Going long and short EUR/USD on two different broker accounts.

L

lanceippolito

I trade options, and came across this on John Carters book.

Basically with margin in FOREX and the long, directional trades, lasting weeks to months heres the theory and questions.

On one broker account deposit (5,000) and go long the EUR/USD. On another broker account deposit (5,000) and go short the EUR/USD. One of the accounts will catch the direction of the trade, the other account goes negative. You dont touch the trades and let the negative account go to ZERO and keep the profitable account on since the direction is correct?

Has anyone heard of this? thoughts?
 
lanceippolito said:
I trade options, and came across this on John Carters book.

Basically with margin in FOREX and the long, directional trades, lasting weeks to months heres the theory and questions.

On one broker account deposit (5,000) and go long the EUR/USD. On another broker account deposit (5,000) and go short the EUR/USD. One of the accounts will catch the direction of the trade, the other account goes negative. You dont touch the trades and let the negative account go to ZERO and keep the profitable account on since the direction is correct?

Has anyone heard of this? thoughts?
More...

You bet long and short the euro using options or the contracts (lots)?
 
actionzip54 said:
Dafuq?
More...

Its what retail FX traders call "hedging". Being long and short in the same pair at the same time (and paying swaps and bid/ask-spread, and possibly commissions for the privilege). Apparently they do not understand that it nets out to zero exposure. I think it is very amusing.
 
I think it's hilarious. Why wouldn't you just figure out where are $5000 dollar loss was and just open a position at that point?

Lol. John Carter, I'll remember that name. That is a joke being sold as a strategy.
 
for example. we look at the EURUSD.. from YTD the chart looks pretty flat...

If we look at the 1 year chart.. we are mildy bullish but from week 1 of may on a downtrend.

Say I am mixed on the direction of the EURUSD for the next 3 month. I open a acct with 1 broker going long for $10,000 I also at the same time open a acct with ANOTHER broker going short for $10,000. After 1 month the trend is upwards, My short position blows all 10,000$ my long position profits and continues going up for the next 2 months and with margin say 100:1 I profit (How would this work with margin) ?

I basically got the position correct with the long move. the short acct liquidated since i was wrong on the direction.

With margin since in FOREXT u can only loose ur initial capital. how would this work profitable with the long position?
Does it make sense?
 
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