FIFO Violation (Out Of Sync) Solution

This is a lengthy detailed email of thoughts and feedback on the Eros Project on the FIFO violation sync problems caused for FIFO regulated traders inside the USA and those using Oanda outside out the US.

I truly appreciate the detailed email with questions, ideas, as well as excellent feedback presented here and will be instrumental for many in the group who also are interested in the most seamless sync experience and help me reach my million dollar trade target before the end of the year!

I will include first the full notes of the email for you to read in full, then, I will include the my response labeled with the appropriate section heading to make it easy to follow. If you are currently a member of the Eros Project using a FIFO regulated broker or an Oanda user make sure to read this in full and include any questions or comments below.

#3 below discusses in length the issue at hand mentioned above.

#4, #5, #6 are system related questions.

So everyone is on the same page we are talking about the same system when referring to the Eros Project or conquer v3 on steroids.

Let’s get started with first the emailed being provided below to read first followed by my responses below.

3 Coming back to the issue of Trade could not be closed to the FIFO violation.
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I have tried various things to deal with this.

Case 1.
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Computer 1, OANDA application would hang and become completely unresponsive, BUT all the stop levels are still recognized by Oanda’s Servers. CPU of the computer is up to 100%, which means every other app on the computer would run very slow. I was able to follow the trades on my Ipad app for Oanda, and I saw that all the stops and existing orders were still executed fine. Did new pending orders and market orders open up when OANDA application is locked up, currently UNKNOWN.

Automatic solution. When all the orders for the currency are closed (when tp or sl is hit, or when you close the positions manually, or I close the violation orders through other trading app than Metatrader ( such as my Ipad Oanda app or my phone Oanda app…. Actually I Ike the phone app a lot, it has a feature to close the COMPLETE position for a currency in 1 click, even if it has a lot of trades open)

Manual solution. While Oanda app is uresponsive, if you open another metatrader on another computer it locks up as well, so you can’t shut down metatrader or turn of the EA. The only solution would be to unplug the internet (which is when metatrader becomes responsive again, Turn off the EA, turn the internet back on, manually close the orders that are in violation manually (which might be in profit or loss at the time) and then restart the EA.

Case 2 .
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Using a computer with a Faster CPU with no other applications running on it. Same results. This is what I was doing when I was on vacation in Hawaii last month (which was awesome!) I would have to glance at the computer a couple of times a day to make sure everything is running smoothly.

Case 3.
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This brings me to another update. I actually got a VPS for my account. I researched many different ones including the one you recommended. Honestly, your VPS doesn’t have the best reviews. From what I read on the forums, they used to be great but their service is starting to degrade and their customer service is not the best. I decided to go with on of the best options on the market right now http://www.commercialnetworkservices.com or CNS for short. Its not cheap, but considering the reliability is the #1 priority here, I don’t mind. My setup costs me about $90 per month, and they don’t have any deals to save money in the first month, but I think they have a 2 week or 1 month money back if you don’t like their service from start. Right now my setup is 1.5 gig ram and a pretty strong CPU. And you can upgrade it all you want. The internet seems VERY fast, I tried browsing the web through the VPS, its looks almost instant, at least a lot faster than my home cable connection, I guess their data center is an a T1…or faster, as it should be. They have 3 data centers across the country, I’m using the one in NY. The NY data center is just 5mili seconds latency to the Oanda Servers, which was the selling point for me. The data center is just a couple of blocks away from the Oanda servers, which I think is a big deal.

So getting back to case 3. I have Steroids running flawlesly on the VPS for the past 2 weeks, I have seen the Fifo Violation once. I was actually able to access the Metatrader platform…..it was extremely slow, as in….1 minute between each click. So I was able to shut down the EA and close the violating orders. So the solution might be a super strong CPU, I might upgrade my VPS even more.

Now here is a somewhat serious issue. A few days ago I noticed that my Metatrader account isn’t making any trades, and in fact on the bottom of the platform it said that my platform is disabled. I called Oanda and asked them what’s going on, they asked me if I’m using an EA, and they referred to the FIFO Violation issue, so they disabled my account. I asked them to please turn it back on and I would resolve the issue and they said sure, no problem and in about 5 minutes I was up and running again. From what I can tell my account was down for about 40 minutes so it didn’t effect my PNL. But you can see that this could cause serious issues if this was not noticed for a long time. So in the long term, I think we should find a permanent resolution to the FIFO. I think it would require a programming change, otherwise one would have to look over the metatrader platform every few hours while there are open positions….unless the disabling of account is a once in a blue moon occurrence.

No to dig a little deeper, what is causing the FIFO violation. I believe this is caused by another problem in the software. The issue that is causing to have most of my trades open for a few seconds and then closed and reopened again ( but I’m not sure) that we discussed before. Lets refer to this software issue as the “10 second bug” Here is what I think is happening:
Trade 1 is open, 1 Lot of Eur/Usd
5 hours later
Trade 2 is open ,1 Lot of Eur Usd….which is closed 10 seconds later, to be opened again with Trade 3 due to the “10 second bug”
FiFO violation……Trade 2 is trying to close before trade 1 has been closed. By Fifo rules, trade 1 should close before trade 2 so we are stuck with the FIFO issue.

Now, if we could resolve the 10 second bug, the FIFO issue would not even exist…..at least that is my assumption. I read the e-mail that your developer sent about the reason for the issue and the suggestion for a stronger, faster computer with no apps running. I’ve switched 4 computers, I’m on a very fast internet connection, without much improvement of the issue. I mean sure we’re loosing a few pips when the trades are opened and closed, but the major issue here is the stability of the platform (and the account not being disabled (obviously).

This is all assuming that this is happening on the slave accounts and NOT on the master account. So my questions are:

What is your experience with FIFO violation issue and 10 second bug on the master accounts? Do you encounter both, 1 or neither?

Do your other clients experience the issues and how do they dial with them? Has anyone else’s account been disabled?

If the issue is only happening only slave accounts (during the copying of the trades) and we can not resolve the issues by fixing the software here are other possible solutions.

Solution 1
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Set up a Matatrader account directly on your VPS with identical EA running on each account. This way there is no need to copy trade at all. Client will have read only access to their account, and will not be able to access your software (since its your proprietary system). 1 big issue would be, only the automated trades will be executed and not your manual trades.

Solution 2
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Some Brokers have an option to have managed sub accounts for Metatrader, perhaps you are familiar with this. You have a master account which is coppied into the sub accounts, pretty much like a trade copier. I think that Oanda doesnt have this option….yet. This would require switching brokers. I think IBFX might have this option.

These solutions only make sence if the issue is only occuring on slave accounts. If the bug is occuring on the Master account, the only resulition would be a software fix. Perhaps its not an easy fix and a major change would be required, but i’m SURE from a programming stand point its fixable. Perhaps the software needs many more conditions such as checking for existing orders, comparing the order numbers to see if they are equal in size and closing the earlier once before the later ones or perhaps not opening new orders if there was a similar order opened within a minute. I have not seen your code so I’m just guessing.

Don’t get me wrong, I love the way this system works, and perhaps its find the way it is now. But as an investor, I would not put a Million bucks into an system that has regular occurring software bugs…unless you are completely managing the software, the account, and I don’t see them….LOL.

4 Risk
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I n your earlier e-mail you mentioned that you added risk control AND added protection. What’s the difference between the two? Do you mean you have mental total risk stops PLUS automated shutdown of positions once we’re down 35% or something similar? Please describe, if possible
Also, i have noticed that the EUR/JPY position usually carry double the risk of other currencies. I understand why, since EUR/JPY has a higher ATR, and since the SL is 1/3 of ADR, EUR/JPY is a higher SL which is usually 60-70 pips rather than EUR/USD SL which is about 30 pips. This means you are taking higher risk on EUR/JPY trades than other currencies, while the trade for all currencies are opened with the same trade size. Why do we risk more just to trade this cross? Because the currency moves more? Is it worth the hither risk? If my logic here is correct we could either NOT trade the currency at all or, put in a very simple condition into the software to check if the currency is Eur/Jpy either set the SL to 1/4 of ATR or instead of 1/3 or adjust the trade size of this currency to smaller lot size to have the risk equal to the $ amount of the risk size of say EUR/USD position….for example to only risk 3% of the equity, or whatever the rules are.

Of course I could be completely wrong here….so please let me know if I am.

5 Take profit levels
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Every trade has 3 take profit levels. Level 1 is hit pretty often, this is when our equity makes their nice 20%-40% profit moves. Level 2 profit, I think your account hit them a few times, I haven’t seen mine get there yet, but I have only been with “sterods” for a couple of months as at first i was using Regular Conquer 3. Have you ever hit level 3? Is that ATR x 3? Would this really happen more than a couple of times a year? If statistically this is a very rare occurrence maybe Level 2 and level 3 should be a little closer to each other. I think ti would be a good idea to keep track of how often we hit level 2 and level 3 and make adjustments to the Take profit levels accordingly. Just thinking, perhaps this would improve the profitability of the system in the long term.

6 Breakeven
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How soon does the stoploss go to BE? Is it 1/3 ATR like the stop loss? I have seen trades in 50+ pip gain turn around and turn into a loss.
Well these are all the questions and ideas for today. I really hope you don’t mind my long e-mails. I feel that I am becoming intimately familiar with “Steroids”, I have 5 monitors at home, and 3 at work and I always have system up next to me in some form whether its in Metatrader, myfxbook, Ipad or on my phone. It’s the first thing I look at when I wake up in the morning…..LOL. I hope some of my thoughts/suggestions will help you reach your million dollar trade target before the end of the year!

3 Coming back to the issue of Trade could not be closed to the FIFO violation.
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This section is amazingly helpful to all. Thank you. I will summarize this information for everyone else involved with the Eros Project along with my thoughts.

Case 1.
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What is causing the CPU to rise to 100% is the FIFO broker continuously changing the take profit and stop loss levels. This does not occur at all with the trade copier software and non-FIFO brokers.

By the way, I also love the Oanda app which is just awesome. I prefer trading from it but need to trade off of mt4 for the trade copier software to run best. I also like being able to close all orders on a given pair at once.

Case 3.
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Switching to a ultra fast or capable VPS with high resources is a valid solution. Especially for those trading account over 10K. The problem is when you noted the “serious” issue of Oanda disabling your account because of FIFO violations and you have to contact support to re-enable it. This has happened with another member as well. Same exact situation. The FIFO violations were using up oanda server resources so they and to disable the account.

This leaves the solution being using a non-FIFO broker. Not an issue for those outside the United States. For those within the USA this leaves the options of IBFX USA or FXDD. Do you know of another US regulated broker who is able to get around the FIFO issue?

This is all assuming that this is happening on the slave accounts and NOT on the master account. Correct

So my questions are:

What is your experience with FIFO violation issue and 10 second bug on the master accounts?

With the master using Oanda a FIFO regulated account these issues do not occur.

Do your other clients experience the issues and how do they dial with them? Has anyone else’s account been disabled?

All Oanda users are experiencing high CPU usage sometimes causing salves to get out of sync and trades having to be closed manually. So far, only one other account had been temporally disabled. I expect more will be without a permanent solution.

Solution 1
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The system is a hybrid of manual and automated so this is impossible.

Solution 2
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The bug only occur on slaves using FIFO regulated brokers or namely Oanda. Using the IBFX sub-accounts would work but that is not a universal fix. However, slaves using IBFX would eliminate the FIFO problem and therefore all other bugs caused by it.

Once user had moved away from Oanda to Traders Way (European broker) and has not experienced any problems at all since. This includes trades being opened and then closed seconds later and reopened, becoming out of sync with the master, and high CPU usage. All issues eliminated.

The best permanent solution I see at this point for users within the USA (using Oanda) is to use a broker within the USA that is able to get around the FIFO issue. From my understanding IBFX USA is better than FXDD (both are able to get around FIFO). Is there a better solution than IBFX? Traders outside of the USA can use any non-FIFO broker without problem.

4 Risk
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The risk control and added protection of exiting open positions totaling an unrealized loss -10% is the same thing. A mental stop is used and he automated trades do not have a automated shutdown as they do reach that level of drawdown.

I am trading risk to reward ratios instead of solely risk. If I am risking 1/3 ATR than I know I am looking for a gain of 1 to 2 ATR or 3 to 6 times greater than the risk. Because a given pair is expanding and the ATR is higher I do not look to limit my risk on this pair but increase my potential gain while keeping my risk in proportion. The pair with the highest ATR is going see the most trades because expanding markets are preferred.

5 Take profit levels
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I am trading risk to reward ratios. I know that roughly 25% of TP1 will take place, 12% of TP2, and 4% of TP3. I also know that those 4% of TP3 contribute crucially to overall system performance.

Automated trades account for a certain percentage of all trades and are additionally manually managed when they morph into hybrid trades.

6 Breakeven
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Trades taken from the EA are moved to break-even at 1/2 ATR (not 1/3). A +50 pip trade turning into a loss is not my concern. I know that less than 50% of the trades I taken (I believe 46% winners is the most accurate long term number I can give) will be gains. This means I know that over 50% trades I take will be loses. Mirco managing a trade into profit fifty pips will cause me to close trades prematurely losing the long term edge of the system.

Again, I am grateful for the time and detail it took to prepare these notes in the email above. It is very helpful to everyone involved. Thank you.

Best,
Jordan