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GBPJPY

  • #81
  • Jan 18, 2007 6:34am Jan 18, 2007 6:34am
Quoting fffx
Every body likes the Gbp/Jpy for its fat swap. One popular hedging strategy for this pair is to buy the pair in an interest bearing account and sell it in an interest free account, also called the 100% hedge. Like always feared and we are witnessing these days, the very high swing in the naked Gbp/Jpy can blow off any one of the accounts. To sedate this hyper pair, it would be worthwhile to consider selling 1.8 Gbp/Usd along with it in the interest bearing account and vice versa in the interest free account. This can considerably reduce the swings in both the accounts, while also adding to the total swap. Any thoughts on this would be appreciated.
Why not just buy it 5 minutes before the time the swap is accrued and then set your Take profit to Break even just after the swap. Or even a few pips more than Break even and also set a comfortable catostrophic stop, in case price does not reach break even.

This way you are out of the trade evey day and not exposed to the market volatility and only in long enough to take advantage of the swap.
  • #82
  • Jan 18, 2007 6:42am Jan 18, 2007 6:42am
Quoting smjones
Why not just buy it 5 minutes before the time the swap is accrued and then set your Take profit to Break even just after the swap. Or even a few pips more than Break even and also set a comfortable catostrophic stop, in case price does not reach break even.

This way you are out of the trade evey day and not exposed to the market volatility and only in long enough to take advantage of the swap.
The swap is arroung 3 pips / day. You need 2 pips spread.
Trading gbp jpy for swap alone is the best method for this kind of trading. You will have only a few moments when you can enter, to be safe, maybe once a month. The moment this month was last week. I think another couple of weeks will pass until a new good entry point.
Then, if you have a good entry, just find moments to add, never close.
Try hard, think fast, die young
  • #83
  • Jan 18, 2007 6:43am Jan 18, 2007 6:43am
problem is you're paying the broker spread (about 10 on GBPJPY) each time, although I did open long GBPJPY at 9.59GMT last night and short CHFJPY at 10.01pm, which I thought was a little cheeky!
TRADE FOR SWAP
  • #84
  • Jan 18, 2007 6:46am Jan 18, 2007 6:46am
Quoting dof
The swap is arroung 3 pips / day. You need 2 pips spread.
Trading gbp jpy for swap alone is the best method for this kind of trading. You will have only a few moments when you can enter, to be safe, maybe once a month. The moment this month was last week. I think another couple of weeks will pass until a new good entry point.
Then, if you have a good entry, just find moments to add, never close.
Well maybe, but you could always do the trade safely on Wednesday, when the swap is three times normal.

Also, go back and look and you will see that there is always a range in the daily price of more than the (10 at most) pip spread, meaning that you are pretty well assured of closing at BE.
  • #85
  • Jan 18, 2007 6:54am Jan 18, 2007 6:54am
I have been testing this method in demo accounts and i like it.

The problem as some of you have called, is the spread.
If you have a 10 pip spread and 2 account that will be 20 pips because you have to close and then open again in both acconts.

Waiting for the price to move to enter in the same price at both accounts could be dangerouse because you could enter one side and after a reversal not get executed in the other account.
Of couse, if we use some analysis we can do it but is not a 100% sure thing..

The first post mention something about the gbp/usd.. i will have to test this, gbp is another volatile pair... i will study that and then let you know.

Dan.
  • #86
  • Jan 18, 2007 6:55am Jan 18, 2007 6:55am
Quoting smjones
Well maybe, but you could always do the trade safely on Wednesday, when the swap is three times normal.

Also, go back and look and you will see that there is always a range in the daily price of more than the (10 at most) pip spread, meaning that you are pretty well assured of closing at BE.
Depends on your broker. Do you think if you enter 1 minutes before roleover they will give you 1 day of interest? Oanda doesn't.

Anyway i think gbp jpy is one of the best pairs to trade because is trending so much, and trend traiding it's easier for some people.
Try hard, think fast, die young
  • #87
  • Jan 18, 2007 6:59am Jan 18, 2007 6:59am
Quoting dof
Depends on your broker. Do you think if you enter 1 minutes before roleover they will give you 1 day of interest? Oanda doesn't.
It has worked for me for the last year . So, yes I do... However, to set the record straight, I said 5 minutes, not 1 minute.
  • #88
  • Jan 18, 2007 7:00am Jan 18, 2007 7:00am
Quoting smjones
It has worked for me for the last year . So, yes I do... However, to set the record straight, I said 5 minutes, not 1 minute.
What broker?
Try hard, think fast, die young
  • #89
  • Jan 18, 2007 7:01am Jan 18, 2007 7:01am
Quoting dof
What broker?
Ah, well that would not be very wise of me to say, now would it?
  • #90
  • Jan 18, 2007 7:02am Jan 18, 2007 7:02am
Quoting smjones
Ah, well that would not be very wise of me to say, now would it?
I will tell this though, there are several.. Just open a small acount and test them
  • #91
  • Jan 18, 2007 7:02am Jan 18, 2007 7:02am
Quoting smjones
Ah, well that would not be very wise of me to say, now would it?
It would be nice
Try hard, think fast, die young
  • #92
  • Jan 18, 2007 7:03am Jan 18, 2007 7:03am
Quoting smjones
I will tell this though, there are several.. Just open a small acount and test them
If you just go and ask them, I cannot imagine a quicker way to see this dry up.
  • #93
  • Jan 18, 2007 7:06am Jan 18, 2007 7:06am
Quoting smjones
If you just go and ask them, I cannot imagine a quicker way to see this dry up.
But to be honest, I have never really liked this type of trade, because, like straddle news trading, it is never going to last. The market will change and this will no longer work. I prefer real trading to this approach. But, I have made a good amount of money from it.

Ps, instead of complaining about brokers, I look for their weaknesses and exploit them.
When they close one door, they always unknowingly open another..
  • #94
  • Jan 18, 2007 7:09am Jan 18, 2007 7:09am
Quoting smjones
But to be honest, I have never really liked this type of trade, becasue, like straddle news trading, it is never going to last. The market will change and this will no longer work. I prefer real trading to this approach. But, I have made a good amount of money from it.

Right, but it doesn't have to be the main strategy, but as long as it's working, just for fun, and of course money.
Try hard, think fast, die young
  • #95
  • Jan 18, 2007 7:13am Jan 18, 2007 7:13am
Quoting dof
Right, but it doesn't have to be the main strategy, but as long as it's working, just for fun, and of course money.
Agreed... There is always another way to look at a restriction placed on a person. It just takes a little thought looking at the problem from a broader perspective.
  • #96
  • Jan 18, 2007 7:20am Jan 18, 2007 7:20am
Quoting smjones
Agreed... There is always another way to look at a restriction placed on a person. It just takes a little thought looking at the problem from a broader perspective.
Well, enjoy the ride!
Try hard, think fast, die young
  • #97
  • Jan 18, 2007 7:58am Jan 18, 2007 7:58am
The 100% hedge has been working much better on a lower volatility pair.

So far, I've had my hedge open for about 122 days and I still have a little room before I have to worry about the cost of rebalancing the hedge.

The reason the GBP/JPY trade works they way scott is doing is because that trendline has been pretty much nothing but up for the last 5 years. Everytime we feel like we've hit a top, the thing just keeps busting through. Any trade that would have you buy the GBP/JPY (or the GBP for that matter) would have made you money in 2006.

The reason why the GBP/JPY doesn't work for the 100% hedge is for the same reason. unfortunately, the volatility of the pair is pretty amazing. It is cost prohibitive to take on any substantial position because the typical 5-day swing on the GBP/JPY is about 600 pips, and it's easy enough to have 1000 pip swings over the course of only a week. With the spread of 7-10 pips, the interest earned in 5 days can't overcome the total spread.
  • #98
  • Jan 18, 2007 8:04am Jan 18, 2007 8:04am
yes but you can overcome a lot of the potential drawdown by hedging with a highly correlated pair like CHFJPY.
TRADE FOR SWAP
  • #99
  • Jan 18, 2007 10:02am Jan 18, 2007 10:02am
Quoting cgldsmth
yes but you can overcome a lot of the potential drawdown by hedging with a highly correlated pair like CHFJPY.
cgldsmth ,
why not hedging with eurjpy opening only 1 sell position instead to open 2 position with chfjpy ? (eurjpy seems to be more correlated to gbpjpy looking at metaf.net site)
  • #100
  • Jan 18, 2007 10:06am Jan 18, 2007 10:06am
I think we have gone off the thread Topic,which is 'Hedging Gbp/Jpy with Gbp/Usd and then selling the same in the interest free account'. The volatility is very low here and the Swap is enhanced by the GBP/Usd sell.
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