- Speed & Rebates
- Rebates past experiences
- BACKTESTING INVESTING VS SPEED TRADING
- Breakdown
- Conclusion
Speed & Rebates: Secret weapon with huge risk
My work in the financial markets, particularly with XAUUSD, involves developing and testing algorithmic trading strategies for MT4 and MT5. Currently, I’m focused on creating a tailored solution for a client, designed to achieve high gains through a specific approach that leverages market volatility both sides.
This is a bespoke trading strategy, not a standard rebate program. I’m crafting a customized system based on the client’s requirements, using my expertise to optimize the trading process. Through detailed testing and ongoing refinement, the goal is to maximize trading volume while managing an adjusted risk based on the client’s requirements.
Now, let’s talk about rebates. Imagine you’re trading, and with every trade you make, you’re getting a small percentage of your trading volume back. It’s like getting paid to trade. That’s essentially what rebates are. Brokers often offer these to incentivize trading activity. The more you trade, the higher your volume, and the more rebates you earn.
Think of it like this: you place a trade, and a portion of the spread or commission is returned to you. Over time, these small amounts add up significantly, especially with high-volume strategies. Furthermore, brokers often have tiered rebate programs. The higher your trading volume or account status (like VIP), the larger the percentage of rebates you receive. This means that with a well-optimized, high-volume strategy, you can significantly boost your overall profitability through rebates, effectively turning trading activity into an additional revenue stream.
Rebates past experiences
In the past, while exploring algo trading forums, I found a specific group of traders interested in rebates. While I knew they offered good potential, especially since I was trading high risk-volume at the time, the risk stopped me from thinking of rebates as an option. I was focused on fast account growth, not the controlled environment needed for consistent passive income.
I saw that many rebate traders used scalpers and low-pip grid systems, often claiming to be high-frequency trading (HFT). However, these systems, based on simple logic, were weak against strong trends that could quickly empty an account, leading to big losses. I first thought these strategies were just people wanting easy money without real trading skills.
However, I’ve learned that judging and being negative isn’t helpful, especially when people are just trying to find their own trading method. My own experience, with daily testing and trading, isn’t the same for everyone.
The idea of rebates, especially the monthly payouts, stayed with me. As I learned more about risk and improved my trading systems, I saw the potential for big rebate growth. It was clear that a good, high-volume strategy, with good risk control, could make a strong, regular income from rebates.
"In investing, what is comfortable is rarely profitable." — Robert Arnott
Investing & Trading
I categorize my trading systems into two distinct styles: investing and trading, each with its own risk profile. Investing focuses on long-term growth, employing a slow, controlled risk-reward approach based on extensive historical data, such as market behavior from 2004 to 2025. Trading, on the other hand, is short-term, characterized by high risk-reward ratios, aimed at quick profits with minimal market exposure.
Naturally, my investing model lends itself well to generating high-volume rebates. By adjusting the logic to scalp more aggressively within smaller price ranges, I can significantly increase trading frequency. This is a robust strategy that I now integrate into my investing models. However, the majority of the volume is generated through very small lot sizes, typically 0.01 or 0.02, while larger lots are opened less frequently.
Make no mistake, this approach has added a substantial 30% to my investment returns as essentially free money, and with compounding, its power is undeniable. But not everyone has the patience for a long-term strategy, or they prefer a system specifically tailored to maximize rebates. This allows them to leverage the premium, diamond, VIP, and other high-status benefits offered by brokers after large deposits.
BACKTESTING INVESTING VS SPEED TRADING
When evaluating trading strategies, backtesting provides crucial insights into potential performance. Here, we’ll compare the results of my speed trading and investing models using data from December 1, 2024, to February 22, 2025.
Speed Trading Model:
- Initial Deposit: $100,000 USD
- Profit Factor: 6.59
- Total Trades: 10,741
- Maximum Drawdown (DD): $5,743
- Win Rate: 86% (9,274 winning trades)
Investing Model:
- Initial Deposit: $100,000 USD
- Profit Factor: 3.10
- Total Trades: 703
- Maximum Drawdown (DD): $780
- Win Rate: 92% (649 winning trades)
Breakdown:
The speed trading model demonstrates a significantly higher trading volume and profit factor over the three-month period. This indicates a strategy finely tuned to capitalize on short-term market fluctuations, generating substantial rebates through its high trade frequency. However, it’s essential to note that this model, while promising, is only 25% complete. Further forward testing is required to validate its performance and ensure robustness, especially when dealing with low tick data. It is also important to note that the high win rate and profit factor are indicative of a model that is very well fitted to the past 3 months of data.
Conversely, the investing model, while exhibiting a lower profit factor and trading volume, showcases a more conservative approach with a significantly lower drawdown. This model, currently operating with a simplified buy-only logic (the sell logic is optimized separately) and a fraction of its total logic components, is not designed for the short-term, high-frequency environment reflected in the backtesting period. The low risk-reward ratio is a direct result of the prevailing bullish market conditions, given its counter-trend nature.
Conclusion:
This comparison highlights the distinct characteristics of speed trading and investing strategies. Speed trading, with its high volume and profit potential, is ideally suited for maximizing rebates and leveraging broker benefits. However, it requires rigorous testing and optimization to mitigate the risks associated with its high-frequency nature. Investing models, while offering stability and lower risk, are designed for long-term growth and may not yield optimal results in short, trend-driven market conditions. Ultimately, the choice between these strategies depends on individual risk tolerance, trading goals, and the desired balance between profit potential and stability. My expertise allows me to tailor either type of strategy to the specific needs of my clients.
