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Overview of Circadian EA

Circadian EA is a triangular arbitrage expert advisor developed by Conor Stephenson that works by exploiting price correlations between three currency pairs on the forex market. The expert advisor opens trades on three currency pairs simultaneously when it detects synchronized arbitrage opportunities in the market.

Circadian EA

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Some key features of Circadian EA:

  • Works based on triangular arbitrage strategy
  • Trades three currency pairs at a time which are grouped into sets
  • Searches for arbitrage opportunities every minute
  • Has automatic take profit and basket close logic to manage trades
  • Designed for the MT5 platform (does not work on MT4)
  • High risk experimental system that requires caution

How Circadian EA Works

The Circadian EA is constantly monitoring three currency pairs in a market, looking for brief moments when their prices get out of sync in a way that creates a profitable arbitrage opportunity.

For example, if EUR/USD, USD/JPY and EUR/JPY currency pairs are being monitored, the expert advisor calculates the implied EUR/JPY rate from the other two currency pairs. If the actual EUR/JPY rate in the market differs from the implied rate by more than the transaction costs and spread, an arbitrage opportunity exists.

When such an opportunity is detected, Circadian will simultaneously open long and short positions on the three currency pairs to lock in a risk-free profit. The trades stay open only briefly until the market prices realign and the profit is realized.

The expert advisor groups the currency pairs into predefined sets and allocates 20 seconds to search each set for arbitrage signals every minute. If a valid signal is detected in a set, that set gets locked in and the trades are opened.

Performance and Risks

Based on backtests, Circadian EA shows promising profitability results in specific market conditions that allow for frequent arbitrage opportunities. However, live results indicate the system can also accumulate losses during extended unfavorable market phases.

The developer himself cautions that Circadian is a highly experimental system and advises caution when using it. Some key risks include:

  • Arbitrage opportunities may not occur frequently enough for consistent profits
  • Sudden price spikes can cause losses before trades are closed
  • Time delays in order execution can negatively impact results
  • Requires constant monitoring and possible manual intervention

The EA is also not compatible with the popular MT4 platform. It must be run in MT5. Overall, Circadian EA introduces an interesting statistical arbitrage strategy but likely requires further development and testing to become a reliable automated system.

Circadian Rhythms and Health

Beyond the expert advisor, the term “circadian” refers to biological processes that follow a daily cyclical rhythm. Humans and other organisms have internal circadian clocks that synchronize various physiological functions to match the 24-hour day/night cycle.

When these circadian rhythms get disrupted, it can negatively impact physical and mental health in various ways. Jet lag is one common example of circadian disruption. More severe misalignment between internal rhythms and external cycles can contribute to sleep disorders, metabolic diseases, mood disorders, and cognitive dysfunction.

Therefore, maintaining proper circadian alignment is important for overall health. Research suggests various interventions can help stabilize circadian rhythms, including light therapy, melatonin supplementation, scheduled sleep/wake cycles, and timed exercise.

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Applying Circadian Concepts to Education

The circadian system undergoes significant changes through child development and adolescence which influences sleep patterns and academic performance. Younger children naturally have earlier chronotypes and sleep/wake cycles compared to adolescents and adults. But the shift towards later chronotypes during puberty conflicts with early school start times, leading to circadian misalignment.

Studies show better alignment between an individual’s circadian preference and school schedule is associated with improved academic achievement, fewer behavioral issues, and lower risk of grade retention. Schools could apply circadian research to optimize start times based on students’ developmental stages. Customized schedules matching innate circadian rhythms may improve learning outcomes.

Other educational concepts influenced by circadian biology include timed teaching of certain subjects to match peak mental performance times, using interoception activities to refocus student attention at specific times of day, and teaching students circadian concepts to improve sleep hygiene and productivity.

Conclusion

In summary, Circadian EA introduces an innovative statistical arbitrage strategy for automated trading, but one that carries high implementation risks. From a broader perspective, circadian rhythms significantly impact human health, performance, and education outcomes. Maintaining proper alignment between external and internal biological cycles provides benefits across many areas of life. Chronobiology remains an emerging field with much still to learn about applying circadian principles to medicine, psychology, education, and beyond.

Author: Dominic Walsh
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I am a highly regarded trader, author & coach with over 16 years of experience trading financial markets. Today I am recognized by many as a forex strategy developer. After starting blogging in 2014, I became one of the world's most widely followed forex trading coaches, with a monthly readership of more than 40,000 traders! Make sure to follow me on social media: Instagram | Facebook | Youtube| Twitter | Pinterest | Medium | Quora | Reddit | Telegram Channel

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