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EUR/USD,USD/CHF Hedge

  • #21
  • Edited 8:01pm Dec 28, 2006 7:25pm | Edited 8:01pm
Visit {link removed, see rule #3} and you will find everything about signals

Happy New Year
  • #22
  • Dec 29, 2006 1:31am Dec 29, 2006 1:31am
I don't know, I have never traded futures or options, it just was an idea.
A lot of people made carry trades buying pairs XXX/JPY to collect interest and it would be interesting to hedge it if you want to maintain it for long time and with options or futures you avoid the opposite interest.

Quoting eztr8
Jon167, So lets say buy USD/CHF in forex to profit from swap and buy features EUR/USD would be a solid hedge? Well, how easy is it to buy features? Do you have some info on this?

Steve
  • #23
  • Dec 30, 2006 7:32pm Dec 30, 2006 7:32pm
I just came back to this forum to see what was new, and to look up various strategies that I have been following on other forums. I have to say that only here do I find people putting down the correlation hedging methods, FR-like strategies, and even types of triangular arbitrage. Not to sound negative, but it seems that if you have not made money on any of the above, you find it easier to say it doesn't work, and that only novices would use it. I beg to differ. Novices lose their money trying to beat the trend. It is next to impossible to time the market, yet all you "professionals" seem to think this to the mature thing to do.

Hedging, when done properly, is about the closest thing to long term, profitable trading in forex that there is. I have to admit that I don't make 20, 30 or 50% per month with my live trading, but I do make a comfortable 2-6% using hedging methods. Furthermore, my account have yet to blow up. If I can continue to make roughly 50% return per year for a few years, I'll be set. I couldn't stand to look myself in the mirro if I became "professional" and bet the lot on a market-timing scheme.

Good luck everyone.

Doug
  • #24
  • Dec 30, 2006 7:58pm Dec 30, 2006 7:58pm
Quoting biwy
Instead of bothering trying to hedge to different pairs =P I will hadge only one pair....

I discovered, looking at many different forex company that many of them had different swaps. My most recent discovery was on GBPusd.

2 opposite swaps. In one company you get swap when you sell, in the othe one, you get swap when you buy. With a 10k leverage lock, you would receive around 2 usd a day, not too bad.

I found other swap weirdness with pound yen...

happy trading
Nothing going on today so I looked in on this thread.

Excuse me for not understanding, but my understanding is that swap rates are based on differences in interest rates between different currencies. While the swap rates at different brokers would vary, the direction would not. Thus, at least from my undestanding, the yen pairs would always have a swap in your favour when you are long and would be against you when you are short, and this would be regardless of what broker you are using. The only difference between brokers if you were long poundyen, for example, would be the amount you received at rollover. With Japan's interest rate being lower than anyone else's I cannot imagine this being otherwise with any broker.

Please correct me if I am wrong. Thank you.
  • #25
  • Jan 1, 2007 2:47pm Jan 1, 2007 2:47pm
hedge with options or hedge trades in profit in the spot market there are brokers outthere offerering eurusd and usdeur :-) in the spotmarket.


revoke
  • #26
  • Jan 2, 2007 12:41am Jan 2, 2007 12:41am
going long for NZD anyone can help for indicators?
  • #27
  • Jan 2, 2007 3:11am Jan 2, 2007 3:11am
The swap usd/chf is in your favor roughly ¼ more than the swap you owe on eur/usd, at least with the broker I use. This isn’t much even with my institutional rates. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>

That’s why I also like to trade the gbp/usd hedged with usd/jpy. The correlation eur/usd,usd/chf trailing 6 month is -0.95 this is the strongest of any major currency pair you can get(see www.dailyfx.com). The correlation gbp\usd with usd\jpy is –0.71 which is ok for long term carry trades. The swap usd/jpy is in your favor about 11 times more then the swap you owe on gbp/usd. <o></o>

<o></o>

This hedging strategy works for me. I have opened trades going long with all those mentioned pairs 10 days ago and my live account shows 12% profit after just 10 days which 25% of that profit is swap in my favor alone.<o></o>

~ste
  • #28
  • Jan 2, 2007 11:19pm Jan 2, 2007 11:19pm
Quoting eztr8
25% of that profit is swap in my favor alone.
What does that mean? "25% of that profit is swap in my favor?" Thanks.
  • #29
  • Jan 4, 2007 1:34am Jan 4, 2007 1:34am
Quoting tdion
What does that mean? "25% of that profit is swap in my favor?" Thanks.
Its just the amount of interest I received after 10days. I had a profit from open trades including interest of $840. $210 was just interest (swap) which is 25%. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>

Today after the gbp and euro got hammered my whole equity only lost 2% so my hedge with chf and jpy worked pretty good.

~ste<o></o>
  • #30
  • Jan 14, 2007 11:52pm Jan 14, 2007 11:52pm
You have it all wrong. Some hedging is only part of what makes this program tick. I'm guessing you haven't used it. I have, and I've made hundreds of thousands of dollars in just the last few months. What you're referring to is an oversimplified description. This system has quadrupled my own portfolio in four months, is reactive in nature and not predictive, lets me sleep at night instead of trade, and captures mega-bucks in rollover interest. I suggest you take a closer look and until you've tried it, you can't really appreciate the genius behind it. The network marketing part is irrelevant to the value of the system.

Quoting BurgerKing
I agree. Tell that to the hapless novices who joined freedomrocks.com thinking that its a goldmine. freedomrocks is a MLM and each member is very prolific sucking in more members.

I sure hate to see these novices loose their money when CHF rallies hard vs EUR (ie, EURCHF bearish).
  • #31
  • Jan 15, 2007 12:18am Jan 15, 2007 12:18am
Quoting mgetline
You have it all wrong. Some hedging is only part of what makes this program tick. I'm guessing you haven't used it. I have, and I've made hundreds of thousands of dollars in just the last few months. What you're referring to is an oversimplified description. This system has quadrupled my own portfolio in four months, is reactive in nature and not predictive, lets me sleep at night instead of trade, and captures mega-bucks in rollover interest. I suggest you take a closer look and until you've tried it, you can't really appreciate the genius behind it. The network marketing part is irrelevant to the value of the system.

shhhhhh.........don't tell the pro's....our profits will go down..........


regards fxloot
  • #32
  • Jan 15, 2007 12:31am Jan 15, 2007 12:31am
so how about trading one pair (gbp/jpy for example) with two brokers, go long with your normal broker, and short with a broker that doesn't have interest at all, doesnt give or take interest on any position.
  • #33
  • Feb 1, 2007 8:48pm Feb 1, 2007 8:48pm
Quoting ScottH
so how about trading one pair (gbp/jpy for example) with two brokers, go long with your normal broker, and short with a broker that doesn't have interest at all, doesnt give or take interest on any position.

Have you tried this with any success, or received or saw any feedback regarding this strategy?
  • #34
  • Apr 24, 2007 2:16pm Apr 24, 2007 2:16pm
Quoting mgetline
You have it all wrong. Some hedging is only part of what makes this program tick. I'm guessing you haven't used it. I have, and I've made hundreds of thousands of dollars in just the last few months. What you're referring to is an oversimplified description. This system has quadrupled my own portfolio in four months, is reactive in nature and not predictive, lets me sleep at night instead of trade, and captures mega-bucks in rollover interest. I suggest you take a closer look and until you've tried it, you can't really appreciate the genius behind it. The network marketing part is irrelevant to the value of the system.
Today,
EURUSD=1.3624,
USDCHF=1.2030
EURCHF=1.6386
Freedom Rocks recommend me to:

Buy 1.68 EURUSD
Buy 1.71 USDCHF

These are equivalent to:
Buy 168K EUR, Sell 228.9k USD
Buy 171K USD, Sell 205.7K CHF
Net Buy 168K EUR
Net Sell 205.7K CHF
Net Sell 57.9K USD

Which is equivalent to:
Buy 1.68 Lot EURCHF
Sell 0.58 Lot USDCHF

From this, the hedging is 70% Long EURCHF.


Likewise, I dont buy the grid trading it presented:
FR suggests to keep buying everytime USDCHF drops 100 or so pips down. Umm.. since Nov 2006, USDCHF has dropped 400 pips. That leaves me with a handfull of Long USDCHF at 1.2500, 1.2400, 1.2300, 1.2200 ....
FR also suggests to partially close 0.1 lot everytime EURUSD climbs 100 or so pips up. Nice... So since Nov 2006, I wont have any EURUSD on my hand.

Now what do I got? Long USDCHF.


However, doing the Freedom Rocks do have merits if you know when to enter the trade. Since this is based on EURCHF, I highly suggest to enter this trade when EURCHF drops. Someone suggests to plot Bollinger Bands on the H1, H4 or Daily Charts. Once it touches bottom, BUY! Depending on the chart you are looking; if its a H1 chart, close positions when 10 pips profit. If using H4 chart, close positioons when 20 pips profit. When using Daily chart, close when 50-100 pips profit.
  • #35
  • Jul 5, 2007 12:23pm Jul 5, 2007 12:23pm
To address the post above, your ratio between EURUSD and USDCHF if nearly one. This is what your account balance would look like if you took a trade with 1 lot of each starting a little over a year ago. Notice it looks the same as the EURCHF which I've also included for comparison purposes. So what happens if EURCHF has a downturn? So does your account. Simple as that.
Attached Image (click to enlarge)
Click to Enlarge Name: EURCHF_Hedge.jpg Size: 33 KB
  • #36
  • Jul 5, 2007 12:51pm Jul 5, 2007 12:51pm
Quoting jon167
And why not hedge a profitable pair like XXX/JPY? Sell the pair in Forex and buy it in futures. You'll earn much money because in futures there is not rollover.
Futures count the interest in. Check it more carefully before you get any conclusion.

No risk, no profit. Always true.

Cheers.
凹凸 only
  • #37
  • Jul 23, 2007 9:29pm Jul 23, 2007 9:29pm
Does anyone have experience with this as a hedge: EUR/GBP & GBP/CHF ?

Mataf.net gives this pair a pretty high negative correlation rating, although it has been fluctuating. The swap rate is attractive on the GBP/CHF, and isn't destroyed with the EUR/GBP swap rate. During the last few weeks the negative correlation has actually been higher some days than the EUR/USD and USD/CHF.

Any ideas on how to decide how many lots of each pair to trade in this hedge? Would you use a ratio of any of these factors?

  1. The pip value of EUR/GBP is +double the the pip value of the GBP/CH

(in a mini account, each pip movement of the EUR:GBP is $2.06
and of the GBP/CHF is $.83)

  1. The price difference of the two pairs is great: .6700 and 2.4861
  2. The EUR/GBP is very range bound and moves slowly
  3. The current price of the EUR/CHF is 1.6651, and the pip value is $.83

Thanks for any ideas . . . .
Kimbo

  • #38
  • Aug 6, 2007 5:00pm Aug 6, 2007 5:00pm
This method actually benefits from a little volatility. Since EURUSD is one of the most liquid contracts in the world we get a steady wave like movement. USDCHF tends to spike out of balance creating inefficiency and profit potential. The objective is to find these inefficiencies and capitalize on them. I think this thread needs to consider it is possible to sell EURUSD and USDCHF as well as buy both. What I've noticed is it's a synthetic pair that does not mimic EURCHF but seems to flow in and out of profit more often than the EURCHF would. I have been working on indicators to eliminate drawdown almost completely.
The attached image suffered no more than 10 pips total drawdown. It was opened after UK industrial production according to Complex Common and All USD Pairs indicators. If anyone is worth their salt here I'm going to reignite an old private forum and we're going to break this trade down and make it more powerful than any trade anyone has ever seen. 90% accurate with no more than 15 pips drawdown and 7:1 reward to risk ratio.

The Forex market is conspiring to make me very wealthy.
Attached Image (click to enlarge)
Click to Enlarge Name: 20070806160246.jpg Size: 100 KB
It really is that easy.
  • #39
  • Aug 6, 2007 5:49pm Aug 6, 2007 5:49pm
Here is a quick study I created entering a trade at the beginning of UK session and closing at the US open. 7GMT-12GMT.
Notice the correl or pairs trade result is much different than the EURCHF result. This is just an example and I don't intend to go much farther back in history as this proves the point that correl trading or cross hedging is more muted than trading the product.
This example is not designed to be demonstrative of profit potential but rather risk difference using different instruments.
We're not taking pip values into account but as you can see it would not matter as the difference is so significant between the synthetic pair vs the cross pair.
Attached Image
It really is that easy.
  • #40
  • Oct 5, 2007 5:19am Oct 5, 2007 5:19am
I have read this thread and have a question that hopefully someone can answer. Also, I have been trading this method live for one month. I have made 10% and I realize that in that time the EURCHF has been steadily climbing which is the reason I have been successful. This is my question: I entered a trade at 7:43GMT 10/1/07 long for both the EURUSD and the USDCHF. On 12:00GMT 10/3/07 the combination of these two pairs was -11 pips. When I looked at the EURCHF at the same time, which was the highest the EURCHF has been since I opened the trade, it was +27 pips. If what I am understanding here is that trading the two pairs is the same as trading the EURCHF then why wouldn't I have been in a small profit? I think some of it has to do with the spreads but would it be that much? Would this be consider an inefficiency in the market?
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