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Safe Hedging System - Daily Swap

  • #521
  • Aug 13, 2007 8:45pm Aug 13, 2007 8:45pm
Fab4X,

Are you willing to share your backtest indicator? I have a similar basket backtest indicator, but yours looks more effecient.

TimeFreedom

Quoting fab4x
Ran these 4 pairs into my backtest indicator. From 8/1/05 till now 8/10/07
STarted $2000 full account, RISK 25% of capital. Biggest drawdown $-700
Current balance $3701. Interest total approx $905

I guess if you start with big capital and risk more you will make a killing

Seems stable!
  • #522
  • Aug 14, 2007 1:10pm Aug 14, 2007 1:10pm
i suppose every1 tt was into tis type of hedging basket bought GBP/JPY. currently it had drop more than 1000pips since its top. So does tis affect the basket? I'm curious about something. will GBP/JPY keep dropping forever? forex is very volatile. so i'm wondering, all pairs cant keep go bulls/bears forever meaning GBP/JPY cannot be drop until the rate is 100 right? if instead of hedging a basket, can i just buy GBP/JPY everyday to average out the price and just collect the interest? your opinion is much appreciated.. plz contribute with ur answer.. any1 also can..
  • #523
  • Aug 14, 2007 2:33pm Aug 14, 2007 2:33pm
Quoting Holypendant
i suppose every1 tt was into tis type of hedging basket bought GBP/JPY. currently it had drop more than 1000pips since its top. So does tis affect the basket? I'm curious about something. will GBP/JPY keep dropping forever? forex is very volatile. so i'm wondering, all pairs cant keep go bulls/bears forever meaning GBP/JPY cannot be drop until the rate is 100 right? if instead of hedging a basket, can i just buy GBP/JPY everyday to average out the price and just collect the interest? your opinion is much appreciated.. plz contribute with ur answer.. any1 also can..
If you put the Guppy on Monthly chart and zoom all the way out you will see that the bottom is about 10,000 pips down from here! Be careful!
  • #524
  • Aug 17, 2007 3:41am Aug 17, 2007 3:41am
Hi all... whats the situation u all in now?
  • #525
  • Aug 18, 2007 7:27am Aug 18, 2007 7:27am
i am in a horrible situation. All accounts got margin call.
  • #526
  • Aug 18, 2007 10:49am Aug 18, 2007 10:49am
Quoting forexwoman
i am in a horrible situation. All accounts got margin call.
Wow, this thread really ought to be re-titled, this is not safe at all! So sorry this happened to you.
  • #527
  • Aug 19, 2007 6:52am Aug 19, 2007 6:52am
This is always the issue with carry trade .. point of entry is crucial .. plus you need to have the account balance and the stomach to withstand unwinding.
Any idiot can take profit, real traders know how to take losses!
  • #528
  • Aug 19, 2007 11:23am Aug 19, 2007 11:23am
but then, no currency will kp on dropping forever..
  • #529
  • Aug 21, 2007 4:43am Aug 21, 2007 4:43am
Quoting forexwoman
i am in a horrible situation. All accounts got margin call.


izzit u over margin? r u using tis hedge system?
  • #530
  • Aug 21, 2007 2:50pm Aug 21, 2007 2:50pm
Hi Boostrade,

I am trading with your method.

I do the trade according your criteria...what happen if i only close the winner positions and replace it for other position at the same caracteristics and leave open the loser position until this be winner...i am founding witn this, take profits and donīt close loser positions...

This is correct or not?

Thank you very much!!!

Quoting boostrade
Hi, Rama,

Thanks for your effort of the testing of different scenarios.
I would like to know how you come up with the lot sizes below?
I use GBPJPY as the base currency to determine lot size of the others.
GBPJPY = 1 lot
CHFJPY = 2 * GBPJPY lots.
GBPUSD = GBPJYP lots.
USDCHF = 0.5 * GBPJPY lots.

I think my way of calculating lot sizes may differ from yours 'coz I'll double USDCHF, that is 2*GBPJPY lots. This is because if you see the average daily range (number of pips moves from top to bottom), you'll find that GBPJPY often moves 2 fold or more than USDCHF, and since their pip value are almost the same, 8.2 and 8.3, the dollar value difference at the end will be huge! At least 2 times.
So if GBPJPY rises, you sure can make a lot of money, but if it drops, it's also a sure to lose.
My calculation of a safer hedge will be
GBPJPY 1 Lot
CHFJPY 3 Lot
GBPUSD 1.5 Lot
USDCHF 2 Lot

The problem is, is you use these lot sizes, you end up lose in swaps...but you may make profit of 1-3% from time to time.

More to go later with more real life test.
________ EAZM-FX
  • #531
  • Aug 21, 2007 4:32pm Aug 21, 2007 4:32pm
have worked someone NZD/USD USD/JPY and NZD/USD???
________ EAZM-FX
  • #532
  • Aug 21, 2007 11:49pm Aug 21, 2007 11:49pm
Quoting edgarandreszm
Hi Boostrade,

I am trading with your method.

I do the trade according your criteria...what happen if i only close the winner positions and replace it for other position at the same caracteristics and leave open the loser position until this be winner...i am founding witn this, take profits and donīt close loser positions...

This is correct or not?

Thank you very much!!!
from tis method, taking tis recent unwind for example, u r losing alot of pips when yen r strong...
  • #533
  • Aug 24, 2007 1:06pm Aug 24, 2007 1:06pm
got some question to ask some genius. You know people hedge currency like buy 1 lot gbp/yen sell 1 lot gbp/usd sell 1 lot usd/yen. becoz of price diff, end up it's actually usd/yen. so mind as well long usd/yen. swap will be much more also. correct me if i'm wrong. plus if i buy 1 mini lot with margin need is $50 per mini lot, i get $2.86 swap if i long gbp/usd alone. lets say i got balance wit $100000, i buy 1 lot everytime it drop 100 pip, wuldnt i be very safe? lets say i bought at highest which was 250.00 den it drop to lowest 220.00, i wuld haf entry about 30times which means 30lots. i use up margin $1500. avg bought wuld be ard 242.84. unrealised P/L 46500pip which is also $46500.

46500+1500= 48000. u still left 52k to play with it. plus the swap u take everyday is 61usd per day. 1 mth which means 1.8kusd. will tis work? isnt tis better than hedging here n there? any opinion?
  • #534
  • Aug 24, 2007 7:42pm Aug 24, 2007 7:42pm
This is only if you have really deep pockets..
you are absolutely right..
because buying mini lots with $100,000 account means that you are only using 0.05% margin per position. Even through that credit market crash you would only have used 1.5% margin in total. This is still less than what most systems would recommend.
It would definitely work if people could actually STICK to it....but with human nature we have fear and greed, and when those come into play, everything will just fall apart.

But what if the average investor only had $5,000 to invest with? We would have to go with 0.5k lots, which are not available. I believe the smallest available lot size is a micro lot, which are 1k lots.

This strategy would only work with $10,000 minimum...

But when you look at it again, what if it keeps going up? Do you keep scaling up? Because buying one mini lot with $100,000 is not the wisest way to invest your money. I think your strategy would only be valid in a downtrending market. Scaling in while you see your losses keep growing is definitely NOT for the faint of heart...

Just my 2 cents..
  • #535
  • Aug 24, 2007 7:44pm Aug 24, 2007 7:44pm
I think the GBP/JPY is a really good pair to have in a mix of currency pairs just for the interest alone, but it is way too volatile and to solely trade the GBP/JPY is NOT the way to consistent profits...

Warren Buffett didn't accumulate his wealth by making big wins here and there....he did it by consistently compounding around 22% a year.

-Dickens
  • #536
  • Aug 24, 2007 7:51pm Aug 24, 2007 7:51pm
To all the traders who actually tried to implement Mr. Genius' hedging system, I hope you didn't trade with real money because you would have been slaughtered...
And I wonder where Mr. Genius went????

-Dickens
  • #537
  • Aug 24, 2007 10:49pm Aug 24, 2007 10:49pm
Quoting ForexDragon
This is only if you have really deep pockets..
you are absolutely right..
because buying mini lots with $100,000 account means that you are only using 0.05% margin per position. Even through that credit market crash you would only have used 1.5% margin in total. This is still less than what most systems would recommend.
It would definitely work if people could actually STICK to it....but with human nature we have fear and greed, and when those come into play, everything will just fall apart.

But what if the average investor only had $5,000 to invest with? We would have to go with 0.5k lots, which are not available. I believe the smallest available lot size is a micro lot, which are 1k lots.

This strategy would only work with $10,000 minimum...

But when you look at it again, what if it keeps going up? Do you keep scaling up? Because buying one mini lot with $100,000 is not the wisest way to invest your money. I think your strategy would only be valid in a downtrending market. Scaling in while you see your losses keep growing is definitely NOT for the faint of heart...

Just my 2 cents..

If price goes up every 200 pips, i put in 1 mini lot too... i putting mini lot becoz of my balance so that it is able to withstand all market crashed. if u trade oanda, u can even trade with the smallest unit which is 1. lol.... having earn 1.8kusd per mth means 21.6k per yr which is ROI 21.6% frm the invested $100,000 thats alot right?
  • #538
  • Aug 25, 2007 6:11am Aug 25, 2007 6:11am
I want to make a simple comment, there is nothing that prevents GBPJPY from easing back to 200 level.. even If it does not make sense that carry trade will suffer that much, but we have to put all possibilities here. I just can't hedge based on that GBPJPY will always recover and carry trades remain safe.

With that noted, I do not want to see a big drawdawn in my account. I tested this on demo some time back, and the loss was increasing, over what I actually gain from swap.

Now, I have fears that GBPJPY will run another extension below 219 and I can't long it here. Do you suggest other safe-hedging method?
Forex is not easy!
  • #539
  • Aug 25, 2007 6:35am Aug 25, 2007 6:35am
Quoting Holypendant
If price goes up every 200 pips, i put in 1 mini lot too... i putting mini lot becoz of my balance so that it is able to withstand all market crashed. if u trade oanda, u can even trade with the smallest unit which is 1. lol.... having earn 1.8kusd per mth means 21.6k per yr which is ROI 21.6% frm the invested $100,000 thats alot right?
Holypendant,

21.6% ROI is pretty good, I would say, but for the kind of risk your account is put at, I think you would deserve more than 21.6% per year.

The market can easily reverse on your position one day, and believe me, GBPJPY is one of those pairs which you don't want to be on the wrong side of....

Let me ask you a question, are you the kind of trader who likes to take a lot of risks and go for the big trades, or are you the kind of trader who wants to be consistent and wouldn't mind small consistent profits (and interest)?

-Dickens
  • #540
  • Aug 25, 2007 8:44am Aug 25, 2007 8:44am
Quoting ForexDragon
Holypendant,

21.6% ROI is pretty good, I would say, but for the kind of risk your account is put at, I think you would deserve more than 21.6% per year.

The market can easily reverse on your position one day, and believe me, GBPJPY is one of those pairs which you don't want to be on the wrong side of....

Let me ask you a question, are you the kind of trader who likes to take a lot of risks and go for the big trades, or are you the kind of trader who wants to be consistent and wouldn't mind small consistent profits (and interest)?

-Dickens


i wan to find a trading system which is simple n dun haf to monitor chart everyday. i dun mind small int tts y i'm goin to use the method i suggest on oanda. buying 100unit for every 100 pip chge . i had already make an order for gbp/yen range from 250 to 190 every 100 pip. thats about 60 entry.
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