Hello everyone, I have spent a few months now studying hedging to earn interest every night risk free. Well what i have learned is, hedging is not risk free, Pairs that are "-98% correlated that you can use almost all your margin on" are very risky. And i just found out why. i opened a small position of GBP/USD, and USD/CHF on my live Oanda account. I was hoping to prove to myself that one would move one way x amount of pips, the other would move the other that same amount of pips. When they did not move in oposite directions (I believe at one point one was -153 and the other -30something) i did a look over of their long term graphs and realized, they are very correlated in direction, but not in the same number of pips. I realized that at first glance it looks like like one moved up 100 pips while the other dropped 100 pips. However, upon closer inspection, one of the pairs had increased 100 but the other decreased 200. since the graphs were not in proportion to actual pip movements, it threw me off at first glance.

So then, disappointed that i could not safely hedge most of my margin, i decided to hedge the GBP/USD and USD/CHF, but only use 30% of my margin. Also, I did not open my postions all at once, i acctually have about 10 small hedged postions, opened at different times. With my account of a little over 1600usd, using about $500 in this pair, i make about a dollar a day, every day, plus about .20 US interest rate. total=about 1.20 a day. Which is by no means anything to brag about. But, consider this, after 50 days of this i will have $60 more in my account, if i add 30% more of that, thats $18 more margin i used and a little more interest every day so the next 50 days will bring you more, and so on and so on (compound interest)

I know this isn't a get quick rich thing, especially with an account of $1600. But over the course of say, 5 years, that is 1825 days that you earn interest every day. Also the more you can fund your account with, the more interest you will make and the faster compound interest will take off. I also plan to save a little bit of money each month and fund my account from time to time to build it up.

This is my plan, I'm sticking to it, it takes nearly no time after it is set up, and is consistent. i would love to hear feedback, thanks!

So then, disappointed that i could not safely hedge most of my margin, i decided to hedge the GBP/USD and USD/CHF, but only use 30% of my margin. Also, I did not open my postions all at once, i acctually have about 10 small hedged postions, opened at different times. With my account of a little over 1600usd, using about $500 in this pair, i make about a dollar a day, every day, plus about .20 US interest rate. total=about 1.20 a day. Which is by no means anything to brag about. But, consider this, after 50 days of this i will have $60 more in my account, if i add 30% more of that, thats $18 more margin i used and a little more interest every day so the next 50 days will bring you more, and so on and so on (compound interest)

I know this isn't a get quick rich thing, especially with an account of $1600. But over the course of say, 5 years, that is 1825 days that you earn interest every day. Also the more you can fund your account with, the more interest you will make and the faster compound interest will take off. I also plan to save a little bit of money each month and fund my account from time to time to build it up.

This is my plan, I'm sticking to it, it takes nearly no time after it is set up, and is consistent. i would love to hear feedback, thanks!

PipMasterFlex