Hedge trading spieler system derived from futures spread trading

Quoting jp_dubya

Disliked

The point I think that is being missed is that going short on EURUSD&USDCHF because the EURCHF went up and going long on EURCHF&USDCHF is counting on mean revision. When it runs away you are stuck. I think it would be better to use the general trend of EURCHF to pick your side while you aren't geared very highly so that you can handle moves against your hedged position. The two pairs move almost always against each other in the long term but that correlation, if it breaks down, will either be very prosperous for you or go heavy against you. Wouldn't it make sense to use the current correlation status found in http://www.mataf.net/en/forex/tradin...lation/detail/ see when it is not running near -1 and look for either a trend to continue, or try to pick a reversal........

Ignored

Quoting FrankTheTank

Disliked

I agree. There are so many assumptions which people take when placing a correlation trade, many of which are not valid.

I enjoy reading this thread but have "been there done that" before and at the end of the day, I dont think these methods are any more profitable or any less risky then the countless others posted on this forum (none of which I would trade with live money).

Ignored

Quoting tenantro

Disliked

Interesting thread.

I have one question though, for either spieler or anyone else that can provide an answer.

Spieler said in the 1st post:

"1) I am only trading eur/usd and usd/chf for 2 reasons .
First it is the most negatively correlated paire on forex on a long and short term basis.
Second, even if you find one more correlated it will be too much volatil for spread trading the way i do it (forget immediatly of thinking of gbp or jpy involved in spread trading, that is a killer account)."

I thought that if someone would have a portfolio composed of both eur/usd and usd/chf , because they have such high negative linear correlation, what they'd gain on one pair, they'd lose on the other.

Does this somehow not matter in regards to the particular method spieler uses? Is it the only case when high negative linear correlation is actually good?

Sorry if this sounds like a stupid question, I didn't read the whole tread ...is this some sort of arbitrage ?

Ignored

Quoting boeingdriver

Disliked

Good morning everyone.

So for today, I have a yesterday close at: 1.6192

so for a long I will wait for 1.6152 (-0.25%)

and for a short I will have to wait for 1.6132 (+0.25%)

I am still in the trade with 2 long lots, so if we had a retrace to 0.25% i will close 1 lot.

Anybody care to comment their positions (skyline, Richard for example!)

Have a great day,
BD

Ignored

Quoting spieler

Disliked

richard ;
I will never go more than 10 lots ...........

#I dont think these methods are any more profitable or any less risky then the countless others posted on this forum #

what i know is that i am profitable with it on a long term basis and that more than 90% of forex traders are loosing money

I started 10 years ago trading for a living ( before i had portfolio based on the buy and hold theory and made some profits due to luck and uptrending market).

I quickly became one of this crazy day trader ( day grinder i would say) trading in NY in trading rooms with more than 100 people.
I made huge profits, huge losses but finaly more gains than losses.

When volatility on nasdaq started to lower i began trading on futures outright with a bad begining ( loosing 30% in one month ;()
happily i recovered in 3 months and was very happy with that ( 3 months is nothing and i did not wanted to recover in 1 month because too dangerous)

Then i won again . Then spread trading on futures ( for a hedge fund and for private capital) with great results and then forex trading where i had a company doing Am and one of my trader ( an american girl ) find a loop hole in currenex soft to overleverage a position and finished crashing some accounts .
So now i am the only trader having no trust in others because on forex everything can happen and you never know the mental part of someone else.

I trained hundreds of people in europe and america , met all the technical analysis stars in us and european countries ( we were invited in the same place at the same moment to make conference on differents topics).

I made a lot of real time trading contests with my real money in front of hundreds of people with tv cameras so now my stress is almost under zero .

Why do i say that now?

because i saw many many many traders in my short career ( 10 years is nothing, it takes at least , with few exceptions, 5 years to start understanding what s going on in the market blowing their account , strating from zero and doing exactly same errors.

Enemy is you not the market . i have friends in a lot of brokers company now ( i am a good customer for them ) and they give me some interesting statisticals on their customers portfolios.
Even traders doing good for months blast their account with only 1 trade .

So last advice will be trade safe dont rush on everything market will be there tomorrow
And please do me a favor stop thinking you can make 100% profit per month and same for 20/30% as well .................

Ignored