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Swap Master - Market Neutral Arbitrage Trading

  • #181
  • Oct 9, 2020 4:43am Oct 9, 2020 4:43am
Hey Alex,

So how does the system work right now due to all the latest developments in the world, interest rates, Brokers and regulations?
What is the average return per month right now on the best system and on the worst?
Did something about the Broker combinations change? Something major?

For how long will you continue to update your EA and what happens if you donīt anymore? Can we still use it then?
What about your database? Is it ready by now or are you still working on it? How does it look like?

I am very excited to join your EA and groups

(LG aus Frankfurt)
  • #182
  • Oct 15, 2020 3:35am Oct 15, 2020 3:35am
Quoting t1mp
Hey Alex, So how does the system work right now due to all the latest developments in the world, interest rates, Brokers and regulations? What is the average return per month right now on the best system and on the worst? Did something about the Broker combinations change? Something major? For how long will you continue to update your EA and what happens if you donīt anymore? Can we still use it then? What about your database? Is it ready by now or are you still working on it? How does it look like? I am very excited to join your EA and groups ...
Hello t1mp.
As you mentioned, interest rates are at the moment not what they used to be and as result

2018, 2019 and early 2020 swap arbitrage could be used to make 10-15%. As many economies have a hard time at the moment, many central banks lowered their interest rates. And as result the swap arbitrage potential is at the moment down to 4-5.5%/month.

Broker combination changed a lot when rates changed but now the combination are again stable. Economies show sign of recovery and I believe we will see higher interest rates within the next 6-12 months. That is also what WHO economists forecast.

Updates are provided as long the underlying concepts works and we do have plans for a MT4/MT5 cross platform version to increase the possible combinations even further. Work on the database stopped temporarily because when hell broke loose I was not sure where the interest rates will end up. Fortunately, the outlook is good and the database project will be continued shortly.

Database itself is web based and will allow swap master users to track rates and arbitrage opportunities.

I hope this helps. Please let me know if you have any further questions.

Alexander
  • #183
  • Nov 12, 2020 3:09am Nov 12, 2020 3:09am
Hi there. I received a few e-mails with questions about the current swap trading situation and thought I post some of them here.

How much does the highest combination pay at the moment?

The best combination with fully regulated brokers (FCA and ASIC regulation) pays $74.57 for every lot traded. Depending on how often you are willing to rebalance your accounts, this translates to 11-22% monthly. Keep in mind that all positions are ALWAYS fully hedged. Super conservative combinations pay $6-$10/lot

How often do change swap rates at the moment?

They did change frequently at the end of 2019 and at the beginning of 2020 but we are now back to a normal change frequency.

What is the outlook?

As economies recover, we expect to see increasing rates. That means of course higher swaps and higher returns for swap trading.
  • #184
  • Nov 20, 2020 1:24am Nov 20, 2020 1:24am
Hi
Collins is there anywhere i can see trading results from a third party?
  • #185
  • Nov 23, 2020 4:56am Nov 23, 2020 4:56am
Quoting matches
Hi Collins is there anywhere i can see trading results from a third party?
No, because services like forexfactory, fxblue and myfxbook do not support analyzes of swap gains across multiple accounts. That said, swap rates are accessible for everybody. Everybody who wishes can compare them and verify for him- herself that Swap Master is based on a solid concept.

Alexander
  • #186
  • Dec 20, 2020 8:40pm Dec 20, 2020 8:40pm
Hello everyone,

I have been following this thread and I really like the idea. I have a sizable amount of capital, will this be a problem for the brokers you recommend?

Thank you.
  • #187
  • Edited 2:12am Dec 23, 2020 1:45am | Edited 2:12am
Quoting jbrightman
Hello everyone, I have been following this thread and I really like the idea. I have a sizable amount of capital, will this be a problem for the brokers you recommend? Thank you.
Hello brightman.

That depends on your definition of "sizable amount of capital". You can trade swaps with several millions $ but probably not with several billions $.

Best practice is to start with one simple portfolio. Once you are familiar with the software and all other specifics, you can size up and start to trade more complex or several portfolios.

I hope this helps.

Alexander
  • #188
  • Dec 23, 2020 2:30am Dec 23, 2020 2:30am
It also depends what instruments you want to trade. If you want to trade as example only EURUSD and want to use only tier 1 regulated brokers, you can expect the following gains.


Attached Image (click to enlarge)
Click to Enlarge Name: compound.png Size: 26 KB



Assuming that interest rates will change during the next 36 months in our favor, there is great potential for larger gains. Again, more complex portfolios offer better returns.
  • #189
  • Dec 23, 2020 8:17am Dec 23, 2020 8:17am
Quoting A. Collins
It also depends what instruments you want to trade. If you want to trade as example only EURUSD and want to use only tier 1 regulated brokers, you can expect the following gains. {image} Assuming that interest rates will change during the next 36 months in our favor, there is great potential for larger gains. Again, more complex portfolios offer better returns.
Hello Collins
If you had two 10k accounts with two regulated brokers. Trading a single pair EURUSD. What size trade would you need to open to make 3.6% monthly profit?
  • #190
  • Dec 24, 2020 7:08am Dec 24, 2020 7:08am
Quoting matches
{quote} Hello Collins If you had two 10k accounts with two regulated brokers. Trading a single pair EURUSD. What size trade would you need to open to make 3.6% monthly profit?
Hello matches.

That depends a lot from the broker choice. Just long on broker A and short on broker B is not working. If you have two specific brokers with a positive difference in mind you can look up the exact rates and then calculate how much size you need to make x %/month.

Research and portfolio ideas are also shared with clients. We have a special forum group where we share portfolio ideas, rates and broker details.

I hope this helps.
Alexander
  • #191
  • Dec 24, 2020 9:52am Dec 24, 2020 9:52am
Hello Collins, what is the average % per month you can do today? I see swaps too low in historical terms.
  • #192
  • Dec 27, 2020 8:33pm Dec 27, 2020 8:33pm
Quoting A. Collins
{quote} Hello brightman. That depends on your definition of "sizable amount of capital". You can trade swaps with several millions $ but probably not with several billions $. Best practice is to start with one simple portfolio. Once you are familiar with the software and all other specifics, you can size up and start to trade more complex or several portfolios. I hope this helps. Alexander
Thank you for your reply A. Collins and I hope you are all enjoying the holidays. I am setting everything up and will post future questions on your website forum.
  • #193
  • Dec 28, 2020 2:23am Dec 28, 2020 2:23am
Quoting jbrightman
{quote} Thank you for your reply A. Collins and I hope you are all enjoying the holidays. I am setting everything up and will post future questions on your website forum.
You are welcome!
  • #194
  • Edited 9:19am Dec 28, 2020 5:49am | Edited 9:19am
Hi,

I understand rates have been hit and miss due to Covid. But are you limited to hedging 1 pair... Or can you for example do: USD/CAD, CAD/CHF, USD/CHF

Or should you stick to hedging 1 pair and get a positive swap rate?

Last question if you wanted to maximise profit percentage per month, can you re balance each Monday morning for example?

Thank you
  • #195
  • Dec 29, 2020 1:15am Dec 29, 2020 1:15am
Quoting Rob9121
Hi, I understand rates have been hit and miss due to Covid. But are you limited to hedging 1 pair... Or can you for example do: USD/CAD, CAD/CHF, USD/CHF Or should you stick to hedging 1 pair and get a positive swap rate? Last question if you wanted to maximise profit percentage per month, can you re balance each Monday morning for example? Thank you
Hello Rob9121.

Quote
But are you limited to hedging 1 pair... Or can you for example do: USD/CAD, CAD/CHF, USD/CHF

You are not limited to one pair.

Quote
Or should you stick to hedging 1 pair and get a positive swap rate?

Many combinations are possible and some of the best performing portfolios are based on four or more instruments. However, my tip for new users is to start with a simple portfolio (one instrument).

Quote
Last question if you wanted to maximise profit percentage per month, can you re balance each Monday morning for example?

Best practice is to rebalance when required but a fixed schedule like you describe would work as well. And yes, rebalancing more often helps to maximize profits.

I hope this helps.
Alexander
  • #196
  • Dec 29, 2020 2:44am Dec 29, 2020 2:44am
I use the software as side gig and it served me well so far. Interest rates stopped dropping and while they are still low, me thinks that we will see higher rates soon. Until then I am happy with my extra 4% every month. I will put together a few screenshots over the holidays.
  • #197
  • Dec 29, 2020 4:08am Dec 29, 2020 4:08am
Quoting josef
I use the software as side gig and it served me well so far. Interest rates stopped dropping and while they are still low, me thinks that we will see higher rates soon. Until then I am happy with my extra 4% every month. I will put together a few screenshots over the holidays.
Thank you Would be great to see!
  • #198
  • Dec 29, 2020 9:01am Dec 29, 2020 9:01am
Quoting josef
I use the software as side gig and it served me well so far. Interest rates stopped dropping and while they are still low, me thinks that we will see higher rates soon. Until then I am happy with my extra 4% every month. I will put together a few screenshots over the holidays.
Do you think you could earn more than 4% if you wanted, or is that the highest you can get at the moment?
  • #199
  • Dec 29, 2020 12:08pm Dec 29, 2020 12:08pm
Quoting A. Collins
{quote} Hello Rob9121. {quote} You are not limited to one pair. {quote} Many combinations are possible and some of the best performing portfolios are based on four or more instruments. However, my tip for new users is to start with a simple portfolio (one instrument). {quote} Best practice is to rebalance when required but a fixed schedule like you describe would work as well. And yes, rebalancing more often helps to maximize profits. I hope this helps. Alexander
That answer helped massively thank you.

So is there actually anyway to lose your capital? As everything is hedged which I understand. But can a certain crisis or news event blow an account.

If you use 3 pairs as 1 portfolio, if one of those pairs crashed, can it or would it be deadly for the concept?

Thanks

Rob
  • #200
  • Jan 6, 2021 4:52am Jan 6, 2021 4:52am
Quoting Rob9121
{quote} That answer helped massively thank you. So is there actually anyway to lose your capital? As everything is hedged which I understand. But can a certain crisis or news event blow an account. If you use 3 pairs as 1 portfolio, if one of those pairs crashed, can it or would it be deadly for the concept? Thanks Rob
As all positions are hedged against each other, there is no directional trading risk. That means you wont loose money because of picking the wrong side of the market and as swap trading is incredibly boring (same profit every day at the same time), the emotional risk factor is also eliminated.

....but.... <<< here it comes

There are still some risks. They are small but should be mentioned.

Broker risk
Banks, brokers etc. can go bankrupt. When they do you will have to wait up to 6 months to get your money back. If you use unregulated brokers (don't do that) you may even lose money. The good news is that it happens rarely and as your capital is shared on two or more accounts.....

Black swan event
Theoretically everything what is lost on one account will be gained on another. In case the price jumps from whatever reason a few thousand pips within a minute, your trades will be closed by the software but there would be slippage. Probably 100 or even 200 pips. That can be in your favor or not. If the slippage is negative you will lose the work from 1-3 months.

To sum it up: Largely reduced risk (no trading risk) but not 100% risk free.

I hope this helps.

Alexander
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