Question on Hedging - page 5

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Amritendu Maji
1446
Amritendu Maji  

Thank you for the explanation. I now realize what you were trying to say.

Jos Theelen
100
Jos Theelen  
nezinu:
The result is great, but there are some aspects that bothers me. The main problem is that these discrepancies between main pair(in my example EURCHF) and synthetic pair(EURUSD, USDCHF) lasts just for few seconds. We need very smooth execution from broker so that we can profit from arbitrage. The second aspect ... i don't know what the broker will do if he will understands that we are making profits from such trading. I think slippages, requotes, spread increase .. is just beggining. There is need for very good broker or ECN style brokers. And one more thing .. without automatization .. the arbitrage just can not be done.

The broker should not be a problem. You could keep the trades open for some extra minutes. In that way the broker will think it is a "normal" trade.

However I see another problem. The values become erratic during news-times (NFP, CPI, Tradebalance, etc). In that case you could lose a lot of money when automated.

Roland
70
Roland  
JosTheelen:
The broker should not be a problem. You could keep the trades open for some extra minutes. In that way the broker will think it is a "normal" trade. However I see another problem. The values become erratic during news-times (NFP, CPI, Tradebalance, etc). In that case you could lose a lot of money when automated.

The thread topic is hedging, but .. lets talk about arbitrage .

The main problem that could rise .. in my opinion:

In arbitrage we need to buy/sell 3 currency pairs simultaneously. But it can be difficult. Very often discrepancies between main pair and synthetic pair lasts just for few seconds.

Lets look at example:

EURUSD 1.2971

USDCHF 1.2441

EURCHF 1.6140

EURUSD jumps 4 pips down, and now we want to sell EURCHF and buy EURUSD and USDCHF. We or expert advisor are giving the command. But in that time EURUSD jumps 2 pips down. And the result is: we have 2 open positions short EURCHF, long USDCHF and ONE REQUOTE. And what to do now?

JosTheelen, is this what you mean by lose a lot of money during news time? or something else? However I think that this system are not suitable for news time, so you just need to avoid opening or closing positions during news time.

Roland
70
Roland  

sorry, made mistake in previous post:

EURUSD jumps 4 pips down, and now we want to sell EURCHF and buy EURUSD and USDCHF. We or expert advisor are giving the command. But in that time EURUSD jumps 2 pips down.

the correct:

EURUSD jumps 4 pips down, and now we want to sell EURCHF and buy EURUSD and USDCHF. We or expert advisor are giving the command. But in that time EURUSD jumps 2 pips up.

Jos Theelen
100
Jos Theelen  
nezinu:
JosTheelen, is this what you mean by lose a lot of money during news time? or something else? However I think that this system are not suitable for news time, so you just need to avoid opening or closing positions during news time.

Yes, but it is only one of the problems. Because everything moves so fast, it could be 20 pips difference. Or one of the trades is not filled in by the broker.

And how do you avoid news times? Sometimes unimportant news can cause big spikes, so will you avoid all news? And news can be a press-conference, which takes 15 minutes. How do you know that the news is ended? My problem is that newsevents can be unpredictable, both in time as in effect. And the effect can be a big loss, compared to the small profits you gain normally.

Roland
70
Roland  

Maybe you are right, however some pairs are more stable than others.

I will now make adjusments to my arbitrage expert. It will log when the difference occurs between pair and synthetic pair and when the difference ends. I will post results here.

designbuyers
9
designbuyers  

Hedge EA How to make orders in same time

Is there such expert to make trades with hedge like this image

I'm Not sure is it wrong section I'm asking ??

w4rn1ng
286
w4rn1ng  

Working for/in a hedge-fund as a trader

Hi all, i was thinking, what if i want to work for a hedge-fund and trade others people money, where i can go, which who i have to talk ?

How can i get in touch with a hedge-fund ?

Have you ever thinked about work for a hedge-fund and trade high quantity of money ?

jet
409
jet  

Talk to me. What do you have to offer?

FXBabe
272
FXBabe  

Hedging

Hi,

Im trying to understand what hedging is. Is this it:

take for example company A and company B.

These two companies are in negative correlation. so when A goes up B goes down.

So suppose theres a news, share price of company A goes up but the news does not effect company B that much (so it goes down not as much), so then we make money, because gain in long position on company A is greater than the loss in short position in company B.

Similarly, if its a bad news for company A, then company A will go down little but company B will shoot down much more. So gain in company B is greater than loss in Company A.

Do any corrency pairs work in this way?

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