Question on Hedging - page 8

[cozyman]

you should hedge the pairs based on correlation not on volatility,

to hedge non correlated pairs just based on volatility make no sense

[cozyman]

resurgo74:
Hi all,

as we all know one of the highest, if not the highest correlation in FX

is found in EUR USD and USD CHF (negative 97% correlation).

Is there a way to measure the deviation between the 2 pairs, maybe an indicator.

So let`s say I enter one unit short in EUR / USD and at the exact same time

one unit short in USD CHF

I would be more ore less market neutral ( at least if it was a perfect hedge).

But since the correlation is not perfect and deviates from time to time

I need to measure how much max drawdown this 2 positions could create.

I would really appreciate your help.

Thanks

Frank

you and everyone has been missinformed,

we all know that is what people are saying but it's not true.

maybe it's something from the past,

and then they forgot to check???

well things change, and now

EURUSD and USDCHF are actually positivly correlated, YES!

just have a look at the charts, they are following eachother nice and closely,

they allways do!

if they where negativly correlated they would move the oposite ways to eachother.

maybe they used to be but not any more. it's a myth,

the most negativly correlated pairs which you could trade are EURUSD/USDDKK

like a perfect mirror, it can't get any more negativly correlated than that.

for correlations check out Forex Correlation - Mataf.net => ForexTicket

there are plenty of indicators, just Google it, hard to miss

[Sergey Golubev]

Hedge EAs/Tools

EAs

1. HedgExpert EA thread and updated version here
2. HedgeEA thread 
3. Hedge: thread with discussion and EAs
4. 10point3 Hedge thread
5. EES Hedger - Take the other side of the trade - the thread  

CodeBase

1. Hedging_Zone_Recovery_Area - expert for MetaTrader 4  
2. Bandage - expert for MetaTrader 5
3. EMA Cross Contest Hedged - expert for MetaTrader 5
4. Multicurrency hedge example EA (overlay hedge) - expert for MetaTrader 4  
5. Simplest Hedging EA ever - expert for MetaTrader 5  
6. EA Hedge Average - expert for MetaTrader 4  
7. Profit Counter - expert for MetaTrader 4  
8. Simple Hedge Panel - expert for MetaTrader 5  
9. Order-Tool "Hedger" - expert for MetaTrader 4  
10. Triangle Hedge - expert for MetaTrader 5  
11. Hedge Expert Advisor - expert for MetaTrader 4  
12. Simplest Hedging EA ever - expert for MetaTrader 4  
13. SMA MultiHedge - expert for MetaTrader 4  
14. EMA Cross Contest Hedged - expert for MetaTrader 4  
15. Corelation - indicator for MetaTrader 4  
16. Hedge Script - script for MetaTrader 4 

Hedge Discussion

1. Interesting discussion about Hedge Calculation - the thread
2. Question on Hedging thread

Hedge Trading Systems:

1. MA over Equity-Indicator for Hedge Trading - the thread
2. Low-Risk Hedge (Arbitrage) Trading Methodology - the thread
3. 100% hedging system with two brokers - the thread
4. simple hedging system - the thread 

The articles

Break Through The Strategy Tester Limit On Testing Hedge EA

The Basic of Coding A Hedge Expert Advisor

What about Hedging Daily?

Bi-Directional Trading and Hedging of Positions in MetaTrader 5 Using the HedgeTerminal Panel, Part 1 

Bi-Directional Trading and Hedging of Positions in MetaTrader 5 Using the HedgeTerminal API, Part 2 

Universal Expert Advisor: Pending Orders and Hedging Support (Part 5) 

Universal Expert Advisor: A Custom Trailing Stop (Part 6)

[ffoorr]

Here are interest rates for now 2 april 2019

Reserve Bank of Australia	1.500 %	5-7-2019 - 04:30	8-2-2016 - 04:30
Federal Reserve	2.500 %	5-1-2019 - 18:00	12-19-2018 - 19:00
Swiss National Bank	-0.750 %	6-13-2019 - 07:30	1-15-2015 - 09:30
European Central Bank	0.000 %	4-10-2019 - 11:45	3-10-2016 - 12:45
Bank of Japan	-0.100 %	4-25-2019 - 02:00	1-29-2016 - 03:00
Reserve Bank of New Zealand	1.750 %	5-7-2019 - 21:00	11-9-2016 - 20:00
Bank of Canada	1.750 %	5-29-2019 - 14:00	10-24-2018 - 14:00
Bank of England	0.750 %	5-2-2019 - 11:00	8-2-2018 - 11:00

One's have to buy USD or NZD or CAD or AUD against JPY or CHF or EUR

For 0.01 lot on buy USDCHF it make 0.86 euros, for 15 days

Best interest = 2.5 - (-0.75) = 3.25 %

[ffoorr]

Now how do we eliminate the risk taking an hegde like :

 buy GPBJPY
 buy  EURGBP
 sell EURJPY

but keeping the swap ?