Making money but forex is killing me. Hedging strategies.

[Apollo13]

It's typical ... as soon as I liquidate my USD it moves against me !
New strategy.
Maintain 50% USD 50% AUD
I am now immune to currency movements !
Adjust as required if I see any long term trends.

Plan ?

BTW thanks a lot for all the advice guys.
You fellas are gold and this is the go to forum for me.
Cheers.

 

[billv]

I am an Aussie trading in US equities and making a fairly decent profit.

For most of this year it's been an easy ride with the forex AUD/USD being a wind at my back.

I am now facing a head wind as the Aussie Dollar is going up. Maybe not for long .. but who knows.

I make daily profits only to have the forex take it away. One step forward two back.
Annoying.

Asking you guys on what I can do to mitigate this.

What road should I investigate going down ?

When trading US equities you are dealing with 1 currency (USD) so you don't have such a big problem. I trade currencies and many of my positions roll over daily so my problem is much greater than yours.

Does your broker charge to convert your funds to USD every time you do a trade?
Even if they don't charge you, I'm guessing that they would benefit from the currency conversion so if you place many trades and doing many currency conversions, your funds would be slowly depleting.

I think that since your equities are in USD it would be better to keep your trading funds in USDs. Some times your funds +profit will go down but other times they will go up but you won't have ongoing currency conversions costs.