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Hedge trading spieler system derived from futures spread trading

  • #1,441
  • Sep 1, 2008 2:01pm Sep 1, 2008 2:01pm
While it is true that the value of 1 EURUSD when multiplied by 1 USDCHF = the value of EURCHF(very close). Your account value will be down 10k (on a full contract) if your long EURCHF and it drops 1000 pips.

Now imagine being long EU 1 contract and UC 1 1/2 contracts at the exact same time as the EURCHF drops 1000 pips. Basically no account value change once the 2 pairs stabilize.

At the moment EURCHF has dropped 1000 pips if you multiply 1 EURUSD and 1 USDCHF it will still equal (very close) the value of EURCHF.

So it is not the same.
BR

Quoting sabbb
Thanks Spieler for sharing this system but something is not clear for me. If you open this position it is (almost) equivalent to be long on eur/chf . This is not my opinion it is a mathematic calculation. There is no “market neutral”. IN LONG PERIOD eur/chf can have a divergence very greater than 0,45% or 0,60% and if I want average I can average a lot of times not only 2 or 3 times. In 2007 eur/chf had a trend for 20%. I think it can be a good system but it is simply “go long on eur/chf and average”.
  • #1,442
  • Sep 1, 2008 2:02pm Sep 1, 2008 2:02pm
FXSNIPE: the answer of your question is on page number 1 in Spieler's post number 1...
  • #1,443
  • Sep 1, 2008 2:14pm Sep 1, 2008 2:14pm
If it were me, I would continue adding and closing positions based on the price levels that would have been executed if done exactly as the method call for. Kind of like getting positive slippage or a lucky fill.

BR

Quoting corvogrigio
So what would u do if u were in my shoes? I entered at 1.6069 (-0.55%) and as 0.25% is 40 pips u would wait until it reaches 1.6109? whenever it happens?
  • #1,444
  • Sep 1, 2008 2:26pm Sep 1, 2008 2:26pm
Quoting Big1red9
While it is true that the value of 1 EURUSD when multiplied by 1 USDCHF = the value of EURCHF(very close). Your account value will be down 10k (on a full contract) if your long EURCHF and it drops 1000 pips.

Now imagine being long EU 1 contract and UC 1 1/2 contracts at the exact same time as the EURCHF drops 1000 pips. Basically no account value change once the 2 pairs stabilize.

At the moment EURCHF has dropped 1000 pips if you multiply 1 EURUSD and 1 USDCHF it will still equal (very close) the value of EURCHF.

So it is not the same.
BR
But it doesn't change anything that if EURCHF will be in strong down trend, then enter long EURUSD and USCHF will bring you loss till downtrend on cross pair end. All this kind of strategies work best when cross pair is ranging. That's why it is not so popular on currancies but very popular on stocks, because of better correlation.
  • #1,445
  • Sep 1, 2008 2:28pm Sep 1, 2008 2:28pm
Quoting Big1red9
If it were me, I would continue adding and closing positions based on the price levels that would have been executed if done exactly as the method call for. Kind of like getting positive slippage or a lucky fill.

BR
Thanx for giving me ur opinion BR!

Anyway ur words sound a bit unclear to me (I'm not a native english speaker) could u elaborate further? i would appreciate so much.

Thanks in advance
CG
  • #1,446
  • Edited 2:44pm Sep 1, 2008 2:40pm | Edited 2:44pm
CG,

Your welcome.

If my plan was to buy a pair at 200.00 and sell it at 220.00. BUT
when I placed my order to Buy it was filled at 210.00 I would still be selling at 220.00.

Trading plan does not change because of fill.
BR

Quoting corvogrigio
Thanx for giving me ur opinion BR!

Anyway ur words sound a bit unclear to me (I'm not a native english speaker) could u elaborate further? i would appreciate so much.

Thanks in advance
CG
  • #1,447
  • Sep 1, 2008 3:47pm Sep 1, 2008 3:47pm
hi spieler and all members

I know that u wrote many times that trading eur/usd and usd/chf isn't the same as trading eur/chf. But as i read it carefully u wrote only two/three advantages why it;s better to use these 2 pair instead of eur/chf -
FIRST ADVANTAGE ( the most important and the only reason why it;s better to use 2 pairs instead of one in my opinion ) - when u enter or exit the trade u can do it not at the same time but buy/sell one currency earlier and second currency later and earn some pips more. Second - psychological reason( we have all strong psyche, dont worry about us. And Third - u wrote that u can earn more from swaps when u use 2 pairs instead of one.


I will write now why i use EUR/CHF instead of using both EUR/USD and USD/CHF and why i think it;s better to use only eur/chf to trade your system

Firstly
U have 2 times lower margin used when u trade only EUR/CHF
lets say i buy 1 lot eur/chf so my broker Oanda( leverage 1:50, euro currency) takes 2000 Euro margin.
if i buy 1 lot eur/usd and 1.5 or 1.4 usd/chf margin used will be 4000 EURO ( 2000 Euro for eur/usd pair and about 2000 Euro for usd/chf)
It;s big advantage in this strategy when u have more free margin especially when big trend with no pullbacks will come.
Secondly
U get more swaps when u use only EUR/CHF. Use Oanda calculator to check it. If u buy ( long) 1 lot eur/usd and buy 1.4lot usd/chf and u keep it 24 hours u get: 5.99 USD for eur/usd and -1.53 USD for usd/chf so u are +4.46 USD daily. IF u buy 1lot eur/chf and keep it 24 hours u get +6.59 USD. IT;s quite big difference.
Thirdly
when u use eur/chf u dont have to be all time in front of computer and not be worry that u miss your entry/exit point because u can use Limit Order to take your "take profit" when price will come back 0.25 or limit order also for entry. Sometimes price is 10 pips from your exit level and u have to go to bed or somewhere and u cant wait so u can use limit order and be sure that u won't miss your exit point. When u trade your 2 pairs eur/usd and usd/chf u can;t do it or u have to use EA to do it.
sry for my english


what do u think about it guys?? spieler??
  • #1,448
  • Edited 8:54pm Sep 1, 2008 5:38pm | Edited 8:54pm
Sorry but i cannot spend my time answering questions i have already answer several times.
Let me makes some things clearer:


craigaudio
Member

I have already answered in details to the period you are talking about and i get through it without any problem.

Generally i am ok with the idea that gravity center of eur/chf is not static ( unfortunatly ) and is always mooving. But we are enough correlated to be abble by working position to make profits balancing losses due to a big trend against first lots.
I have never said that you make no loss at all, you can decide a max dd of course and you can sometimes cut some lots with a loss ( sometime what i call a trade will be positiv anyway because of working positions)

Trading eur/chf is doable
As for the swap, one of my broker is giving interests when you are long usd/chf and not charging like oanda so with this broker you win more on the paires.
The one leg thing is not just a #gadget# it helps you making very nice outright trades by entering in the direction of the moove .

As for the margin and exit i am ok with you and as soon as you keep the core part of the system ( working position and sound mm conservative approach) you can do what you explain .
As for the psychological part i am not that sure you have enough worked on this part as i have never met a trader 100% confortable with that .( of course they always think they are fine with it)
  • #1,449
  • Sep 1, 2008 5:44pm Sep 1, 2008 5:44pm
kingjaxe,

Allow me to say a few words with regards to your post.

Spieler had put up a very detailed explanation in post #1 and along the way he also mentioned why he don't trade EURCHF. IMO you got to read again post #1 and the whole thread.

IMO, this method is very different and I wouldn't want to re-invent anything that is not spoilt or faulty. This method works well ! ! !(other readers can vouch for this)

I would like to just focus on getting into the trades when the levels are reached. No point of me to try to think that I can do it differently which is only my moment thinking.

Spieler has shown us all the way as he puts it... trading cannot be as simpler as this.

My suggestion to you is practise this method or if you still think that your idea can work better, try out yourself out of this thread and start a new thread to tell everyone.

Kindly accept my apology if you find my reply offending to you.
  • #1,450
  • Sep 1, 2008 9:19pm Sep 1, 2008 9:19pm
161 resistance now

3 times touched yesterday

if broken gonna flye above
  • #1,451
  • Sep 1, 2008 10:11pm Sep 1, 2008 10:11pm
Seat-belt fastened...Goggles on

Quoting spieler
161 resistance now

3 times touched yesterday

if broken gonna flye above
  • #1,452
  • Sep 1, 2008 11:23pm Sep 1, 2008 11:23pm
Is anyone long from last week Monday 25/8 @ 1.6193?

I am demoing this but IMO this position hasnt got back to 0 yet?
  • #1,453
  • Edited Sep 2, 2008 12:12am Sep 1, 2008 11:47pm | Edited Sep 2, 2008 12:12am
Hello, I've entered two long trades yesterday, one on -40%, the other on about -60% eurchf divergence. as I've followed the thread the entries were more or less equal to the ones that spieler has entered also. but now the exit. I exited this morning according to SpielersHedgeDivergence_v3 indicator which was on +/-0%, on 7.15 gmt with a loss of about 30cents, since I'm trading micros. But mathematically I've made at least +10 pips. ok, if we subtract four spreads of 1,5 cents I should still be in +4 pips.

eurusd long
1stentry 1,4638
2nd entry 1,4614
exit 1,4559
-134pips

usdchf long
1st entry 1,0982
2nd entry 1,0994
exit 1,1036
+96 pips x 1,5 = +144 pips

pips total: +10

what have I done wrong? or have you obtained a simmilar result?
have I choses a wrong exit? can anybody please unconfuse me?


Thanks in advance.


Regards
  • #1,454
  • Sep 2, 2008 12:26am Sep 2, 2008 12:26am
Quoting redart007
Is anyone long from last week Monday 25/8 @ 1.6193?

I am demoing this but IMO this position hasnt got back to 0 yet?
I have got one Long position from 25/8 left, too.
Until today I worked another Long position for a "+0,25%" profit.
(2nd lot long -0,50% to -0,25%)

Yesterday I opened a 2nd Lot again. I'm still confident on this whole trade.
As I already booked a profit and now I'm waiting for the 2nd lot to run into profit.
Maybe then I close the very first Lot with a small loss (which is a profit for the overall trade)

Hope it helps
  • #1,455
  • Sep 2, 2008 1:16am Sep 2, 2008 1:16am
Good morning everyone!

it seems that 1.6100 has just been broken!

have a good trading day...

BD
  • #1,456
  • Sep 2, 2008 1:25am Sep 2, 2008 1:25am
Quoting ashes
Hello, I've entered two long trades yesterday, one on -40%, the other on about -60% eurchf divergence. as I've followed the thread the entries were more or less equal to the ones that spieler has entered also. but now the exit. I exited this morning according to SpielersHedgeDivergence_v3 indicator which was on +/-0%, on 7.15 gmt with a loss of about 30cents, since I'm trading micros. But mathematically I've made at least +10 pips. ok, if we subtract four spreads of 1,5 cents I should still be in +4 pips.

eurusd long
1stentry 1,4638
2nd entry 1,4614
exit 1,4559
-134pips

usdchf long
1st entry 1,0982
2nd entry 1,0994
exit 1,1036
+96 pips x 1,5 = +144 pips

pips total: +10

what have I done wrong? or have you obtained a simmilar result?
have I choses a wrong exit? can anybody please unconfuse me?


Thanks in advance.


Regards
I closed my second trade with +35 pips.
The first trade I didn`t close, it`s a long trade with positive swap, I can wait. ....
Now, this trade is also positive.

A lot of pips
Steffen
  • #1,457
  • Sep 2, 2008 1:32am Sep 2, 2008 1:32am
And Well Broken Now ! @ 1.6113!
  • #1,458
  • Edited 11:06am Sep 2, 2008 1:40am | Edited 11:06am
Thank you Steffen for your reply. ... maybe I should have waited to close the first like you did?

I have opened now shorts at +28% eurchf divergence at 1,6114

eurusd 1,4509

usdchf 1,1107

let's see how this will work out.


edit 19:00 gmt


close at eurch divergence at +0,01% at 1,6072

eurusd 1,4528 -18 pips

usdchf 1,1064 +43pips x 1,5 = 60 pips

total: + 42 pips

total reduced to +39 pips after taking 1,5+1,5 pips spreads off


Regards
  • #1,459
  • Edited 2:02am Sep 2, 2008 1:46am | Edited 2:02am
Well as we saw some momentum and speed, I will wait a little to close the long position i opened yesterday and i will even wait more to open a short...

We will see which idea is better...

BD

PS: seeing some correction now... will be 1.6115 broken?
  • #1,460
  • Sep 2, 2008 2:22am Sep 2, 2008 2:22am
My first long position from yesterday I didn`t close by 1.6110, what's +-0%.
Now I do not open a short position, I'm waiting until 50%.
Have a nice day, I drink a coffee and wait.
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