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Arbitrage with no-interest broker

  • #81
  • Dec 6, 2006 9:42am Dec 6, 2006 9:42am
gbp going down!
  • #82
  • Dec 6, 2006 4:43pm Dec 6, 2006 4:43pm
Quoting titikokatiting
Has anyone tried hedging 2 different brokers one offering no swap while the other charging interest and end up earning in the process? based on my computation, if i buy 10 lots of USD/JPY from my broker that charges interest and then i sell 10 lots USD/JPY from the no-swap-broker, in theory I will earn around 136 dollars a day or 2,739 dollars a month.

This might sound too good to be true.

Can anyone enlighten me on the matter?
Why take a month to make that amount when you can do it in a couple of hours? Don't try and slick the market, trade the market and you will win. If you place opposing trades with different brokers it would be no different than placing a hedge with one broker. And tell me, how much money will you make opening a hedge trade on the yen? (-20 pips! = ($200)) If you want to hedge the yen use the pound or euro. And if you are in forex only to pay your rent, you are in the wrong business venture. This market is made for billionaires. Get rich and be happy. You can make three grand a month with a nine to five without all the risk.
A. Finesse Williams Making Millions One Pip At A Time!
  • #83
  • Dec 6, 2006 4:59pm Dec 6, 2006 4:59pm
Quoting titikokatiting
im planning to do it next week, 50,000 dollars for each broker. if im gonna earn 2,736 dollars a month, thats 32,832 dollars a year. thats 32% return on equity. after 12 years, the value will be $ 2,798,254. comments?
If you have $100,000 to invest, you can get a better ROI by giving your money to a money manager. If you want to learn to trade have someone teach you. And it wont even cost you 1% of your 100 grand. The money you are predicting to make in one month I made in 7 hours last month. And this is because I know how to trade. I don't use a system that attempts to box in the price. I use a style that moves with the price. Please rethink this.
A. Finesse Williams Making Millions One Pip At A Time!
  • #84
  • Dec 6, 2006 5:10pm Dec 6, 2006 5:10pm
Quoting titikokatiting
yup, if after 1 month, my other account is losing 40,000 and the other is gaining 40,000. i'll close both my position then transfer my earnings from one account to another and then continue to trade again...what do you think?
This will only work if the market is in a steady trend for the time periods you are planning to keep these trades open. And we both know the market oscillates and returns to its place of origin. So, if you lose 40,000 on a margin call, then the market reverses and start taking away the profits you made, you will come out under $100,000. Try your theory in a demo account for one month and see where it gets you. Then you will have proof it works. But $3,000 a month aint no money. People are joining forex because that is all they are bringing in. Besides, an aggressive mutual fund will give you a better ROI and pay you throughout the year in dividends.
A. Finesse Williams Making Millions One Pip At A Time!
  • #85
  • Dec 7, 2006 4:46am Dec 7, 2006 4:46am
Quoting aswilled
This will only work if the market is in a steady trend for the time periods you are planning to keep these trades open. And we both know the market oscillates and returns to its place of origin. So, if you lose 40,000 on a margin call, then the market reverses and start taking away the profits you made, you will come out under $100,000. Try your theory in a demo account for one month and see where it gets you. Then you will have proof it works. But $3,000 a month aint no money. People are joining forex because that is all they are bringing in. Besides, an aggressive mutual fund will give you a better ROI and pay you throughout the year in dividends.



you have a point though. anyway thanks for that. i'll think about it. actually for me, that ind of system is a sure win without any risk and hopefully the earnings will be invested again on that same system to experience the power of compounding. anyways, what mutual fund gives 2 to 3 percent a month?
  • #86
  • Dec 8, 2006 1:19am Dec 8, 2006 1:19am
Quoting aswilled
This will only work if the market is in a steady trend for the time periods you are planning to keep these trades open. And we both know the market oscillates and returns to its place of origin. So, if you lose 40,000 on a margin call, then the market reverses and start taking away the profits you made, you will come out under $100,000. Try your theory in a demo account for one month and see where it gets you. Then you will have proof it works. But $3,000 a month aint no money. People are joining forex because that is all they are bringing in. Besides, an aggressive mutual fund will give you a better ROI and pay you throughout the year in dividends.
Could you express your point clearly

howard
Regards
  • #87
  • Dec 9, 2006 12:45am Dec 9, 2006 12:45am
yeah i know
  • #88
  • Dec 9, 2006 2:05am Dec 9, 2006 2:05am
what is the "swap"
  • #89
  • Dec 9, 2006 2:51am Dec 9, 2006 2:51am
Quoting clam61
what is the "swap"
Clam

Differential interest payable or receiveable on overnight open positions

howard
Regards
  • #90
  • Dec 9, 2006 12:08pm Dec 9, 2006 12:08pm
Hey guys very intresting strategy, as we know that gbp/jpy is the highest intrest yielding pair on a long position, and also the gpb/jpy has been going up for the last five years or so, my idea would be to just hold this pair, making a great return on intrest and taking your chances of it going up which look pretty good to me why hedge with another broker when you can pretty much guess the long position will be going up
  • #91
  • Dec 9, 2006 12:25pm Dec 9, 2006 12:25pm
reading hte inital post, thats what i thought it might be...but what broker does not charge interest?


but even if you could find a broker that does that...depending on whether your winning position was with the swapless broker or the other..you might end up being charged interest.
Quoting howard
Clam

Differential interest payable or receiveable on overnight open positions

howard
  • #92
  • Dec 9, 2006 12:44pm Dec 9, 2006 12:44pm
Quoting clam61
reading hte inital post, thats what i thought it might be...but what broker does not charge interest?


but even if you could find a broker that does that...depending on whether your winning position was with the swapless broker or the other..you might end up being charged interest.
A few brokers in accordance with Islamic rules do not apply swap, instead charge a fixed amount when you open the position, this is what he wants to take advantage of.
Regards
  • #93
  • Dec 9, 2006 10:47pm Dec 9, 2006 10:47pm
1994 to 1998, gbp/jpy went up then 1998 to 2000 , it went down, and from 2000 to 2006 its going up, dont want to take chances here, next year, might go down, so might as well just hedge it with a non swap broker, your still gonna earn around 6000 dollars per month on a 10 lot position without the risk.



Quoting PipBird
Hey guys very intresting strategy, as we know that gbp/jpy is the highest intrest yielding pair on a long position, and also the gpb/jpy has been going up for the last five years or so, my idea would be to just hold this pair, making a great return on intrest and taking your chances of it going up which look pretty good to me why hedge with another broker when you can pretty much guess the long position will be going up
  • #94
  • Dec 10, 2006 2:51am Dec 10, 2006 2:51am
Quoting PipBird
Hey guys very intresting strategy, as we know that gbp/jpy is the highest intrest yielding pair on a long position, and also the gpb/jpy has been going up for the last five years or so, my idea would be to just hold this pair, making a great return on intrest and taking your chances of it going up which look pretty good to me why hedge with another broker when you can pretty much guess the long position will be going up
The highest interest yielding pairs are :1- NZDJPY 2-AUDJPY 3-GBPJPY

Regards

howard
Regards
  • #95
  • Dec 15, 2006 12:56am Dec 15, 2006 12:56am
titikok

Did you have any progress on this idea?

howard
Regards
  • #96
  • Dec 15, 2006 6:35pm Dec 15, 2006 6:35pm
Quoting howard
titikok

Did you have any progress on this idea?

howard

i just finished researching brokers, dont know if i can post the names. i prefer the usd/jpy. i have'nt started cause my country's currency (Philippine Peso is appreciating every day..so if i convert my money to dollars and earn interest through this method, then change it back to peso, it wnt make a difference. i'll start it when the peso is depreciating again which will happen maybe nxt month.
  • #97
  • Edited Dec 16, 2006 1:22pm Dec 15, 2006 6:46pm | Edited Dec 16, 2006 1:22pm
{ post deleted, racism will not be tolerated at FF }
"The time to act is when others show signs of tire." --W.D. Gann
  • #98
  • Dec 16, 2006 10:49am Dec 16, 2006 10:49am
Quoting titikokatiting
i just finished researching brokers, dont know if i can post the names. i prefer the usd/jpy. i have'nt started cause my country's currency (Philippine Peso is appreciating every day..so if i convert my money to dollars and earn interest through this method, then change it back to peso, it wnt make a difference. i'll start it when the peso is depreciating again which will happen maybe nxt month.
Please keep us posted in any event, it is an interesting subject.

Thanks a lot

howard
Regards
  • #99
  • Dec 16, 2006 12:09pm Dec 16, 2006 12:09pm
I have a model built for this type of strategy. I can't share it here because I built it with another trader and we'd have to agree together to share it. But, I would say that you need to construct a financial model with a spreadsheet and think of ALL the variables that will impact your profitability before jumping in. I'll leave it at that.

And, yes, I think this is a good strategy and good approach.
  • #100
  • Dec 16, 2006 8:59pm Dec 16, 2006 8:59pm
tnx for the opinion. yeah, im still looking at all variables that can affect profitability like the volatility of the highest yielding pairs, i think that one can really affect profitability. the longer the position stays there without transfering funds from one another to the other, the better. so less volatile pairs are much better eventhough it is not the highest yielding pair in the industry..i'll still double check everything. thanks dude.



Quoting stockwet
I have a model built for this type of strategy. I can't share it here because I built it with another trader and we'd have to agree together to share it. But, I would say that you need to construct a financial model with a spreadsheet and think of ALL the variables that will impact your profitability before jumping in. I'll leave it at that.

And, yes, I think this is a good strategy and good approach.
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