Profitable Ideas on Carry Trades

Scalpmaster,

I am also in a GBP/USD and USD/CHF hedged trade.

On a $4000 account I am paying a daily interest of $0.19 on the GBP/USD and I earn a daily interest of $5.97 on my USD/CHF. This is a net daily interest of $5.78, or 52.79% annual interest.

I have been utilizing a hedge trading startegy for the past 6 months with very favorable results.

My main accounts are in EUR/USD and USD/CHF positions since this is the most conservative pairs that I use. I earn less interest but there is less fluctuations as well.

I have an analysis for this strategy that shows the daily results of 5 different currency pair combinations over the past 500 days. The analysis includes the daily price of each currency pair so you can validate the data if you are so inclined.

I would be happy to send you a copy of the analysis for your review and comment.

Paul
pupp52@yahoo.com
 
from the daily interest figure it looks like you have a position of ~9 minilots in USDCHF, right? A 500 pip adverse movement would wipe out your account. The range of USDCHF over the past 3 years was ~2000 pip.

Quote from pipdude:

Scalpmaster,

I am also in a GBP/USD and USD/CHF hedged trade.

On a $4000 account I am paying a daily interest of $0.19 on the GBP/USD and I earn a daily interest of $5.97 on my USD/CHF. This is a net daily interest of $5.78, or 52.79% annual interest.

I have been utilizing a hedge trading startegy for the past 6 months with very favorable results.

My main accounts are in EUR/USD and USD/CHF positions since this is the most conservative pairs that I use. I earn less interest but there is less fluctuations as well.

I have an analysis for this strategy that shows the daily results of 5 different currency pair combinations over the past 500 days. The analysis includes the daily price of each currency pair so you can validate the data if you are so inclined.

I would be happy to send you a copy of the analysis for your review and comment.

Paul
More...
 
Quote from ForexTrader1980:

Actually speak to anyone that works in the industry and they'll tell you the the Japanese housewives are some of the most profitable traders....
More...

True....but it still does not help their frustrations and daytime boredom/loneliness and thats where l would like to come in :D
 
An adverse move of price in the USD/GHF is offset by a positive move in the EUR/USD. This is the whole concept of hedge trading.

I have been trading hedge strategies for 6 months and have never come close to a margin call!
 
sure, but the hedge is not perfect. It's obvious that hedging a USD/CHF position with a EUR/USD position is equal to single a EUR/CHF position (scaled appropriately). The latter would actually earn you more interest as you don't pay the USD interest bid-ask spread.

Quote from pipdude:

An adverse move of price in the USD/GHF is offset by a positive move in the EUR/USD. This is the whole concept of hedge trading.

I have been trading hedge strategies for 6 months and have never come close to a margin call!
More...
 
Quote from pipdude:

An adverse move of price in the USD/GHF is offset by a positive move in the EUR/USD. This is the whole concept of hedge trading.

I have been trading hedge strategies for 6 months and have never come close to a margin call!
More...


Wow....a whole six months! All correlations go to one, at some point in time, you'll likely find your hedges ineffective, rememember LTCM, they thought they were hedged too!

Seriously, congrats on your early success, but you are trading a micro account, and the market loves to slap around complacent people and take their money, don't throw caution to the wind, and don't get caught on your heels.
 
Thanks PipDude and Noworries for their productive reply and suggestions.

Appreciate if anyone can comment on these queries:

Which broker are you using and what is the leverage they offer?
Shouldn't you get capital return of more than 100% per year
since there is an interest differential of 3% on a 100times or more leverage on the hedged trade I mentioned if GBP mirrors CHF?

Do brokers actually pay the exact leveraged interest differential based on central bank rates or are there other considerations when executing a carry trade?

http://www.centralbankrates.com/

Does a long position in GBP/CHF give the same interest differential as the hedge we used in GBP/USD & USD/CHF or is there a difference?


I am studying the various correlation between different FX pairs to see if I can find maybe a multi-trio(pyramid) combination that provides the largest interest differential while having at least a 80% or more positive or negative correlation. Looking at NZD,AUD and JPY but can't find one pair that mirrors as well as GBP & CHF to provide the hedge. Can anyone think of a larger interest differential hedged carry trade?

http://www.mataf.net/en/analysis-correlation.htm

I heard InterbankFX gives 400X leverage and allows interface with Metatrader4 platform which can be used for implementing automated/expert systems. I recently purchased a FX binary trading system which is suppose to give you a mathematical edge ( I am also researching into betting mathematics/systems such as anti-martingale methods) that can be use
for trading index futures as well. Is anyone into MetaTrader expert systems too?
 
I am well aware of how the market treats complacent people. I have been trading in the Forex market for 4 years. I would consider myself primarily a technical trader although I have gotten a thrill or two and a spankin or two trading the news releases.

I have paid the same dues as most of you, spending thousands on software, courses and systems. Having my accounts blow up a few times because I thought I knew it all or had found the perfect solution.

I have been fortunate to have been associated with some very successful traders that were willing to share some of their pearls of wisdom along the way. As such I make certain not to assume that a new poster to a forum is necessarily a new player to Forex. Nor would I assume that he or she is a bumbling idiot. The only reason I would spend time on a forum is to offer any assistance that I can to my fellow trader.

After reading your response I immediately checked with my brokers and verified that no...I do not just trade a mini account. All of my Forex accounts are still doing quite well so to my relief I do not have to go back to finding a regular job. For the past 10 months I have been living the life of a trader and for the past 6 of them I have been working on my golf game.

I don't know where in my post I claimed to have all the answers nor did I in any way imply that my trading methods are superior to yours. I can easily assume by the volume of your posts that you are quite successful, at least at posting. I was simply looking to discuss hedge trading with a fellow trader or two.

I even offered to share an analysis with you in the hope to welcome your constructive (or for those of you that choose....destructive) criticism.

Once again I apologize for my simple post that somehow generated such a non-welcoming response. I will refrain from posting in this forum and disrupting your domain.

Regards,

"1880 posts short of intelligence"
 
pipdude..welcome to ET..

You are most welcome here and I hope you reconsider your position.

I apologize for the rudeness and I hope you can understand that we maintain the freeness allowed and practice with much levity in our moderation.

I personally moderate spam and leave the independent thinkers to post amongst themselves without editing posts...I hope you understand and can put on the thick skin that is sometimes expected from a street wise, consistently, profitable moneymaking trader...

I hope that you find ET spam free and place where you can come for frank conversation and to discuss the riggers of trading...

Please give us another chance. We need you as much as you need us. IF YOU GET ANY POSTS VIOLATING THE RULES OF CONDUCT, PLEASE PRESS THE COMPLAIN BUTTON OK? DEAL?

ES
 
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