Getting Started Questions Robominer II

[mcdirt]

Just doing some due diligence on Robominer II before deciding to go ahead and use it & have a couple of questions ...

1. Just trying to get my head around the Grid Trading idea - is there a best time to start using RoboMiner on the traded pairs? Is it better to start when price is near the price mid-point or one of the extremes or doesn't it matter?

2. Based on idea above, is now a good, great, bad time to start?

3. I would open a new account for this and the broker I am looking at offers leverage up to 300:1. You mention 200 and 400 in your documentation but I assume (?) that 300:1 is better than 200:1?

4. I'm in Australia & since this looks like a very long term system, I'd like to trade using an Australian Dollar account to avoid exchange rate changes. Would using an Aud$ account change any of the setup info - will the Auto settings still work?

5. Will the calculations used to prevent margin calls have to be scaled for Aud$ account?

Many thanks for any info
rgds mcdirt

[Forex Goldmine]

Hi McDirt,

Originally Posted by mcdirt

Just doing some due diligence on Robominer II before deciding to go ahead and use it & have a couple of questions ...

That is always wise to ask questions.

Originally Posted by mcdirt

1. Just trying to get my head around the Grid Trading idea - is there a best time to start using RoboMiner on the traded pairs? Is it better to start when price is near the price mid-point or one of the extremes or doesn't it matter?

In my opinion, the best time is when the currency is at or near the all time high or low. This is because RoboMiner opens trades in relation to the mid-point. If you're at the high, it will open sell orders, under the assumption that the price will drop as it comes back to the center. Therefore, it's like riding a rollercoaster down the giant hill and picking up the profits.

If you start near the mid-point, then the currency moves away and RoboMiner places buy or sell orders (if you are below or above the mid-point, respectively) and you have to wait for the currency to come back down through your orders until you profit.

Originally Posted by mcdirt

2. Based on idea above, is now a good, great, bad time to start?

I would say (guess, as who can really predict the market?) that now is a "good" time. A "great" time would have been around May 2009.

Originally Posted by mcdirt

3. I would open a new account for this and the broker I am looking at offers leverage up to 300:1. You mention 200 and 400 in your documentation but I assume (?) that 300:1 is better than 200:1?

Yes, 300:1 is better than 200:1, but it also depends on your account balance. Here's the official explanation on Leverage in regards to RoboMiner:

The leverage recommendation has to do with the fact that a certain dollar amount is held against each trade as a margin requirement, and the lower the leverage, the more the dollar amount that is required to be held as margin. For example, if the margin requirement for a given trade is $1.00 at 400:1, then that means it is $2.00 at 200:1 and $4.00 at 100:1 . All that extra margin is like baggage when you have lots of RoboMiner trades hanging, and it causes you to need more of a balance in your account to sustain the extra margin. The RoboMiner can work with 100:1 margin, but it is marginal, and it would be better to work with at least 200:1.

Originally Posted by mcdirt

4. I'm in Australia & since this looks like a very long term system, I'd like to trade using an Australian Dollar account to avoid exchange rate changes. Would using an Aud$ account change any of the setup info - will the Auto settings still work?

You can use an AUD account. No settings changes are required. The settings are related to the markets you are trading on (AUD/NZD) and not your "cash" settings of your brokerage account.

Originally Posted by mcdirt

5. Will the calculations used to prevent margin calls have to be scaled for Aud$ account?

No.

Originally Posted by mcdirt

Many thanks for any info
rgds mcdirt

You're very welcome. Please do let me know if you have any other questions.

Just an FYI - I will be traveling today so I may be a little slow on replies.

[mcdirt]

Thanks very much for taking the time to reply.

I do have another question ... with the way the levels are set, does that mean that every RoboMiner user is always going in the same direction at exactly the same price? The levels will be identical on every users platform?

rgds McDirt

[Forex Goldmine]

Actually no. RoboMiner doesn't pick a certain level to enter a position in regards to the mid-point. It will open a position pretty much as soon as you start the robot, and then subsequent orders in relation to the first one (so in 40 pips). Therefore if you were to start RoboMiner at 9:00am, and someone else started it at 10:00am, you would both have different orders at different times, but they would all be the same distance away from subsequent orders.

However, you will always be selling if you're above the mid-point, and buying when below.

[mcdirt]

OK, understood - thanks.

[mcdirt]

I have been thinking about the $Aud account issue more and I cannot see how the figures used for the calculations in the "proof.pdf" which were presumably done in $US can be applied directly to an $Aud account.

The Margin required for each trade in $Aud will be 1/(AUD-USD) times bigger?

The Margin required for the worst case will be bigger and presumably the calculations to do the Balance Factor etc automatically will be incorrect by the same factor 1/(AUDUSD)?

With this being such a long term commitment, this has to be right at the start. Sorry if I'm being dense, but I just don't get it.

rgds McDirt

[Forex Goldmine]

I agree that the figures used in the Proof document won't directly apply to other currencies, so you are correct. I was just saying you can use an AUD trading account. I am not sure how the figured would come out long term. Let me get some more info and I will get back to you on this one. However, there are several traders in Australia who are doing quite well, such as Alby Koster who has his statements listed on the home page.

[mcdirt]

Thanks, I'm sure $Aud accounts will still do well but if on Auto, then I think they are taking higher risk than designed?

I assume that the "Automated Balance Factor Settings" listed on page 6 of the User Manual would have been designed for US$ accounts and so would be be wrong for $Aud, or any other currency.

But because the $Aud is worth less than the $US we would in effect be taking higher risks than the Auto Settings should give ie instead of increasing from Balance Factor of $3500 to $4000 at $12,000 - we would actually be making the increase more at like US$10,000.

It may not make that much of a difference currently, I don't know but if the $Aud goes back down to 60c or so, then it's a fair discrepancy.

If this is so, and depending upon how difficult the coding would be vs how many non $US account holders number your members, would it be worth adding an automatic conversion for the Balance Factor Settings into the EA?

rgds McDirt

[Forex Goldmine]

Here you go:

All the automated BalanceFactor settings are predicated on the account being a USD account. If the account is based in another currency, then they should use a manual BalanceFactor that is appropriate for that currency in relation to the USD. For example, I have a EURO based account. I am trading only the AUDNZD, so wish to work with the equivalent of $2000 USD and a 2000 BalanceFactor if it were USD. I have 1469 Euros in my account (slightly more than $2000) and I am using a BalanceFactor of 1460. The EA reads the EURO balance, so it gives me .01 lots for every 1460 in Euros. When I reach 2920 Euros, it will start trading .02 lots.

But since that 2920 Euros translates to $4000 in USD, then that is OK.

[mcdirt]

OK, understood.
Many thanks.

rgds McDirt