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making (a little) money off interest

  • #41
  • Aug 26, 2006 9:25pm Aug 26, 2006 9:25pm
Quoting witchazel
you are simply talking about having 1000pips in reserve on the outside. thats works fine for me too. the balance is to find the minimum you need in reserve so you dont ever have to re close/open the position.

if you were truely brave you could go for 500 pips and make 70%. its a balancing act between reentry and APR

If you plan ahead you dont need to puy wire fees either, you can use the post office.

i prefer 2000pips as this isnt my main trading. i only have 10% of my account actively trading at any time, these 2000pips are the other 90%. its nice to have a 30%+ APR on stuff you arent even actively trading with
I agree...but it's pretty much a given, you need to withstand a large enough move in order. Your right, though...if 500 pips in one swoop occurs very rarely...

Keep thinking guys...we're on the right track.
  • #42
  • Aug 29, 2006 12:46pm Aug 29, 2006 12:46pm
Get an account with Washington Mutual (wamu.com) and you get free outgoing wires. I switched just for that....pretty nice feature if you don't mind the hassle of a new checking account.
  • #43
  • Aug 29, 2006 12:58pm Aug 29, 2006 12:58pm
Quoting jhathawa
Get an account with Washington Mutual (wamu.com) and you get free outgoing wires. I switched just for that....pretty nice feature if you don't mind the hassle of a new checking account.
Outgoing is free for wamu...but what about from your brokerage account? naturally, they're going to charge for that. Incoming wires for most brokerage accounts are free...I would assume our first transfer will be from your checking account to the weaker side (probably when your account gets down to 30% or so)...but from then on, I'd assume you'd transfer money from the strong side to the weak side, thus only taking on the brokerage charge for the outgoing wire (which you'd have to pay anyway).

Incidentally, it did occur to me...

We actually don't need to keep both accounts equal...technically, we can shift margined funds from the strong side (which should be UP 300-500 pips, thus being able to handle an additional 300-500 pip move in the other direction). SO...technically, a $40,000 hedge (2 accounts) can assume almost 700 pips before we need to rebalance.

At some point, though, the hedge will reach a threshold and we'll need to rebalance...at that point it's a single wire transfer from 1 broker to another.
  • #44
  • Aug 30, 2006 5:58am Aug 30, 2006 5:58am
Quoting mrmikal
Outgoing is free for wamu...but what about from your brokerage account? naturally, they're going to charge for that. Incoming wires for most brokerage accounts are free...I would assume our first transfer will be from your checking account to the weaker side (probably when your account gets down to 30% or so)...but from then on, I'd assume you'd transfer money from the strong side to the weak side, thus only taking on the brokerage charge for the outgoing wire (which you'd have to pay anyway).

Incidentally, it did occur to me...

We actually don't need to keep both accounts equal...technically, we can shift margined funds from the strong side (which should be UP 300-500 pips, thus being able to handle an additional 300-500 pip move in the other direction). SO...technically, a $40,000 hedge (2 accounts) can assume almost 700 pips before we need to rebalance.

At some point, though, the hedge will reach a threshold and we'll need to rebalance...at that point it's a single wire transfer from 1 broker to another.
I didn't know brokers would wire to each other. I just assumed they wouldn't do that because another broker is taking their business. I was thinking you'd have to wire back to checking and out to another broker. Thats good to know.
  • #45
  • Aug 30, 2006 10:55am Aug 30, 2006 10:55am
Quoting jhathawa
I didn't know brokers would wire to each other. I just assumed they wouldn't do that because another broker is taking their business. I was thinking you'd have to wire back to checking and out to another broker. Thats good to know.
I would assume they would wire to wire...after all, you're wiring to and from a bank. At least I would assume so...

Has anyone ever done this before? I'll ask FX Sol and MBT what their recommendations are.
  • #46
  • Aug 30, 2006 11:03am Aug 30, 2006 11:03am
Quoting mrmikal
I would assume they would wire to wire...after all, you're wiring to and from a bank. At least I would assume so...

Has anyone ever done this before? I'll ask FX Sol and MBT what their recommendations are.
If both brokers are registered with NFA, you can do an account transfer where they wire the money from one to another. I did this going from FXDD to CoesFX. However, I'm not sure if you can just wire a portion of the account funds. I've anticipated that you couldn't do this. On the other hand, if you have enough money with a broker, they might work with you.
  • #47
  • Aug 30, 2006 9:18pm Aug 30, 2006 9:18pm
Perhaps you could hedge USD/CHF with EUR/USD then hedge any possible divergence/convergence with a postion in the EUR/CHF cross. That oughta do it.
Profit is where readiness meets Opportunity
  • #48
  • Aug 30, 2006 9:45pm Aug 30, 2006 9:45pm
Quoting FXopportunist
Perhaps you could hedge USD/CHF with EUR/USD then hedge any possible divergence/convergence with a postion in the EUR/CHF cross. That oughta do it.
FXO,

The purpose of this type of trade is to gain from the interest roll-over with minimal risk. Purchasing 3 pairs (especially these 3 pairs) does not necessarily reduce the risk low enough to make the interest worth the effort.

At this point, we believe we've solved the underlying problems and are moving on. Right now we're just trying to optimize to reduce costs and increase the profit margin.
  • #49
  • Aug 31, 2006 5:51pm Aug 31, 2006 5:51pm
i know japan recently lifted their ZIRP policy, it would be even more profitable if they enacted it again, and it would be much less profitable if they raised rates from their current .25%. Aud/Jpy at 6.0%/.25% or even 6/0 would be an awesome interest pair, hopefully jpy's rates don't increase. What do you think?
PipMasterFlex
  • #50
  • Sep 1, 2006 12:08am Sep 1, 2006 12:08am
Quoting isufreak24
i know japan recently lifted their ZIRP policy, it would be even more profitable if they enacted it again, and it would be much less profitable if they raised rates from their current .25%. Aud/Jpy at 6.0%/.25% or even 6/0 would be an awesome interest pair, hopefully jpy's rates don't increase. What do you think?
Don't forget that you need to take the spread into account. The cost of that spread is over $100 per lot...and that's in only one direction. Try to do a hedge on that and you're looking at $200 per hedge. That's a lot of dough.

Sure the interest rate seems nice...but every time you open a hedge you have to wait what, like 10 days before you can clear the cost of just opening the hedge? That doesn't sound profitable to me.

We have to take into account all aspects in order for this to work.
  • #51
  • Sep 2, 2006 7:19pm Sep 2, 2006 7:19pm
Sorry for asking (as I dont have this info), how do I get to know the Interest rates of the more lucrative currency pairs?

As mrmikal clearly pointed, it is a balance between Interest Rates vs Spreads to make this profitable.
Quote
Sure the interest rate seems nice...but every time you open a hedge you have to wait what, like 10 days before you can clear the cost of just opening the hedge? That doesn't sound profitable to me.
  • #52
  • Edited 5:01am Sep 3, 2006 2:55am | Edited 5:01am
Quoting BurgerKing
Sorry for asking (as I dont have this info), how do I get to know the Interest rates of the more lucrative currency pairs?

As mrmikal clearly pointed, it is a balance between Interest Rates vs Spreads to make this profitable.
Here is the % from one of my Demo account
Currency Pair / Short Interest / Long Interest
GBP/USD / 0.4 / -0.6
EUR/USD / 2.35 / -2.7
USD/JPY / -5.75 / 5.15
USD/CHF / -3.57 / 3.22
AUD/USD / -0.5 / -0.05
GPB/JPY / -4.8 / 3.45
EUR/CHF / -1.87 / 1.27

Suggest to play with EUR/USD and USD/CHF because they seen more reverse correlated. I will do a test in my demo account, use up to 50% margin on both pair long and see how it is going for 3 months.
  • #53
  • Sep 3, 2006 9:10am Sep 3, 2006 9:10am
Quoting thomson
Here is the % from one of my Demo account
Currency Pair / Short Interest / Long Interest
GBP/USD / 0.4 / -0.6
EUR/USD / 2.35 / -2.7
USD/JPY / -5.75 / 5.15
USD/CHF / -3.57 / 3.22
AUD/USD / -0.5 / -0.05
GPB/JPY / -4.8 / 3.45
EUR/CHF / -1.87 / 1.27

Suggest to play with EUR/USD and USD/CHF because they seen more reverse correlated. I will do a test in my demo account, use up to 50% margin on both pair long and see how it is going for 3 months.
can you tell me the broker you use?
  • #54
  • Sep 3, 2006 1:19pm Sep 3, 2006 1:19pm
Quoting dof
I've done some research about this.
The conclusion that i've came with is that is better to wait for a really good moment to enter long on gbp / jpy and play for the interest. This pair is going up for the last 7 years. Take a look at the monthly chart.
The pair is going UP, until when? don't know
Try hard, think fast, die young
  • #55
  • Sep 30, 2006 1:00pm Sep 30, 2006 1:00pm
TheRumpledOne,

Avery, good to see ya here on FF. i hope you can TRO this in to a esignal study.

thanks,
airball
  • #56
  • Last Post: Sep 30, 2006 9:01pm Sep 30, 2006 9:01pm
sorry Avery,(i dont know what the heck i was asking for at the time) i ment to say some of the code over here at FF; not this on this thread. here is one that looks promising its called fx sniper's lsma its in mt4 here is the link on a defferant FF thread to it.

http://www.forexfactory.com/forexfor...&page=38&pp=15

there is a pic of it on post #545 posted by summitfx
he was kind to provide the following link to it. BTW, its the one w/ the tan and red line.

here is the link to get it:

http://www.forex-tsd.com/42655-post24.html

this would be killer in a multi-time frame TRO_PMSM in esignal but far better as a new TRO_PMSM in MT4. would be great! most of the code on the FF board is in MT4 and they have lots of great stuff and great posters here. the FX data feed is free from MetaTrader and its in MetaQuotes Language 4 (MQL 4) i hope the code is close to esl or edl or some other code you know.

best of all by having the TRO_PMSM's on MT4 we would not have to give esignal every month 50.00 for forex +20.00 for HOTS- (i know you dont use it but i do) + the 25.00 extra they jab you for to have the forex/futures data addon +tax on all of the above!

thanks again
airball
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