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Safe Hedging System - Daily Swap

  • #481
  • Jul 27, 2007 3:19am Jul 27, 2007 3:19am
Quoting Holypendant
Shld i bring the exposure of the currency to zero? regarding lot size, izzit 1 lots for all pairs? but the units needed will be different rite? wat shld i do?

first, i would wait until gbp/jpy finishes unwind/retrace. if you look at day chart, it shud be pretty obvious.

then start hedge ea. on standard account, use 1 lot for round 0 and .1 lot for all other rounds of each pair.

on mini, use .1 lot for round 0 and .01 lot for all other rounds of each pair.

all other settings same as before.

Rod
Trade what you see, not what you think.
  • #482
  • Jul 27, 2007 3:27am Jul 27, 2007 3:27am
I'm using oanda. so mean 10k unit on 4 pairs? but the pip per value will be diff. is tt okie?
  • #483
  • Jul 27, 2007 3:30am Jul 27, 2007 3:30am
Quoting Holypendant
I'm using oanda. so mean 10k unit on 4 pairs? but the pip per value will be diff. is tt okie?

pip value difference is okay. round zero is 10k buy on gbp/jpy and 1o k sells on the other three. All of the other rounds would be set up for 1k buy on gbp/jpy and 1k sells on the other three.
Trade what you see, not what you think.
  • #484
  • Jul 27, 2007 3:33am Jul 27, 2007 3:33am
pip value is ok. done.. but -500pip is alot. tot tis system suppose to hedge. currency offset each other. hw come still will haf -500pip loss... means i cant open a account using tis system of 1k deposit. if the pip kp building up up to lets say -2000 to -5000 pips in long run, wun our account dry up b4 we could actually gain the swap?
  • #485
  • Jul 27, 2007 3:37am Jul 27, 2007 3:37am
Quoting Holypendant
pip value is ok. done.. but -500pip is alot. tot tis system suppose to hedge. currency offset each other. hw come still will haf -500pip loss... means i cant open a account using tis system of 1k deposit. if the pip kp building up up to lets say -2000 to -5000 pips in long run, wun our account dry up b4 we could actually gain the swap?
normally it works great. 2 things have happened. unwinding of gbp/jpy carry trades (which is what generates the positive swap normally) and the failure of the other pairs to match its momentum.

it will work once the gbp/jpy slows its downward march and will really work well once the gbp/jpy goes back to the longterm trend which is up.
Trade what you see, not what you think.
  • #486
  • Jul 27, 2007 3:43am Jul 27, 2007 3:43am
so, tis system muz allow to withstand hw many pips drawndwn? will it be like nw the situation for me, i dun even haf enough margin to open .1lot?
  • #487
  • Jul 27, 2007 3:55am Jul 27, 2007 3:55am
Quoting Holypendant
so, tis system muz allow to withstand hw many pips drawndwn? will it be like nw the situation for me, i dun even haf enough margin to open .1lot?
i don't know how many pips average drawdown is, i did not make the ea. i just use it and this is the first time there has been such a drop in the gbp/jpy. dont know what else to say.

maybe the long time users or developers will be on this thread shortly and can help you more than i can
Trade what you see, not what you think.
  • #488
  • Jul 27, 2007 4:02am Jul 27, 2007 4:02am
haha... means we r unlucky... i juz try tis system last wk n BOOM!!!!!!!!!!!!! everything is falling like mad... i tot tis will be a profitable hedging at 1st when i c some swap earning.. den suddenly there's like few hundred pip loss n i was like, ( stare in blank to comp for few min) wondering izzit my comp lagging...
  • #489
  • Jul 27, 2007 4:07am Jul 27, 2007 4:07am
Quoting Holypendant
haha... means we r unlucky... i juz try tis system last wk n BOOM!!!!!!!!!!!!! everything is falling like mad... i tot tis will be a profitable hedging at 1st when i c some swap earning.. den suddenly there's like few hundred pip loss n i was like, ( stare in blank to comp for few min) wondering izzit my comp lagging...
it happens. as of now, i am only down 340 pips now, and have $76 in swap added to my account this week. i have it on mini account.

good luck
Trade what you see, not what you think.
  • #490
  • Jul 27, 2007 4:25am Jul 27, 2007 4:25am
which platform u using? wats the leverage? u start with hw much initial balance? u use tis system for hw long?
  • #491
  • Jul 27, 2007 4:28am Jul 27, 2007 4:28am
Quoting Holypendant
which platform u using? wats the leverage? u start with hw much initial balance? u use tis system for hw long?
fxdd, 200 to 1, used system for 2 months, small 4 figure initial balance. just trying it to see if i can pick up 2-300 in swap each month.
Trade what you see, not what you think.
  • #492
  • Jul 27, 2007 4:45am Jul 27, 2007 4:45am
so is ur account balance increasing despite the unwinding? btw wats unwinding mean?
  • #493
  • Jul 27, 2007 4:50am Jul 27, 2007 4:50am
Quoting Holypendant
so is ur account balance increasing despite the unwinding? btw wats unwinding mean?
account at moment is down due to unwinding. unwinding has long full explanation, short version is that low interest currencies that pay good swap can unwind (fall drastically, 1000-1500 pips) at times after large long increases ( see gbp/jpy weekly charts, 3 severe drops shown) then the carry trades starts to wind back up and go higher.
Trade what you see, not what you think.
  • #494
  • Jul 27, 2007 4:52am Jul 27, 2007 4:52am
so when is the time the unwinding will stop?
  • #495
  • Jul 27, 2007 5:00am Jul 27, 2007 5:00am
Quoting Holypendant
so when is the time the unwinding will stop?

hard to tell and you would get many different opinions. next support i see is 241.50 and if broken, 239.50 area. depends on financial news as well. if us economic numbers start looking better, investors won't need to cash in profits from carry trades to cover other debts, obligations and carry trades will resume.

hard to explain in short emails. you need to google carry trades or go to forexfactory.com threads on gbp/jpy and other carry trade currencies.

thats about all the help i can give you
Trade what you see, not what you think.
  • #496
  • Jul 27, 2007 5:06am Jul 27, 2007 5:06am
Quoting Holypendant
so when is the time the unwinding will stop?
US dollar recovers ground in midsession Asia on carry trade unwinding
SYDNEY (Thomson Financial) - The US dollar was recovering some ground against the yen and euro in Asian trading midday Friday following the Wall Street-led global equity market sell-off arising from heightened fears about the US subprime mortgage market.

At 1.00 pm here (0300 GMT), the dollar was at 119.22 yen, up from 118.88 in early Asia trade, while the euro was softer at 1.3743 dollars, from 1.3750 earlier.

Currency traders remain focused on developments in the equity markets as well as the unwinding of carry trades as risk appetite is slashed.

CMC Markets chief analyst Ashraf Laidi said despite the deterioration in US housing data, the greenback has been relatively stable as positions were reduced in the carry trade currencies such as the Australian and New Zealand dollars, as well as the selling in the sterling.

This flight to low-risk assets was clearly shown in the 11.3-basis-point fall in US 10-year bond yields overnight to 4.785 percent, its lowest since mid-May.
Trade what you see, not what you think.
  • #497
  • Jul 27, 2007 5:10am Jul 27, 2007 5:10am
Quoting Holypendant
so is ur account balance increasing despite the unwinding? btw wats unwinding mean?
Carry Trades Pressured as Equities Sell/Bonds are Bought
Carry trades were pressured to a degree as positve equity markets turned negative. The DOW, which had been up 90 points early in the session reversed course all the way to -130 by 10.45AM.

The GBP/JPY, which had been as high as 251.07 dropped to a low of 248.6 as USD/JPY approached 121.0

The fall in equites was mirrored by world-wide falling bond yeilds as traders apparently fled stocks for safer investments. Yeild on the US 10y lost nearly 10 basis points to 4.95. Some of today's movement was attributed to sub-prime difficulties, but disapointing earnings from Google, Catepillar and Microsoft also weighed.
Trade what you see, not what you think.
  • #498
  • Jul 28, 2007 12:41am Jul 28, 2007 12:41am
i'm using oanda demo to trade tis hedge strategy. leverage is 50:1 so means instead of $11 per day swap for 400:1 leverage, i shld get ($11/8=$1.375) swap per day rite?

rollover int :
1lot Long gbp/jpy +1.305
1lot Short gbp/usd -0.265
1lot Short chf/jpy -0.278
1lot Short usd/chf -0.425

total swap collected $0.337 per day. Even if i ($0.337*8) only $2.696 is collected. may i know how u guys get $11 per day per basket?
  • #499
  • Jul 28, 2007 1:14pm Jul 28, 2007 1:14pm
any one using tis hedge?
  • #500
  • Jul 28, 2007 2:46pm Jul 28, 2007 2:46pm
Quoting Holypendant
i'm using oanda demo to trade tis hedge strategy. leverage is 50:1 so means instead of $11 per day swap for 400:1 leverage, i shld get ($11/8=$1.375) swap per day rite?

rollover int :
1lot Long gbp/jpy +1.305
1lot Short gbp/usd -0.265
1lot Short chf/jpy -0.278
1lot Short usd/chf -0.425

total swap collected $0.337 per day. Even if i ($0.337*8) only $2.696 is collected. may i know how u guys get $11 per day per basket?

no, it should be: $11 per day swap for 100:1 leverage....
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