The brokers that I need have 400:1 and trade the GBP/NZD. This eliminates most brokers immediately.
Every broker has positioned itself so that it cannot loose. fair enough.
IF we go for high leverage 1:200 and above the interest rates comes down significantly.
IS there any genuine club where we could put in all our money and go with less leverage and get more interest
IF we go for high leverage 1:200 and above the interest rates comes down significantly.
IS there any genuine club where we could put in all our money and go with less leverage and get more interest
Hey folks,
Though about North Finance a bit more. Earlier on I commented negatively on their big spreads between the bid/offer swap rates almost 2:1 actually which is way out of proportion to most other brokers. Anyhow, I suppose when given lemons one should try make some lemonade
I took another look and compared their rates on a few pairs to that of FXCM which at this point is the broker I have found to be paying the most interest (even more than my live broker Oanda) and also allow credit card funding with NO charge for withdrawing and depositing – the credit card company I deal with also charges no fees for deposits done via the internet like from FXCM et al and also charges no fee for transferring funds to such accounts, so no cost there either.
Now here is a lemon to lemonade solution. On a 100K GBPJPY SHORT North Finance charges you $15.57 per day on the other side FXCM pays you on a LONG a nice $26.10. You net $10.53 per 100K per day. So yes, sure, NF’s swap interest is not the best, but by looking at it this way, one can actually use that against them as to speak.
Of course these kind of tricks rely heavy on the cost factor to run such an act due to the necessary balancing that needs to be done often with such volatile pairs if one does not have deep pockets – like me for example
So lets look at the costs involved. One would start of with cash credit in a credit card. Transfer X amount of $ to the FXCM account and incur ZERO charges, the FXCM half never has any cost both with them or at the card company (unless you go in to debit – bad thing ! ). To get money to NF on the other hand one needs to work this via eGold. To get funds to e-Gold one needs to buy it via some merchant (finding a cheap reliable merchant will be key here). So far I found one that would sell you e-Gold for free. Cool now you have eGold, to transfer it to NF is simple as well and the cost of doing so is capped to an incredible low $1.04 no matter how large you go. On the NF side there are no charges for depositing/withdrawing either…so at this point in time you have two funded accounts and it only cost you $1.04 to set up.
This is all fine and well until you need to get funds out of the eGold half to move to FXCM for example. You would instruct NF to release some money to eGold, no NF charge, eGold charges their $1.04. So now the $$$ is in your eGold account. You now need to get it to your credit card account again. This is where it gets a bit tricky and “expensive”. I have found one merchant who would buy my egold for free, but to wire the $$$ to my account they charge a flat fee of $15.00, Goldux they are called. Finding merchants that can be cheaper and still reliable and get the money to the credit card account fast is key here so any suggestions of better priced merchants would be great please.
To move the funds from the card to FXCM from here of course would be free then.
These minimal cost as stated above was researched over last weekend and are up to date as far as I know, although I might have missed something, I am confident I have not.
So I suppose with a carefully crafted trade size on both accounts with some spare $ in each to spare for those dippy days and a relatively cheap way to swap funds around, the received $10.53 per day might not seem that bad. Also bear in mind the costs mentioned are all capped, they do not change in accordance with trade size…thus the larger your trades, the more money you net in the end because your costs to run this gold digging exploration does not escalate when you transfer larger sums of $.
CAUTION #1: Just be very careful when comparing these brokers, like I said above FXCM seems to pay the most interest, but just comparing one or two pairs between brokers is not enough, here is a great example seeing that the initial poster was referring to NZDJPY.
North Finance Swap rates:
Trade 100K NZDJPY Long and receive $6.87 per day
Trade 100K NZDJPY Short and pay ($18.30) per day
FXCM Swap Rates:
Trade 100K NZDJPY Long and receive $13.00 per day
Trade 100K NZDJPY Short and pay ($14.00) per day
In this example, as expected one would receive better payment on long trades from FXCM, but going Short with them, will also be less costly than NF…where as with my GBPJPY example above, both swap bid and offer prices are lower at NF, but not in the case with NZDJPY…so really look carefully when doing the comparisons.
CAUSTION #2: Do not attempt to do correlation studies using lower time frame data from any Metatrader platform. Here I mean time frames less than 30 minutes. Take the 5min for example, one pair would have a bar ending at say 12:00, but the other pair would miss that one and any correlation study from there on out will be USELSESS unless you re-align the data somehow or move it to an external application like Excel and fix it there with synthetic data replacing the missing spots. It’s a real pain, but I have found that this is not only inherent to Metatrader, I have been testing other platforms as well, like DealBookFX and VisualTrader, and they all have the same problem, obviously the higher you move up in the time frame, the less problems you have. I see many indicators and EA’s based on 1 minute, 5min charts etc…I totally blows my mind to think of how horribly wrong those things can go with miss-aligned data and how false any back testing/forward testing even can be using them on these lower less reliable time frame data. Non of the results can really be based on correlation so results are more coincidental or based on some other inherent characteristic, but NOT correlation due to miss-aligned data. This phenomena had me going crazy in the beginning some years ago, because I would get data display one way now, and in an hour from now the whole thing would look different.
Also as mentioned by a previous poster, also trading a second pair or more pairs which are correlated to the main interest bearing pair, but charges less swap could help. I have done correlation studies for years now on many pairs and for the fellow with little $ resources it is not very viable as you need a good fund base to sustain the dips and wait for the positive swings and some of them can be quite wide. Because you have little $ resources, you will only make peanuts, just not worth the time unless you have other mean to sustain your lifestyle and earn a living. This “swing width” can be managed by trade sizing for example, but only to a certain extent. The width is mostly determined by the break in correlation PLUS constantly changing volatility in those correlated pairs as well, two things a small trader does not want to go up against.
Using more than one pair however could be used for a different purpose, which could be to decrease the overall volatility of the net open position. One would want this to happen because it would decrease the amount of “money swapping” between brokers a great deal, and if done properly could leave you stable without having to balance accounts for very long periods of time. The longer these swapping intervals are apart, the less cost, the more profits!!!
These of course are just my humble opinions and I do not mean to step on anybodies toes, just wanted to toss my penny into the wishing well to.
What do you think? Any ideas on cheaper e-Gold merchants?
Best wishes to all !
Mecer
Though about North Finance a bit more. Earlier on I commented negatively on their big spreads between the bid/offer swap rates almost 2:1 actually which is way out of proportion to most other brokers. Anyhow, I suppose when given lemons one should try make some lemonade
I took another look and compared their rates on a few pairs to that of FXCM which at this point is the broker I have found to be paying the most interest (even more than my live broker Oanda) and also allow credit card funding with NO charge for withdrawing and depositing – the credit card company I deal with also charges no fees for deposits done via the internet like from FXCM et al and also charges no fee for transferring funds to such accounts, so no cost there either.
Now here is a lemon to lemonade solution. On a 100K GBPJPY SHORT North Finance charges you $15.57 per day on the other side FXCM pays you on a LONG a nice $26.10. You net $10.53 per 100K per day. So yes, sure, NF’s swap interest is not the best, but by looking at it this way, one can actually use that against them as to speak.
Of course these kind of tricks rely heavy on the cost factor to run such an act due to the necessary balancing that needs to be done often with such volatile pairs if one does not have deep pockets – like me for example
So lets look at the costs involved. One would start of with cash credit in a credit card. Transfer X amount of $ to the FXCM account and incur ZERO charges, the FXCM half never has any cost both with them or at the card company (unless you go in to debit – bad thing ! ). To get money to NF on the other hand one needs to work this via eGold. To get funds to e-Gold one needs to buy it via some merchant (finding a cheap reliable merchant will be key here). So far I found one that would sell you e-Gold for free. Cool now you have eGold, to transfer it to NF is simple as well and the cost of doing so is capped to an incredible low $1.04 no matter how large you go. On the NF side there are no charges for depositing/withdrawing either…so at this point in time you have two funded accounts and it only cost you $1.04 to set up.
This is all fine and well until you need to get funds out of the eGold half to move to FXCM for example. You would instruct NF to release some money to eGold, no NF charge, eGold charges their $1.04. So now the $$$ is in your eGold account. You now need to get it to your credit card account again. This is where it gets a bit tricky and “expensive”. I have found one merchant who would buy my egold for free, but to wire the $$$ to my account they charge a flat fee of $15.00, Goldux they are called. Finding merchants that can be cheaper and still reliable and get the money to the credit card account fast is key here so any suggestions of better priced merchants would be great please.
To move the funds from the card to FXCM from here of course would be free then.
These minimal cost as stated above was researched over last weekend and are up to date as far as I know, although I might have missed something, I am confident I have not.
So I suppose with a carefully crafted trade size on both accounts with some spare $ in each to spare for those dippy days and a relatively cheap way to swap funds around, the received $10.53 per day might not seem that bad. Also bear in mind the costs mentioned are all capped, they do not change in accordance with trade size…thus the larger your trades, the more money you net in the end because your costs to run this gold digging exploration does not escalate when you transfer larger sums of $.
CAUTION #1: Just be very careful when comparing these brokers, like I said above FXCM seems to pay the most interest, but just comparing one or two pairs between brokers is not enough, here is a great example seeing that the initial poster was referring to NZDJPY.
North Finance Swap rates:
Trade 100K NZDJPY Long and receive $6.87 per day
Trade 100K NZDJPY Short and pay ($18.30) per day
FXCM Swap Rates:
Trade 100K NZDJPY Long and receive $13.00 per day
Trade 100K NZDJPY Short and pay ($14.00) per day
In this example, as expected one would receive better payment on long trades from FXCM, but going Short with them, will also be less costly than NF…where as with my GBPJPY example above, both swap bid and offer prices are lower at NF, but not in the case with NZDJPY…so really look carefully when doing the comparisons.
CAUSTION #2: Do not attempt to do correlation studies using lower time frame data from any Metatrader platform. Here I mean time frames less than 30 minutes. Take the 5min for example, one pair would have a bar ending at say 12:00, but the other pair would miss that one and any correlation study from there on out will be USELSESS unless you re-align the data somehow or move it to an external application like Excel and fix it there with synthetic data replacing the missing spots. It’s a real pain, but I have found that this is not only inherent to Metatrader, I have been testing other platforms as well, like DealBookFX and VisualTrader, and they all have the same problem, obviously the higher you move up in the time frame, the less problems you have. I see many indicators and EA’s based on 1 minute, 5min charts etc…I totally blows my mind to think of how horribly wrong those things can go with miss-aligned data and how false any back testing/forward testing even can be using them on these lower less reliable time frame data. Non of the results can really be based on correlation so results are more coincidental or based on some other inherent characteristic, but NOT correlation due to miss-aligned data. This phenomena had me going crazy in the beginning some years ago, because I would get data display one way now, and in an hour from now the whole thing would look different.
Also as mentioned by a previous poster, also trading a second pair or more pairs which are correlated to the main interest bearing pair, but charges less swap could help. I have done correlation studies for years now on many pairs and for the fellow with little $ resources it is not very viable as you need a good fund base to sustain the dips and wait for the positive swings and some of them can be quite wide. Because you have little $ resources, you will only make peanuts, just not worth the time unless you have other mean to sustain your lifestyle and earn a living. This “swing width” can be managed by trade sizing for example, but only to a certain extent. The width is mostly determined by the break in correlation PLUS constantly changing volatility in those correlated pairs as well, two things a small trader does not want to go up against.
Using more than one pair however could be used for a different purpose, which could be to decrease the overall volatility of the net open position. One would want this to happen because it would decrease the amount of “money swapping” between brokers a great deal, and if done properly could leave you stable without having to balance accounts for very long periods of time. The longer these swapping intervals are apart, the less cost, the more profits!!!
These of course are just my humble opinions and I do not mean to step on anybodies toes, just wanted to toss my penny into the wishing well to.
What do you think? Any ideas on cheaper e-Gold merchants?
Best wishes to all !
Mecer
Mecer,
Thanks the info.
Do you know what is the margin required to open 1 lot(100,000) in FXCM with how much leverage.
In NF with 1:500 Leverage the margin for GBPJPY is 263.90 with daily interest of 19.93 when you go long.
So on a 1:200 leveraged account in FXCM we would require double the margin than NF..i'm not sure about this as no info i could found in fxcm or i have to download the demo software or give my all personall info to live chat person
Your strategy is interesting but instead of hedging if you go long on one account with the same margin..with keeping the drawdown to 1500 PIPs or more..it could be better.
Thanks the info.
Do you know what is the margin required to open 1 lot(100,000) in FXCM with how much leverage.
In NF with 1:500 Leverage the margin for GBPJPY is 263.90 with daily interest of 19.93 when you go long.
So on a 1:200 leveraged account in FXCM we would require double the margin than NF..i'm not sure about this as no info i could found in fxcm or i have to download the demo software or give my all personall info to live chat person
Your strategy is interesting but instead of hedging if you go long on one account with the same margin..with keeping the drawdown to 1500 PIPs or more..it could be better.
- #28
- Edited 5:24am Feb 2, 2007 5:08am | Edited 5:24am
Hi SpiderForex
I took the following swap rates from the FXCM platform for you, hope they come out ok here on the post. These are in $/100000k Base currency.
Ok, see attachments, for both FXCM & FXSol, not sure how theirs is, working, but anyway, there it is.
“…Your strategy is interesting but instead of hedging if you go long on one account with the same margin..with keeping the drawdown to 1500 PIPs or more..it could be better…”
Could you explain this a bit to me, did not have my coffee yet
Also, do you mean NF pays more Swap the lower your margin ratio is, like visible in the FXSol screenshot? I have seen this at some brokers, was not aware they are doing it also.
Best wishes,
Mecer
I took the following swap rates from the FXCM platform for you, hope they come out ok here on the post. These are in $/100000k Base currency.
Ok, see attachments, for both FXCM & FXSol, not sure how theirs is, working, but anyway, there it is.
“…Your strategy is interesting but instead of hedging if you go long on one account with the same margin..with keeping the drawdown to 1500 PIPs or more..it could be better…”
Could you explain this a bit to me, did not have my coffee yet
Also, do you mean NF pays more Swap the lower your margin ratio is, like visible in the FXSol screenshot? I have seen this at some brokers, was not aware they are doing it also.
Best wishes,
Mecer
Yes...going demo at first is good...as everything looks good in theory..but when we go live..everything turns red and the PIPS move slowly.
In co-relation..I ventured many forums and mataf.net site and came up with exotic currencies for hedge.
I'm in demo right now and so far looks ok.
buy USDDKK/Sell EURUSD , buy USDSEK/Sell EurUSD, buy USDNOk/Sell EurUSD
USDDKK have -100 co-relation with eurusd, and its moves perfectly opposite and the interest on both currencies are positive. for sek and nok its more aounr -90 , -95
In NF on 10,000 0.10 lot interest is for DKK 0.36 eurusd 0.15, for sek 0.41, and for nok 0.31.
IF the market moves extreme like its doing today on eurusd, everthying gets positive else the market settles for small negative price.
the spreads are also low..all looks good..but i will do demo for couple of weeks before going live as when everything looks good..we need to be more carefull.
and the PIPS move slowly.In co-relation..I ventured many forums and mataf.net site and came up with exotic currencies for hedge.
I'm in demo right now and so far looks ok.
buy USDDKK/Sell EURUSD , buy USDSEK/Sell EurUSD, buy USDNOk/Sell EurUSD
USDDKK have -100 co-relation with eurusd, and its moves perfectly opposite and the interest on both currencies are positive
. for sek and nok its more aounr -90 , -95In NF on 10,000 0.10 lot interest is for DKK 0.36 eurusd 0.15, for sek 0.41, and for nok 0.31.
IF the market moves extreme like its doing today on eurusd, everthying gets positive else the market settles for small negative price.
the spreads are also low..all looks good..but i will do demo for couple of weeks before going live as when everything looks good..we need to be more carefull.
- #37
- Feb 3, 2007 8:36am Feb 3, 2007 8:36am
- Joined Mar 2004 | Status: Senior Member | 1,634 Posts
Greetings,
I just found this thread and downloaded some of the spread sheets. Thank you for doing this work.
I saw a couple of things that I wondered about regarding the research into brokers:
1. Unless it was corrected and I missed it, Oan da will allow you to change your leverage. I did it last week. Go to the main charting/account screen there is a tab 'Account' in the upper left. You can do it there.
2. Also re: Oan da, your money in your account earns interest even if you don't have a trade running. Interest is earned on your balance, regardless if you are long or short. This should be taken into consideration. I dont believe Fxcm does that. I also use CMS VT which does not have account interest. You might want to check them out for pretty good rates on the carry (but only so so on the spread).
Interest-ed,
Lou
PS Just tried looking at Oan da ... but they are having server maintenance I think.
I just found this thread and downloaded some of the spread sheets. Thank you for doing this work.
I saw a couple of things that I wondered about regarding the research into brokers:
1. Unless it was corrected and I missed it, Oan da will allow you to change your leverage. I did it last week. Go to the main charting/account screen there is a tab 'Account' in the upper left. You can do it there.
2. Also re: Oan da, your money in your account earns interest even if you don't have a trade running. Interest is earned on your balance, regardless if you are long or short. This should be taken into consideration. I dont believe Fxcm does that. I also use CMS VT which does not have account interest. You might want to check them out for pretty good rates on the carry (but only so so on the spread).
Interest-ed,
Lou
PS Just tried looking at Oan da ... but they are having server maintenance I think.