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Hedge trading spieler system derived from futures spread trading

  • #2,561
  • May 19, 2009 5:25pm May 19, 2009 5:25pm
I've read this thread from start to finish and I have to call bulls**t. This is not a hedge trading system, but a long winded way of range trading EUR/CHF. How can anyone in their right mind not realise that if you are "dollar neutral" in the two pairs EUR/USD and USD/CHF then you have a directional postion in EUR/CHF with the exact same risk. And dont start the "its not the same" bull without explaining yourself. Aside from the occasional triangular arb for a tick or two the prices match up perfectly. Someones having a good laugh here.
  • #2,562
  • May 19, 2009 5:32pm May 19, 2009 5:32pm
Quoting ThePipDoctor
I've read this thread from start to finish and I have to call bulls**t. This is not a hedge trading system, but a long winded way of range trading EUR/CHF. How can anyone in their right mind not realise that if you are "dollar neutral" in the two pairs EUR/USD and USD/CHF then you have a directional postion in EUR/CHF with the exact same risk. And dont start the "its not the same" bull without explaining yourself. Aside from the occasional triangular arb for a tick or two the prices match up perfectly. Someones having a good laugh here.
There is a way of trading EURUSD and USDCHF based on EURCHF. However, the lot sizes need to be different. Just trading EURCHF on its own is fine unless you get the entry wrong. Buying or Selling both EURUSD and USDCHF (in some instances) allows much less drawdown.
  • #2,563
  • May 19, 2009 5:42pm May 19, 2009 5:42pm
Quoting forex_pro
There is a way of trading EURUSD and USDCHF based on EURCHF. However, the lot sizes need to be different. Just trading EURCHF on its own is fine unless you get the entry wrong. Buying or Selling both EURUSD and USDCHF (in some instances) allows much less drawdown.
If you are net long 100,000 EUR worth of CHF in a synthetic position, or you are long 100,000 EUR directly in EUR/CHF, just how exactly is the drawdown any lower?
  • #2,564
  • May 19, 2009 5:49pm May 19, 2009 5:49pm
Quoting ThePipDoctor
If you are net long 100,000 EUR worth of CHF in a synthetic position, or you are long 100,000 EUR directly in EUR/CHF, just how exactly is the drawdown any lower?
Example:

BUY 2.5 EURUSD and BUY 1.8 USDCHF.

if EURUSD goes down USDCHF goes up which will reduce your neg on EURUSD.

if EURUSD goes up the greater lot size will net overall profit between the two and nullify the speadier USDCHF.
  • #2,565
  • May 19, 2009 6:10pm May 19, 2009 6:10pm
Quoting forex_pro
Example:

BUY 2.5 EURUSD and BUY 1.8 USDCHF.

if EURUSD goes down USDCHF goes up which will reduce your neg on EURUSD.

if EURUSD goes up the greater lot size will net overall profit between the two and nullify the speadier USDCHF.
So you are saying that having dollar exposure affects the profitablity of the position, correct? In this case, it will give you a different percieved drawdown due to the exposure to the third currency. I would agree this is not the same as EUR/CHF, obviously since you have changed the ratios of currency exposure and altered the nature of your position. The main point im making is that this has been passed off as a way of reducing market risk, and terms such as "divergence" and "market neutral" have been bandied around like they mean something here. All I've seen is some faulty logic badly presented by someone advising people to trade a synthetic EUR/CHF postion with or without dollar exposure, and the main exit strategy presented as "just keeping adding to that loser". It doesnt smell right to me.
  • #2,566
  • May 19, 2009 6:19pm May 19, 2009 6:19pm
Quoting ThePipDoctor
So you are saying that having dollar exposure affects the profitablity of the position, correct? In this case, it will give you a different percieved drawdown due to the exposure to the third currency. I would agree this is not the same as EUR/CHF, obviously since you have changed the ratios of currency exposure and altered the nature of your position. The main point im making is that this has been passed off as a way of reducing market risk, and terms such as "divergence" and "market neutral" have been bandied around like they mean something...
Yes, i also do not fully agree with this thread. It seems to have changed somewhat from what the first pages of posts were all about. It originally started off trading EURUSD and USDCHF and has since drifted to just trading EURCHF with multiple market orders which too me is order chasing.

Isnt this what FapTurbo tries todo ??
  • #2,567
  • May 20, 2009 3:17am May 20, 2009 3:17am
Every 1 or 2 months comes a guy saying i read everything and this is all bs.
You are chasing averaging bla bla bla.

I am a professional trader ( former banker, hedge fund manager and still doing that ) so i think i have some competences in that field.
THIS METHOD HAS NOTHING TO DO WITH AVERAGING A LOOSING POSITION absolutly nothing.

First of all trading the 2 sides allows a nice strategy of legging alone when you enter your first trade ( always entering in the side of the moove first)
same for exit
if you trade eur/chf which is fine you cannot do that .
I am not against outright trading on eur/chf
All is about correlated paires and you have to check if this correlation is stil working.
I have been doing that for years and have never had a negativ month NEVER so i am very luck if i trust what you new guys wrotte about it.
And if you dont like it it is easy to go and open an other thread and present your system as you are so smart.

trading this system on eur/chf jhas nothing to do with trading it with cable for exemple, in that case your commentaries will be acceptables
  • #2,568
  • May 20, 2009 4:00am May 20, 2009 4:00am
Hi Spieler,
I was one of early follower of your hedge trading system and unfortunately I was stucked with big positions during big downmove on past Aug-Oct 2008 that wiped out all my account (about 1000$). Now this doesn't mean that your method isn't valid but, more probably, that I did not understand it completely.
What is still unclear for me is how it could be stated that eurusd and usdchf are correlated/decorrelated in any moment because this is the key point that lead to start opening positions or stay away from market.
Maybe I'm wrong but my feelings are that you didn't explain fully aspect of your method , so there are still missing details that could turn an average trader like me to trade properly this trading system.
Or maybe there's more discretional involved than it could appear at first glance, so that you are able to trade this system in a very profitable manner due to your experience and right discretional decisions while other traders like me don't.

Cheers,
Skyline
  • #2,569
  • May 20, 2009 12:36pm May 20, 2009 12:36pm
Quoting spieler
Every 1 or 2 months comes a guy saying i read everything and this is all bs.
You are chasing averaging bla bla bla.

I am a professional trader ( former banker, hedge fund manager and still doing that ) so i think i have some competences in that field.
THIS METHOD HAS NOTHING TO DO WITH AVERAGING A LOOSING POSITION absolutly nothing.

First of all trading the 2 sides allows a nice strategy of legging alone when you enter your first trade ( always entering in the side of the moove first)
same for exit
if you trade eur/chf which is fine you cannot...
You may well be a professional trader. That doesnt make this thread any less retarded. If this is such a professional system, what are your exact criteria for exiting a losing trade? Coin toss? The dog barks? Or is it "work the position" by adding more to the losing trade praying that it comes back? My point is that aside from a paying the spread twice and having a slightly different peroid of exposure to the seperate pairs, you are range trading the EUR/CHF. There is no form of spread trading involved. Risk is identical to an equivalent directional position in the cross. I dont mean to sound harsh, but it pains me to see people lining up wondering why they've blown their accounts because they kept adding to a monster loosing position (hedged of course and perfectly dollar neutral) as the swiss central bank decided that the CHF was 500 pips from where it should have been.
  • #2,570
  • May 21, 2009 3:29am May 21, 2009 3:29am
First of all, you can’t trade any two currencies in the form of EUR/USD x USD/CHF, can you? When you long the EUR/USD & USD/CHF what you are really trading equals the EUR/USD + USD/CHF. Those people that say that trading the EUR/USD & USD/CHF is just simply directional trading the EUR/CHF aren’t quite correct - are they? They’re close, but not exact.

The EUR/USD & USD/CHF as a total, generally moves in the same direction with the movement of the EUR/CHF. The EUR/CHF can actually remain stationary and the values of the EUR/USD & USD/CHF can still change (and when this happens, to stay in mathematical balance, the two pairs must move in opposite directions). Obviously, if you are going to trade the EUR/USD - USD/CHF hedge, you should probably place your trades in the direction of the trend of the EUR/CHF.

The trader who first introduced me to this concept told me a funny story about someone who, after studying Elliott for 10 years, told him that if making money is as easy as simultaneously buying both EURUSD & USDCHF (or vice versa) then he will jump off a building... He has made traders out of people who have been losers in the markets for years using this simple technique.

You really need to try this out for yourself to appreciate the returns. There is enough to get you started by fully understanding this thread.
  • #2,571
  • Edited 9:45am May 21, 2009 7:11am | Edited 9:45am
Nobody was supposed to be in a trade following this system when the swiss central bank made the announce.
And who is fool enough to jum in a trade against the trend when youhave a spike of 300pips in 1 minute??
I said already that a serious trader should have real time news as well.
So you have to trade with your brain.
as for exit you can of course decide that you cannot go over a certain dd and cut your positions when reached if an exogen thing arriving 1 time every 3 years happens
As for me i have been trading this system among others for 5 years and never get a negativ month.
Of course i am using others systems and my average return is 10% per month with low leverage ( was less on hedge fund because leverage was 2 maximum) and very low dd.

I maintain that this system once understood is very powerfull and i received a lot of private message of people having made nice return using it.
I am not happy to read that a guy blows away a 1000bucks account but i would be very hapy if he could post his positions taken and date on this thread so that i can make an analysis because i cannot understand how he did that !!!
  • #2,572
  • May 21, 2009 8:14am May 21, 2009 8:14am
Quoting spieler
As for me i have been trading this system among others for 5 years and never get a negativ months.
I have been following your system since many months and I am still trading it on and off. I am looking forward to your other system for GBPUSD which you mentioned sometime ago.

You have been patient her with this doctor (patient?) guy and other self appointed experts with few posts, trying to intimidate. Who is asking them to follow this system anyway?
"Put all your efforts in becoming effortless"
  • #2,573
  • May 21, 2009 12:32pm May 21, 2009 12:32pm
Quoting forex_fred
First of all, you can’t trade any two currencies in the form of EUR/USD x USD/CHF, can you? When you long the EUR/USD & USD/CHF what you are really trading equals the EUR/USD + USD/CHF. Those people that say that trading the EUR/USD & USD/CHF is just simply directional trading the EUR/CHF aren’t quite correct - are they? They’re close, but not exact.

The EUR/USD & USD/CHF as a total, generally moves in the same direction with the movement of the EUR/CHF. The EUR/CHF can actually remain stationary and...
This is what I object to. Someone takes a little bit of information and runs with it. Think about this for a minute. If you are long 1 lot EUR/CHF at , the postion is constructed as follows. At the current rate of aprx 1.5200

Credit 100,000 EUR
Debit 152,000 CHF

If I instead go long 1 lot EUR/giving me 100,000 EUR, and now proceed to "hedge my dollar exposure" using USD/CHF I have:

Credit 100,000 EUR
Debit 152,000 CHF

The positions are identical.

The only time this does not hold is the occasional triangular arb which is hardly any difference at all, and which is essentially none existent for the retail trader. Anyone making a market for you across the three pairs will have that side covered for themselves. Adding a plus sign between the two crosses changes nothing. And as for getting started, I've been trading correlations and hedges for a long time and I'm used to managing my exposure. Your exposure in ANY case depends upon the exact structure of your position in terms of currencies held, and what prices you are able to execute at. Nothing else matters.

And for the record here, not once have I said no returns are produced by what you are doing. EUR/CHF is a rangebound pair a lot of the time, so a range based strategy will tend to work. What I object to is armies of traders going around with their heads up their arse thinking they've found salvation when really they have no clue what they're actually doing. (on reading that back I had to think, do I really object? The answer is yes, I do have a conscience)
  • #2,574
  • May 21, 2009 12:40pm May 21, 2009 12:40pm
Quoting IamTHAT
I have been following your system since many months and I am still trading it on and off. I am looking forward to your other system for GBPUSD which you mentioned sometime ago.

You have been patient her with this doctor (patient?) guy and other self appointed experts with few posts, trying to intimidate. Who is asking them to follow this system anyway?
Good for you. Last time I checked, a persons IQ and trading experience were not directly correlated with the number of online posts they have to their name. (Hell, what do I know) I'm the Pip Doctor, and I'm here to help.
  • #2,575
  • May 22, 2009 1:45am May 22, 2009 1:45am
Quoting ThePipDoctor
Good for you. Last time I checked, a persons IQ and trading experience were not directly correlated with the number of online posts they have to their name. (Hell, what do I know) I'm the Pip Doctor, and I'm here to help.
I am here to follow Spieler.
You can start your own thread with your system or a trading journal to help those who need it.
"Put all your efforts in becoming effortless"
  • #2,576
  • May 22, 2009 2:57am May 22, 2009 2:57am
Quoting spieler
Nobody was supposed to be in a trade following this system when the swiss central bank made the announce.
And who is fool enough to jum in a trade against the trend when youhave a spike of 300pips in 1 minute??
I said already that a serious trader should have real time news as well.
So you have to trade with your brain.
as for exit you can of course decide that you cannot go over a certain dd and cut your positions when reached if an exogen thing arriving 1 time every 3 years happens
As for me i have been trading this system among others for...
Don't worry Spieler for my bucks, iat the end it didn't hurt my finance so much. Moreover I closed that wiped account so I don't have anymore the historical trades placed at that time.
Btw I'll continue to follow your trade here hoping in your more active partecipation in this thread.

Cheers,
Skyline
  • #2,577
  • May 22, 2009 4:15am May 22, 2009 4:15am
Quoting skyline
Don't worry Spieler for my bucks, iat the end it didn't hurt my finance so much. Moreover I closed that wiped account so I don't have anymore the historical trades placed at that time.
Btw I'll continue to follow your trade here hoping in your more active partecipation in this thread.

Cheers,
Skyline
Good morning Skyline,

I have sent you an e-mail.
Just arrived back from holidays in Rome, so apologies for the delay.

regards
daytrading
Enter Signature
  • #2,578
  • May 22, 2009 4:26am May 22, 2009 4:26am
Quoting spieler
Nobody was supposed to be in a trade following this system when the swiss central bank made the announce.
And who is fool enough to jum in a trade against the trend when youhave a spike of 300pips in 1 minute??
I said already that a serious trader should have real time news as well.
So you have to trade with your brain.
as for exit you can of course decide that you cannot go over a certain dd and cut your positions when reached if an exogen thing arriving 1 time every 3 years happens
As for me i have been trading this system among others for 5 years...
This is really a great system and really changed my trading and looking forward to learning from you Spieler
  • #2,579
  • May 22, 2009 5:03am May 22, 2009 5:03am
Quoting daytrading
Good morning Skyline,

I have sent you an e-mail.
Just arrived back from holidays in Rome, so apologies for the delay.

regards
daytrading
Thx Daytrading, I replied as well

Cya,
Skyline
  • #2,580
  • May 22, 2009 6:57am May 22, 2009 6:57am
I AM ALSO HERE TO FOLLOW YOU SPİELER

using his system for a several months and no loss!!!! (with1/6 leverage)

i decided to close the positions with %10 DD.that never happened but one

day it will.that don't show that the system is bad!!

it's a very good system and i am up about %40 in 2.5 months.

only the bad thing with this system is sometimes you have to wait a lot.

waiting also for the powerful cable system
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