What's new in Z5 1.26?

Hi,

I have updated to 1.26 about a week ago. The new z5 worked fine for some days but suddenly it opened a huge long position with a very close stop. And today it lost a lot of money with that positon. The situation is similar to what can be seen here: http://www.zulutrade.com/trader/166398 (date open: 2014-10-10 12:01:08) but in my case it was 11x bigger amount than the typical trade. (116K where the typical trade was 9-11K before this).

I bought the concept of grid trading EUR/CHF as a relative safe way of doing forex. Now I cannot find any info about the new strategy component but I think that opening huge positions with close stop is not part of classical grid trading!

Hi molloy. Please see this thread: http://www.opserver.de/ubb7/ubbthreads.php?ubb=showflat&Number=443932#Post443932

While it doesn't detail the exact changes made, it explains the rationale for the change.

HTH.

I face similar strange trades. Normally my Z5 (50/3500) operates with 1-10 lots but there are 3 trades since switching to Z5_1.26 with 60 Lots. Is this intentionally?

Just the way I think. I asked already for information about the new component in another thread in here and got more or better less directly the answer, that it won't be revealed. I am not interested in details, an info about the kind of algorithm would be totally sufficient. Especially if it explains those uncommon trades that happen since 1.26.

Just for ten minutes I saw also a trade with 0.22 lots. Ten times more then before. If jcl can confirm that its part of the new strategy then its okay. Sphin: You did the answer that those trades are part of the strategy?

No, I didn't get an answer concerning the strange trades, but I also asked for only in this thread. Before I asked for the use of any other algorithm than grid trading. But I got no answer, too.

Yes, those trades are part of the strategy. You can see them in the backtest. Z4/Z5 has two types of trades: Grid trades with high number and low volume, and short-distance trades with low number and high volume.

Hi jcl. Thanks for the additional information re. the new trades in Z4/Z5.

Can you give any more insight into what is meant by "short-distance" trades? I don't find that phrase searching in the manual. Is it in a newer Workshop entry somewhere?

Thanks.

The trades do not go over a large price distance - they have tight stop and profit limits.

Hi jcl,

thank you for the info!

I suspect that the new component tries to make money from the low-volatility state of the market. Is there any cause of not being clear about the new component?

Z5 is the low-risk part of my forex portfolio because it was clear how it works and what are the constraints it needs. Unfortunately starting with 1.26 it is over, I don't understand what it does, and it is not clear why the risk of it is lower than usual.

It would also be nice to update the documentation because it fails to say anything about the new component and it is wrong when it states that Z5 is a grid tader.

Thank you for your answer in advance!

This has not changed in Z5 - it is still a grid trader, the low volatility trading is just an additional algorithm. So there are two algorithms in parallel now. And yes, I think the low-vol algo was missing in the Z5 description and will be added.

I hope the new algorithm will get more profitable soon, its actual performance is not very ... productive. BTW sell is not an option for it? I only see buy trades.

According to the Swiss vote end of this month and the the possible consequences for the already tense situation of the CHF I wonder if Z4/Z5 have any plan (if only an 'emergency exit') for the case that EUR/CHF will cross under 1.20? As far as I can see from the manual the strategies expires that moment and have to be stopped.

I watch my Z5 account every day and coming closer to the idea of stopping Z5. Seems that price is dead...

I am with you on that one Sundance. I only just restarted Z5 with the new update, as I had ceased trading it before due to it losing money, and all it has done since go live is lose money. I will wait to see how the support at 1.20 plays out. With current changing environment, back test results may not be reliable.

If the cap withstands and the Swiss vote fails - I guess Z4/Z5 also could turn to sudden profit then. But that's not more than a bet, not a strategy.

I don't know how high the chances are that the vote will be 'yes'. If this happens ...
I really don't know if I should close all trades and finish Z5. I don't like to see EUR/CHF going south and Z5 taking buy trades all the time when the asset goes some pips up.

That's the real nature of the bet: as far as I know there are no unambiguous poll results for the Swiss vote actually. Therefore I guess the chance is nearly 50:50. At least it's very exciting.

So. I just stopped Z5 and closed all open trades. Over all I made a loss and can't see price jumping up before the rest of the money will get lost also...

(The margin calls are my faults. Sure but over the long time I won't trade a grid system again.)

Against the background of the current EUR/CHF situation I would really like to know how Z4/Z5 behave if 1,20 is crossed under. Is there any automatism that closes the trades or if not, are there any advices? As said already I think the strategies expire this moment.

Thanks, Sphin

Now that the news is out since 08:00 o'clock and EC price moved dramatically.
Does it make now sense to give Z5 again a chance?

I'm not so sure that negative rates are really suitable to keep a distinct distance to the cap or even to increase EC long term. I can imagine that it will be in a narrow corridor above the cap for a longer time. So we have to be patient.
The question from my last post was a bit stupid. As molloy wrote in his post the same happened also to me, FXCM EC prices were already below 1,20 and not all trades of Z4/Z5 were closed. So there is no automatism, thanks for clarifying!