Cash & Carry

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Quote from ElectricSavant:

Here is a spreadsheet I put together of the interest ranks. I earlier posted this and brought it forward for convienence

Michael B.
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I don't trade spot only futures, so maybe I'm confused. But how did you arrive at 126% APR for AUD/JPY? Are you calculating return based on net gain/pre-leveraged capital?
 
The amount invested (50:1 leverage) for 8,760 hours paid on the leveraged holdings.

Look at FXmath for the calculator. I am unable to post the link due to the constraints here in ET.

You must be long that pair to earn interest and not pay it....So there is money to be made both ways, to sustain infinity while collecting interest is to incrementally calculate down to zero.

Again you can't calculate infinity for a short...like EUR/HUF. It can go against you forever in an always in one-directional system.

Michael B.

P.S. I have discovered something and am working on it. stay tuned...Preliminarily it is rather exciting and quite a addition to Cash & Carry.

P.S.S. If one could stand a more conservatve half yield Cash & Carry, I believe I have something.

P.S.S.S. I no longer have to worry about trading OPM, I am told that I will not be taken seriously by building a track record with 5k, I am just wasting my time. So I will return to teaching in here and I do not have a personal motive anymore. Actually I do not know why I am doing this. I really do not need approvel or attention. This is a bad evening and I am getting negative, I gotta go.


Quote from illiquid:

I don't trade spot only futures, so maybe I'm confused. But how did you arrive at 126% APR for AUD/JPY? Are you calculating return based on net gain/pre-leveraged capital?
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Hello

Like there's nothing better to do on this Saturday I set out to read all the posts in this thread and spent hours trying to understand them. Although Cash-n-carry system presented by Electro Magnetic Servant is noteworthy, the presenter did a poor job of presenting it.

I am big believer of KISS rule (some people call it: CTC rule: cut the cr*p). So this is the summary of the system.

This system is mostly an Interest collecting system, ie, put your money in the FX pairs and collect interest. I said mostly!! So if you dont trade at all, your losses can outweigh interest payments.

--- BEGIN cash-n-carry

1. Choose top three from high interest paying currency pairs. AUD/JPY, GBP/CHF, EUR/HUF

2. Split your allocated money in the inverse ratio of their daily volatility (breadth = high - low for the chart). So, put more cash in the pair that has low breadth. Less cash in the one with high breadth.

3. Place actual trades / close open trades using your regular trading skills.

--- END cash-n-carry

Thats it. The above three points summarize Cash-n-Carry. Everything else is cr*p (also known as human emotions, praise, grunts, poetry, prose etc).

Questions:

1. Won't the chart already price in the interest payment due ? Yes. But Not always and not necessarily.

2. This is not a trading system.Its not investing system either. Yes. Its actually a technique of picking pairs and allocating your money. After picking and allocating, whether you invest, trade or just scratch your head, its upto you.

3. Whats up with dollar cost averaging, limit orders, one cash acct just to get interest and then another subacct ?
Yes, its a mess. Throw out the actual Cash and Carry excel sheet and keep the InterestCow sheet.

5. What are the good things in this?
This takes into account fundamentals (go where the interest money is) and technical (manage risk. More eggs in a basket that shakes less. Another way of looking is: more capital to be allocated to get same pip gain for a less volatile currency pair)

6. What are the bad things in this ?
Probably spreads will be against you or should I say price in the interest payment. And, more tolerance for loss so more drawn out patterns ?

I have nothing to do with Electro Magnetic Servant but I think he deserves thanks for atleast contributing something
 
Murtsy,

Thanks for reading.

Do you think I should just set the leverage at 10:1 and trade in one account with reduced exposure?

I do not notice spread in the two long pair being a problem, but the EUR/HUF is troubling. If there was more trading and if this were a short term "not always in" system then I would think spreads would be a bigger factor.

The choice of the pair are not the TOP three in the rank. Do you think I should replace EUR/HUF with NZD/USD or perhaps trade all four?

Thanks for clearing this up and putting it all together in a simple explanation for this money management system. Perhaps you cleared out many readers questions..

Electro




Quote from murty:

Hello

Like there's nothing better to do on this Saturday I set out to read all the posts in this thread and spent hours trying to understand them. Although Cash-n-carry system presented by Electro Magnetic Servant is noteworthy, the presenter did a poor job of presenting it.

I am big believer of KISS rule (some people call it: CTC rule: cut the cr*p). So this is the summary of the system.

This system is mostly an Interest collecting system, ie, put your money in the FX pairs and collect interest. I said mostly!! So if you dont trade at all, your losses can outweigh interest payments.

--- BEGIN cash-n-carry

1. Choose top three from high interest paying currency pairs. AUD/JPY, GBP/CHF, EUR/HUF

2. Split your allocated money in the inverse ratio of their daily volatility (breadth = high - low for the chart). So, put more cash in the pair that has low breadth. Less cash in the one with high breadth.

3. Place actual trades / close open trades using your regular trading skills.

--- END cash-n-carry

Thats it. The above three points summarize Cash-n-Carry. Everything else is cr*p (also known as human emotions, praise, grunts, poetry, prose etc).

Questions:

1. Won't the chart already price in the interest payment due ? Yes. But Not always and not necessarily.

2. This is not a trading system.Its not investing system either. Yes. Its actually a technique of picking pairs and allocating your money. After picking and allocating, whether you invest, trade or just scratch your head, its upto you.

3. Whats up with dollar cost averaging, limit orders, one cash acct just to get interest and then another subacct ?
Yes, its a mess. Throw out the actual Cash and Carry excel sheet and keep the InterestCow sheet.

5. What are the good things in this?
This takes into account fundamentals (go where the interest money is) and technical (manage risk. More eggs in a basket that shakes less. Another way of looking is: more capital to be allocated to get same pip gain for a less volatile currency pair)

6. What are the bad things in this ?
Probably spreads will be against you or should I say price in the interest payment. And, more tolerance for loss so more drawn out patterns ?

I have nothing to do with Electro Magnetic Servant but I think he deserves thanks for atleast contributing something
More...
 
Its a lifetime of beginnings and speculation. I have mellowed in my forties. No more illusions.

Michael B.


Quote from jerryz:

Electricsavant, you said you lost millions before? how?
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no, no, not like that....its a lifetime that added up..I am curious why do you ask? Now that I think about it, it may have been in the 10's of millions. But I owe nothing to anybody now. I may of had several million on paper in Europe, but that was then this is now. I think I lost most of the money in the USA though...Shattered Dreams and living the "illusion" took its toll.

I have learned to take the "illusion" out of what I am capable of doing and to just make "near visions" and then maintain "long term Visions". It must be like a ladder to climb and I have learned to laugh at myself with those baby steps along the way. At the age of 46, I came to realize, I cannot take over the world and what you see is what you get, there aint no more...lol

Michael B.


Quote from jerryz:

at any one point did you have over $2 million cash?
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Quote from murty:

Hello

Like there's nothing better to do on this Saturday I set out to read all the posts in this thread and spent hours trying to understand them. Although Cash-n-carry system presented by Electro Magnetic Servant is noteworthy, the presenter did a poor job of presenting it.

I am big believer of KISS rule (some people call it: CTC rule: cut the cr*p). So this is the summary of the system.

This system is mostly an Interest collecting system, ie, put your money in the FX pairs and collect interest. I said mostly!! So if you dont trade at all, your losses can outweigh interest payments.

--- BEGIN cash-n-carry

1. Choose top three from high interest paying currency pairs. AUD/JPY, GBP/CHF, EUR/HUF

2. Split your allocated money in the inverse ratio of their daily volatility (breadth = high - low for the chart). So, put more cash in the pair that has low breadth. Less cash in the one with high breadth.

3. Place actual trades / close open trades using your regular trading skills.

--- END cash-n-carry

Thats it. The above three points summarize Cash-n-Carry. Everything else is cr*p (also known as human emotions, praise, grunts, poetry, prose etc).

Questions:

1. Won't the chart already price in the interest payment due ? Yes. But Not always and not necessarily.

2. This is not a trading system.Its not investing system either. Yes. Its actually a technique of picking pairs and allocating your money. After picking and allocating, whether you invest, trade or just scratch your head, its upto you.

3. Whats up with dollar cost averaging, limit orders, one cash acct just to get interest and then another subacct ?
Yes, its a mess. Throw out the actual Cash and Carry excel sheet and keep the InterestCow sheet.

5. What are the good things in this?
This takes into account fundamentals (go where the interest money is) and technical (manage risk. More eggs in a basket that shakes less. Another way of looking is: more capital to be allocated to get same pip gain for a less volatile currency pair)

6. What are the bad things in this ?
Probably spreads will be against you or should I say price in the interest payment. And, more tolerance for loss so more drawn out patterns ?

I have nothing to do with Electro Magnetic Servant but I think he deserves thanks for atleast contributing something
More...

Thanks Murty for summarising the system.

1) Can we just do the AUD/JPY and GBP/CHF?
2) Do we always go long on this 2 pairs? In a way, are we always averaging down as long as the price move against us and hope that in the end, price will bounce back and we earn interest along the way? What if price went in our favour, do we average up? Or maybe, do a time-based periodic investment? Is this what the system is all about?
3) Is interest earned sufficient to offset a year's movement in price against us, for example? Not to mention all the averaging down?

Thanks
 
Electro
I am younger and less experienced than you. But I am honored and feel good when you ask my suggestions :cool:

50:1 is just fine.

I dont even like exotic dancers. I would stick to non-exotic pairs. If I have to further choose, stick with those with tighter spreads. Replacing EUR/HUF with NZD/USD is a good idea.

Trading four pairs is ok. But no more than four. Also, it would be best to rank the non-exotics in the descending order of their future interest rates (ie declared or generally anticipated change of rates taken into acct)

One thing I am very curious though is rank correlation factor. If you rank the pairs in interest deference as well as in monthly percentage chg in price, how close are the two ranks correlated ?

Also, is it possible to stay within US Dollar crosses ? I cant properly visualize others in my mind :confused:

(Another reason is, I get to look at US Dollar index to understand things better)

I wonder if banks like Everbank already use this cash-n-carry to offer foreign currency denominated CDs

Quote from ElectricSavant:

Murty,

Thanks for reading.

Do you think I should just set the leverage at 10:1 and trade in one account with reduced exposure?

I do not notice spread in the two long pair being a problem, but the EUR/HUF is troubling. If there was more trading and if this were a short term "not always in" system then I would think spreads would be a bigger factor.

The choice of the pair are not the TOP three in the rank. Do you think I should replace EUR/HUF with NZD/USD or perhaps trade all four?

Thanks for clearing this up and putting it all together in a simple explanation for this money management system. Perhaps you cleared out many readers questions..

Electro
More...
 
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