.htm

I personally trade my own scripts - one running on a free amazon vps - on a fxcm demo account. You could do that live(with real money) with the free version also, but i recommend trying on a demo account first:)
I see the whole thing as a hobby - and don't intend to go live until i managed to step into every possible trap there is:p

Ah yes, if you have 3-4 strategies, you need 3-4 vps's to run with the free version - or you combine them into one or two strategies, or, you buy Zorro S.

Hi,

Thanks for replying! It sure helps. But I have no clue how to programme it with Zorro, if I want another broker that is.

But that's another issue.

Thank you too 3D.

Generally, What's your most useful advice when programming trading strategies (especially, for a noob like me)?

Have a nice weekend!

@Thirstywolf - Glad to hear you account is up 270% since March. That is about 6 months. You are the only person I have come across who has made money over such a period of time. But I haven't been active in the forum for about five months.

@Mothership - The software is great and not two hard to use if you have an aptitude for programing. System development is bloody hard. Especially if you are not already trading profitably.

There was a fellow posting on this forum who did a lot of work to systematically create code that allowed him to then systematically test as many ideas that he could find or come up with. I think it was swingtraderkk. I followed his posts for months and last I remember he gave up. He had some plausible stuff, but I vaguely recall that he didn't exactly uncap an oil well.

In my opinion, he was doing it backwards, which is exactly the way I was also doing it for years and years. I reckon you have to start with something that works for you, that you understand and that you have already traded for many many trades / hours. With the knowledge of the nuances of the market and the system, you can then go about trying to mechanise your trading process. Trying to take an idea and see if it can be programmed is difficult to do. I don't really want to try to explain it any better because really I am not any good at trading. I just know what I have tried and what doesn't work for me. You can read books like the ones jcl suggests and Charles Le Beaus book on system development.

By all means, program with the free version. If you do get something that works, then run it on a demo account for a couple months, until it has seen some different market types and at least a hundred trades. Then if you are really convinced, then buy the software and go live.

And for Zs, subscribe rather than buy. If you make money, then use that money to buy it. It may end up costing you a hundred dollars more. But if they don't work for you, like they haven't for most of us (unless you were in Z5 three years ago), then it has only cost you $100, not $500.

If you are young and you really want a career in trading, go join a prop firm. Read One Good Trade. Then after a few years of trading successfully there, turn your working trading plan into an automated robot.

Hi Thirstywolf.

Congratulations! 270% Profit over 5 months is impressive, to say the least... For sure we'd all like an account almost 4x what we had back in March!

Are you running your own strategies on the account as well? Or just Z12 & Z3? What leverage are you using? Have you stuck with the Margin/Risk settings that gave the CR you started with? Or have you "pushed the envelope"?

Sorry for all the questions... Basically wondering if you'd be willing to help the rest of us running Z12/Z3 achieve similar results? Possibly by sharing your trades.csv file(s)? Perhaps via jcl if you don't want to post them publicly?

Thanks.

Hi DdlV

I'm happy to provide anything you think will be useful. I've included a zip file with two spreadsheets. One has all trades through MT4, which is harder to differentiate strategy. The other is the trades file from zorro, but seems to only go back to May, but guess it covers the bulk of trades.

After my 2nd deposit, which was fairly quick, I turned the margin up to be a bit aggressive, using $100 margin for each strategy with about 9-10k account balance. I stopped Z5 about 2 weeks ago, and think I scaled back Z3 to $75 around the same time. Only increased Z12 in last couple of days to $150.

I have not changed any other settings in the account. Have had a few instances where I have had to manually close out all my trades when Zorro has failed to resume trades, but mostly earlier on.

Let me know if there are any other specific files that you would have helpful or anything else.

Thanks Thirstywolf!

Let me say what I think I read/see, & you can correct where I go astray.

Zorro's Test facility allows determination of the maximum Margin setting at which it's "safe" to run a strategy with the given Capital. (There are other threads that try to talk about what exactly "safe" means... )

You're setting Margin higher than this "safe" value. This can give increased returns (as you've experienced! ) when the market goes the right way, but with higher risk. If the market went the other way, the increased Margin = more risk than the account can handle = margin call.

I gather that you're managing that increased risk by watching Zorro very closely, and intending to exit earlier than Zorro would if things go too bad too fast?

Or do you feel that the risk is overstated and it's OK to be aggressive with the Margin slider?

How are you determining what Margin values to use?

Thanks!

I used more aggressive margin settings initially, but I would say overall I have used much lower margin than most users, simply because I had not increased my margin in a long time, while my account was accumulating profit. So I don't think margin is the key for anyone, unless they are far too aggressively margined.

Thanks again Thirstywolf!

I'm still struggling to understand, so please bear with me...

Re. Margin, how are you choosing the value(s) to use? Using Zorro's Test? Some other calculation/heuristic? Or simply "gut feel"?

Re. the key, if it's not Margin, I assume you mean the choice of broker as mentioned above? From the closed trades, IC Markets takes 21% of your profit - is that way lower than other brokers you've experienced? Or are they better for other reasons?

Thanks.

I am using the method suggested by the manual, more or less, or at least that is my primary reference, except I am not very active in updating it.

I don't know what the "key" is. If I were trying to figure it out, I would compare my trades with the trades from an underporfming account to see if there are any discrepancies. I would try to understand those first. From comparing trades I am assuming any major differences in terms of brokerage, slippage, spreads, swaps etc will come to light in reviewing the trades.

Thanks Thirstywolf!

Actually, I'm trying to look at it from the Zorro perspective as I understand it: Statistics-based and Tested results to show that a strategy and the settings one uses to drive it will not only perform well in good-fortune market times, but also survive in bad-fortune markets. From this perspective focusing on comparing a list of trades from a relatively short so-so to good time isn't particularly useful and may in fact be disastrously misleading.

The files that you uploaded are obviously very concrete, but the what's and why's of how you got to those results are quite nebulous. That's OK! I don't expect you to reveal all your secrets. But that leaves too big a gap to determine how you're opening up the throttle while managing to keep risk in check...

So, I'll just congratulate you again on your good fortune (and $10k out!) and wish you the luck that it continues!

Thanks.

Didnt know where to put this really. But, for fun, im recommending you to watch the 2 episodes of traders millions by the minute, on youtube.

Yea, watched this on Zerohedge today. Not bad.