Hedge Calculator - page 5

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Rumi
25
Rumi  

Dido!

I agree with WNW. Your contributions are terrific and lots of us here (including myself) are learning a lot and observing this thread with great interest. I believe not enough people mention this in forums and the tendency for negative comments get more attention yet few take the time to mention the positives and we take them for granted because most feel they are implied and unneeded so, to sum up for every negative comment looms 5 -10 positve comments that just haven't been shared publically.

I hope you stay on this thread atonix. We enjoy your contributions greatly.

scottyb159
66
scottyb159  

Atonix,

I really hope you decide to stay in this thread, I think we are working toward something and you are a big reason. I do not believe anyone meant to challenge your knoweldge here, it is clearly more than than the most of us (if not all.) I am still very interested in seeing your technique, because from your threads I have begun to wonder if you feel there is any hedging method that works (I know you do, since you have a method.) For me, I believe there are very good methods that last for finite periods of time. You can backtest and forward test things to death. By time you finish testing a profitable method, it could turn. You need to adapt. This is the reason I believe EA's need constant monitoring. Clearly, if you had been a long term carry trader for the last seeveral years, you did VERY well. This could end tomorrow, could have already ended or could last 10 more years. We simply have no idea. I am developing my method to take advantage of it (assuming its still valid). The key to my method is having jump off points to avoid a major reversal. This could qwhipsaw me a little, but I can accept that in exchange for the added security.

Hiu Yan Li
168
Hiu Yan Li  

Hedging

Hi, I came across this thread as I've done a similar heding EA, hedge 3 pairs.

I think the thing to include in calculating the lots are basically:

1. account balance

2. margin of each pair

3. pip value of each pair

4. swap value of each pair

5. daily range of each pair

Then you set your risk preference. If you want to make profit out of swap, then sometimes you cannot get a perfect hedge. In other words, if you want to mainly profit from the discrepancy (profit of one pair exceeds loss of other pairs), then you may lose on swaps.

There also situations where you can profit from both. My experience with 3 pair hedge is that 3% of account balance is an easy target to achieve now. but things might change.

My two cents:)

WNW
636
WNW  

Could one simply buy a high-yield interest pair at one broker, and then sell the same pair with a different broker who does not pay or charge interest?

drayco
37
drayco  

Does anyone have a list of dealers that don't pay or charge interest? If so, please share.

WNW
636
WNW  

I think Crown Forex neither charges nor pays interest.

I'd first like to hear some feedback from the more experienced forum members.

scottyb159
66
scottyb159  

I think brokers that have no interest just charge a fee that is higher than the interest, so it will not work.

I am currently waiting for an entry into the eurusd chf swap.. we are currently in a pullback of eurchf so waiting for right opportunity. Entry is obviously key to these methods.

Hiu Yan Li
168
Hiu Yan Li  

Hedging EA Performance

Just sth to add to my last post on it.

I think the critical factor about hedging EAs apart from the above mentioned considerations, also should take note of requote, to avoid EA open or close unbalanced pair, e.g. open/close 2 pairs in a 3 pair hedge.

The other thing is sufficient free margin to cover floating loss. Because if you want to make swap profit out of hedging, then you can hardly make a perfect hedge, and you can hardly make profit out of it. It's only when there's discrepancy in the pairs that you made the money. On the other side, the discrepancy also means floating loss. To handle the floating loss, enuff free margin is critical. So far i find an initial marging level larger than 160% should be fine, with this level, it can handle drawdown of about 40%.

With these principles in mind in designing the hedge EA, 17.67% gained in 3 days of trade is very achievable. Attached is the performance of the EA I created, it's a 3 pair EA, still testing but with quite impressive performance with the apreciation of GBP against low interest currencies recently. It made 9 355.40 on a 50K account, 18.71% gain in 3 trading days! 12 hours a day 'coz I turned if off when I sleep. The profit targe is set to 2.5-3% of account balance, as u can see from the image, percent floating (profit/balance) is also monitored, most of the time it's around -5%.

I hope to finetune it and later can post it so ppl can help me test here before let it go commercial.

sam1:
Their email addy is true underscore north at email dot com (true_north@email.com)

I just got a reply email from them, so I'm sure the email addy I post works.

Here's what I've got from them. They don't have a web site since they don't need one, they are a group of offline fund managers (IB I guess) from the pacific regions. Selling of the hedge calculator is not their main priority or should I say "not their main source of income". The Idea of selling it comes from people who can't afford the minimum required to invest in their managing funds. And lastly, all the sales generated from the selling will proceed to their foundation funds and use in for charity purposes in the future. hmmm... seems its for a good cause if what they claim is true.

I also ask if they are aware of the Freedomrocks hedge and if they copied their strategy from them. Their answer is yes they were aware of it and indeed they have a little similarity. No they didn't copy it from FR. The hedging strategy have been out there since the beginning of retail brokers came in the forex scene. Anyone can trade such kind of strategies if they know how to divide the correlations pairs to its proper proportions.

So the question now is if it works. Yes it works, that's why I didn't gave a second thoughts to share it here. My equity increased 47% in a span of 2 months, with just using the conservative settings on the hedge calculator.

I also requested for their performance results which they don't normally give out. On the statement results I attached, I was very impress with the results of their 4th quarterly cycle. 17.67% gained in 3 days of trade.
scottyb159
66
scottyb159  

Boostrade,

At the margin level you are trading you will lose the full account with one slight change in correlation. The few days you used happened to be good. Your method is by no means a hedge and actually a pure directiobnal trade. It doesnt look like swap has any place in your system. Not meaning too be critical, but read all the messages in the hedging threads to see what I am saying.

boostrade:
Just sth to add to my last post on it.

I think the critical factor about hedging EAs apart from the above mentioned considerations, also should take note of requote, to avoid EA open or close unbalanced pair, e.g. open/close 2 pairs in a 3 pair hedge.

The other thing is sufficient free margin to cover floating loss. Because if you want to make swap profit out of hedging, then you can hardly make a perfect hedge, and you can hardly make profit out of it. It's only when there's discrepancy in the pairs that you made the money. On the other side, the discrepancy also means floating loss. To handle the floating loss, enuff free margin is critical. So far i find an initial marging level larger than 160% should be fine, with this level, it can handle drawdown of about 40%.

With these principles in mind in designing the hedge EA, 17.67% gained in 3 days of trade is very achievable. Attached is the performance of the EA I created, it's a 3 pair EA, still testing but with quite impressive performance with the apreciation of GBP against low interest currencies recently. It made 9 355.40 on a 50K account, 18.71% gain in 3 trading days! 12 hours a day 'coz I turned if off when I sleep. The profit targe is set to 2.5-3% of account balance, as u can see from the image, percent floating (profit/balance) is also monitored, most of the time it's around -5%.

I hope to finetune it and later can post it so ppl can help me test here before let it go commercial.
Hiu Yan Li
168
Hiu Yan Li  

Thanks for your comment:)

Hi Scottb159,

Thank you for your advice. Even it's critical doesn't matter, it's still valuable advice to me.

I understand it's not a perfect hedge 'coz if it's perfect hedge, then, there wont be any chances of getting the profit, also if you make it near perfect hedge, then u'll need to buy many more lots of low interest rate currency than the higher paid one, ending up losing on swap.

I trade this system because I think there must be a reason for such heding or arbitration, otherwise why ppl spend time on it, and the time i spent on it, a month time, i find there is certain link where when one goes strong, the other or other 2 goes weak, may not be exactly the same pips or values, but rought the opposite direction, so there's still some counter forces I think.

I actually aim the swap profit here and i think allow some room for the fluctuation I can pocket the swap profit in the long term.

Now maybe you think 160% margin level is too low. It could be. On the statement it's actually set at around 200% which should be enuff? And as I said, I'm looking forward for some unbelievable de-correlation and see how the system work.

Any more advice, suggestions, comments, critical or not are most welocme, that way I can improve:)

Thanks again and wish you good luck on your trading!

scottyb159:
Boostrade, At the margin level you are trading you will lose the full account with one slight change in correlation. The few days you used happened to be good. Your method is by no means a hedge and actually a pure directiobnal trade. It doesnt look like swap has any place in your system. Not meaning too be critical, but read all the messages in the hedging threads to see what I am saying.
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