Simple Trading Strategy

[DollarBull]

If you are trading manually, consider this:

Swiss National Bank has pegged CHF to Euro 1.20. The market is not likely to shake this peg anytime soon.

So, play the See-Saw Hedging Strategy as follows:

-Sell EURUSD and at the same time Sell USDCHF

Because of the peg, these two will be strongly anti-correlated. Suppose you make 50 pips in EUR, you will lose about 50 pips on paper in CHF, take profit in EUR, wait for USDCHF go back to starting value.

-At the same time, do the opposite in another account - BUY EURUSD and USDCHF. Here you will profit in CHF at first, (watch for wave turning to cash) and wait for the paperloss in EUR to disappear.

You will be making money at the cost of SNB. Tell SNB that their plan is a ridiculous one. Make money of their back. Thank me later.

Remember to evaluate this strategy carefully for your own suitability. Don't blame me for any loss you may incur from your poor understanding of the method or improper implementation.

[Q-Funds]

Looks like a good idea.

Does FxOpen allow that though?

[ilearn2t]

Hello Q-Funds

Yes FXOpen allows hedging with a few rules attached, but the formula above would take more analyzing.

It don't take in to account the spread lose, swap might also apply, and from the very start, what if the pair losing keeps going after the first winning one closes?

Plus the fact both sets of pairs would need to move in the same value of pips.

But if you set up a "Demo" account and refine it a bit you might make a profit, whats to lose.

Good luck
ilearn2t

[Q-Funds]

Thank you for that comprehensive explanation.

Appreciate that.


Yes, the most glaring problem will be, what if you closed your winning trade, and the losing trade keeps on losing? =0

[dustlee]

sound logical to have a try but like said, the moving on the pips amount and swap incur will make it a different.

if the second trade does not move as per wanting, the swap incur will anytime eat off all the profit.

[ilearn2t]

Hello dustlee

I'm collecting data on these set of pairs at the moment, a long with GBP/USD & USDCAD, and it looks like EURUSD & GBP/USD are better suited or USD/CHF & USD/CAD as these set of pairs have a closer pip value movement over a longer time period.

Good luck
ilearn2t

[dustlee]

hi,

EU and GU is having similar correlation even though not in all the time. you can check the pairs correlation at below address.

http://www.forexticket.us/en/tools/01-01-correlation

i have tried to trade both in the same time but the result is not that encouraged. one may due to the pips size is not the same and the correlation value is changing from time to time, so i will only choose to trade one at a time.

hope the above helps but i may in mistake.

[Q-Funds]

I noticed EURUSD and AUDUSD also moves in sync almost all the time.

[dustlee]

Noted, i will keep an eye on this. As for those who want to have in reverse or opposite correlation, can try USDCHF as it is mosly 85% opposite with EU.

But i do not trade on that as my main currency is still the EU and sometimes GU.

For those who try on the above, please comment.

[ilearn2t]

Hello Everyone

The solution will lay in the EUR\GBP\AUD\NZD v /USD all are base currencies against the USD so tend to move in the same direction, so hedging is best done between the 4 said currencies.

Good luck
ilearn2t

[ngepet dolar euro]

Hello Everyone

The solution will lay in the EUR\GBP\AUD\NZD v /USD all are base currencies against the USD so tend to move in the same direction, so hedging is best done between the 4 said currencies.

Good luck
ilearn2t

Really interesting strategy sir, if i not wrong this kind of strategy known as arbitrage trading system strategy, can you tell me more detail corelation between this four pair so I can use these pair to hedging.

[yuventius bhasyudewo se]

Hello Q-Funds

Yes FXOpen allows hedging with a few rules attached, but the formula above would take more analyzing.

It don't take in to account the spread lose, swap might also apply, and from the very start, what if the pair losing keeps going after the first winning one closes?

Plus the fact both sets of pairs would need to move in the same value of pips.

But if you set up a "Demo" account and refine it a bit you might make a profit, whats to lose.

Good luck
ilearn2t

can FXopen provide two accounts, first for swap free and second account for Swap in one person simultantly, because this can be implemented for swap trading, and I think like AUDUSD have good interest rate for LONG position

[adnan10076]

thanks for sharing your own idea and no one can blame you, because your not force on any one. And every one has a mind..thanks

[nahiyar]

The topic starter has shared a very good strategy which I oftenly use in my tradings.Normally, this kind of strategy is called "Hedging Strategy".However, I prefer to hedge within one pair instead of using different pairs, like don't trade in EU and UCHF, but just open reverse positions within EU, and close the one in profits while wait for another to come back in profits..

[nonamer]

can FXopen provide two accounts, first for swap free and second account for Swap in one person simultantly, because this can be implemented for swap trading, and I think like AUDUSD have good interest rate for LONG position

hi

You can open 2 account with 1 free swap ( free swap only for muslim trader only) and 1 swap account. But remember you cant hedging between 2 account, example 1 account buy then 1 account sell. FXOPEN have system to detect this transaction. FXOPEN not allowed hedging between 2 account but you can hedging under 1 account - buy and sell on the same account.

Thanks