In the dynamic world of Forex Trading, automated trading robots have emerged as a tool to streamline and optimize trading strategies. One such robot is the Cointegrated Pairs Trading Robot, a sophisticated software designed to operate on the Metatrader 4 platform. In this review, we will delve into the features, functionality, and performance of this trading robot.
An Overview of the Cointegrated Pairs Trading Robot
The Cointegrated Pairs Trading Robot is a unique automated trading software that operates on the principle of cointegration. It trades two or more symbols simultaneously, unlike many other trading robots. Due to this feature, it cannot be tested with the strategy tester in Metatrader 4, which can only synchronize price timing for one symbol at a time.
To test this robot successfully, it has to run in real-time on a demo account and be monitored for several days. The robot applies a linear regression on the historical prices of two instruments, such as Stocks or Forex symbols, and performs a cointegration test on the residual from the regression.
Trading Strategy and Performance
The Cointegrated Pairs Trading Robot is based on trading a stationary residual process. It exploits the mean-reversion property of stationary processes. When conditions allow, the robot will always bet on the residual crossing the mean from time to time. This strategy results in a low risk and good returns in the long run. However, the entry opportunities are rare, so users might need to trade several pairs to compensate for the infrequency of entry & exit opportunities.
Understanding the Parameters
The robot operates based on several parameters. The data size for building the cointegration model, termed as ‘N’, is one of them. Another significant parameter is ‘OpMode’ that selects the operation mode from four available values.
Additionally, ‘Magic’ & ‘magik’ are magic numbers used to uniquely identify trades opened by the robot. Each magic number should be a uniquely chosen positive integer. ‘MaxRatio’ limits the slope relating the two traded instruments, ‘CurLevel’ represents the current level of the residual process relative to the standard deviation, and ‘LimLevel’ is the maximum level allowed for the residual process to reach.
Investment and Withdrawal
Users will need to register with a broker of their choice and maintain a minimum deposit between $150 and $200. It is recommended to have $50 for every 0.01 lots (standard). Care should be taken while withdrawing to not violate the funds-to-lot relationship.
Independent Testing and Updates
Users can watch independent testing of the Cointegrated Pairs Trading Robot on the forexroboteasy.com website. Subscriptions for updates on the results of testing this product are also available.
FAQs
Q1. Can I test the Cointegrated Pairs Trading Robot on Metatrader 4?
A1. No, due to the robot’s ability to trade multiple symbols simultaneously, it cannot be tested on Metatrader 4’s strategy tester. Instead, it needs to be tested in real-time on a demo account.
Q2. What is the minimum deposit required to use this robot?
A2. The minimum deposit required to use the Cointegrated Pairs Trading Robot is between $150 and $200.
Q3. How can I monitor the performance of the robot?
A3. You can monitor the robot’s performance by subscribing to updates on the forexroboteasy.com website.
Have you used the Cointegrated Pairs Trading Robot? We would love to hear about your experiences. Please share your insights in the comments below.
Disclaimer: This is an independent product review and does not constitute financial advice. Always conduct your own research before making any investment decisions.
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