Arbitrage Reverse

Arbitrage Reverse Auto Trader is a VertexFX client-side Auto Trader that trades based on the direction of the trend and the historical (average) trading price. It does not use any technical indicators but performs trading decisions based on the current price, the current profit/loss, and the accumulated (historical) profit/loss of the trading account. The idea behind this Auto Trader is that prices revert to the mean, so taking a position in the anticipation that price will revert to the mean can lead to good profits.

The initial entry trigger price is calculated based upon the input BEGINPRICE and the average price of the closed (historical) trades of the current instrument. A LONG trade is initiated if the current price goes below this trigger price, whereas a SHORT trade is initiated if the current price goes above the trigger price. To avoid entering too many consecutive trades in the same direction and risk losing money, the Auto Trader executes the trades only once per candle. This reduces the risk of opening too many trades too quickly and conserving margin.

The trigger price is recalculated on each candle – if the current price is still below the new trigger price, the Auto Trader opens another LONG trade. On the other hand, if the current price is above the new trigger price, the Auto Trader opens a new SHORT trade if none exists. However, if a SHORT trade already exists, it closes a matching LONG and a SHORT trade such that their net profit is positive. This ensures that the Auto Trader reduces its margin exposure as well as taking profits at regular intervals. If it cannot find a matching LONG and SHORT trade whose combined profit is positive it opens a new SHORT trade. This process is repeated until the price moves to the opposite side of the trigger price thereby closing matching profitable positions.

The Arbitrage Reverse Expert can be very profitable in range bound markets, and in markets where a trend reversal is imminent. In range-bound markets, the Auto Trader takes positions when the price moves away from the trigger price, and then closes profitable positions as the price approaches the trigger price. In such markets, the price typically oscillates around the trigger price thus providing excellent trading opportunities.

In markets where trend reversal is imminent, the Auto Trader initially takes positions in the opposite direction of the current trend. This is because the Auto Trader opens LONG trades below the trigger price and SHORT trades above the trigger price. When a reversal occurs the Auto Trader turns profitable and closes the profitable positions in pairs.

Once all positions are closed, the Auto Trader starts again by recalculating the new trigger price.

Configurable Inputs

1.EXPERTS– The number of instruments (charts) on which the Auto Trader is run concurrently. This Auto Trader can identify arbitrage opportunities and hence can work concurrently on more than on instrument. It is used to determine the lot-size allocation for placing the trades. If the Auto Trader is active on more than one instrument, the lot-size is scaled down accordingly. For example, if this Auto Trader is used to trade the arbitrage of EURUSD and USDJPY, then this parameter is set to 2. If this Auto Trader is used to trade only one (current) instrument, then this parameter is set to 1.

2.BEGINPRICE –The initial price at which the Auto Trader starts opening the trades. When the price touches (or crosses) this parameter, the Auto Trader starts placing the trades.

Usage

• Download the attachment from vStore or directly from the vStore tab in your terminal by performing a right click on it and selecting Download & Install
• Copy it to your company VertexFX Local VTL Files folder i.e.C:Users”Username”AppDataRoamingVertexFX Client Terminals“Company name”VTL10Local VTL Scripts
  
• Restart your Client Terminal or Right Click on “Local VTL Scripts” Tree Node to find the script.