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Arbitrage with no-interest broker

  • #141
  • Sep 4, 2007 4:25am Sep 4, 2007 4:25am
Yeah, There is also the safety of funds issue with brokers, especially US ones. thankfully I never had funds in a broker that has gone bankrupt, but its something I am always concerned about, I keep the smallest amount of funds safely possible with each broker I use. I think UK brokers are safer generally.
  • #142
  • Sep 4, 2007 4:39am Sep 4, 2007 4:39am
Quoting bubbabobe
Very good strategy titikokatiting!
How are brokers realize what is going on? I mean how do
they differ people trading this startegy from people who
are simply going short with GBP/JPY?
Because all the non-swap broker sees is that you are
going short on GBP/JPY! Am I right?

Anyway the best pair for this purpose is EURGBP I guess with
virtually no volatility at all! (a maximum of 200 pip/month, with a decent
swap of around 5$ / standard lot)
hi,
in my experience, i haven't had any problems with the brokers. they won't know you're hedging unless you tell them. and i trade .01 (micro lots) when i feel like scalping a little to avoid suspicion. scalping in licro lots won't even cost you $5. scalping in mini lots is also alright. my answer to that is unless they have specific employees whose duty is to study and determine which traders are doing hedging versus traders who are just shorting gbp/jpy, they won't know. besides, if they are truly compensated throught the bid/ask spread like most online brokers say, then they shouldn't care what and how we trade. i think MIG from time to time looks at their clients' trades, but i'm not sure. I just read in their website that if they suspect "abuse" (although i don't know what constitutes the term 'abuse' in MIG's definition), they will close ur trades i think.
for non-swap i've used crown and northfinance. crown's execution is bad, so i just stuck with northfinance. i haven't had any problems with them. wires are also fast with NF. other swiss and off-shore brokers offer non-swap.
  • #143
  • Sep 4, 2007 4:44am Sep 4, 2007 4:44am
Quoting peterM
thanks for the reply. Which pair are you using ? I have also tried this strategy with good results, I had enough room for a 1000 pip swing on each side using GBP/JPY.
i use usd/jpy and rarely gbp/jpy because usd/jpy is less volatile and only 3 pips spread. i can break even in 4 or 5 days using usd/jpy because i only have to recover a total of 6 pips to for the spread usually. but if gbp/jpy is displaying non-volatile behavior, i might put in 1 lot or 0.5 lots. allowance for 1000 pip swing is very good. have u tried entering in stages (in different prices) to extend ur volatility tolerance?
  • #144
  • Sep 4, 2007 5:01am Sep 4, 2007 5:01am
Quoting bubbabobe
Anyway the best pair for this purpose is EURGBP I guess with
virtually no volatility at all! (a maximum of 200 pip/month, with a decent
swap of around 5$ / standard lot)
Good observation, lets explore that idea further...
If you have $10,000 and split it between broker1 and broker2, you'll have $5,000 in each broker. If you have a leverage of 100:1 that gives you 5 lots. but of course we won't use all 5 lots because you have to leave an allowance for movement, even a little bit.
so let's say we use 4 lots. that leaves us with only $1,000 of free margin.
4-lots multiply by $5 per lot is $20 a day. that's $600 per month. that's 6% a month. not bad. some brokers spread for EURGBP is 5 pips, the lowest i've seen is 2 pips. you can earn back the spread in maybe 9-14 days depending on your broker's spreads. This is perfect for those who don't want to worry about volatility too much. I haven't tried this pair so we need feedback from those who've tried it. very good observation.
I guess each trader will find the currrency pair most suited to his personality. If you're a risk taker with little patience then you might go for gbp/jpy or gbp/chf. if you're somewhere in the middle, you might go for aud/jpy or usd/jpy. if you're in it for the long haul then eurgbp might be the one. But for sure, all hedgers have some degree of patience and safety of funds at the back of their minds, otherwise they wouldn't be hedging, they would be trading no matter how hard and long it takes to find the perfect system.
  • #145
  • Sep 4, 2007 9:36am Sep 4, 2007 9:36am
Quoting titikokatiting
i use usd/jpy and rarely gbp/jpy because usd/jpy is less volatile and only 3 pips spread. i can break even in 4 or 5 days using usd/jpy because i only have to recover a total of 6 pips to for the spread usually. but if gbp/jpy is displaying non-volatile behavior, i might put in 1 lot or 0.5 lots. allowance for 1000 pip swing is very good. have u tried entering in stages (in different prices) to extend ur volatility tolerance?
I did consider using usd/jpy instead, in some ways I think it may be a better choice like you say. I haven't tried staggered entries, that is a very good idea, it may hamper your returns though if you don't have all your money in at once, but I can see how you would be able to go longer without rebalancing.
  • #146
  • Nov 5, 2012 9:53am Nov 5, 2012 9:53am
The issue of carry trade has been around for a while . if you mus trade this technique you must not do it on the same broker but diff accounts with diff brokers and you require a lot of capital
  • #147
  • Nov 5, 2012 10:54am Nov 5, 2012 10:54am
Quoting johnny122
The issue of carry trade has been around for a while . if you mus trade this technique you must not do it on the same broker but diff accounts with diff brokers and you require a lot of capital
whats with noobs coming here and starting old threads up?? Your saying what the op has already said and tried. Whos paying you?
  • #148
  • Last Post: Feb 11, 2013 2:38pm Feb 11, 2013 2:38pm
Did anybody succeed with such trading? I'm asking before recently I found a website comparing swaps from different brokers, and saw that some of them are offering positive swap where majority of the brokers charge swap... any such experience?
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