100% hedging system with two brokers - page 6
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You have forgotten the spreads that are much more than swaps. If brokers does not charge Commisions you must pay 4Pips(2pips by open order and 2 pips by close order) by each trade on each broker that means 4+4=8 Pips. So if the any account margin is near 100% before covering the above spread pips you are in losing side.for that porpuse you need to wait more than 1 week for only 2-3 pips winning!
Kinds of arbitrage
Hello,
An arbitrage that I know is the triangle. Ex: price EurUsd x price UsdChf = price EurChf
Samebody know another kind of arbitrage ?
Regards,
within these pairs:
EURUSD, EURGBP and GBPUSD
tron,
you are missing a point a bit. This is not a correlation hedging system, this is 100% hedge. In this system your risk is 0 (zero) as long as you work with honest brokers.
Let me explain you again on two pairs only (no correlation required). What I do I open on Alpari
1 lot EURUSD short
1 lot GBPJPY long
On ODL Securities I open:
1 lot EURUSD long
1 lot GBPJPY short.
So, if EURUSD goes up then I lose on Alpari but I win on ODL. The result is $0 (if for simplicty I exclude spread). Whereever the price goes, my positions sum in $0 P/L.
Where is the profit? Alpari pays swap interest per position opened. ODL does not charge or charges very little.
Brokers do not mind keeping positions opened as long as your margin is more than 100%. That is the point when we close all postions. For every day that we have positions opened we earn interest. That is the whole point.
The swap is paid by brokers. Different brokers have different swap policy. Some of them have fixed daily rates (like Alpari or IBFX), some of them close all postions on day close and re-open on day open. They pay/charge only difference of the rollover swap rates (like ODL). I found out that swaps are smaller or none with the latter system.
I hope it makes more sense now.
Hello,
The idea is to find different brokers, one that has swaps and one that doesn't have(or are very small). The main idea is to have positive swaps on the broker with swaps -> free profit for you since the P&L of price action will be close to 0 as you said , but the swap will be paid every night.
Also, there are other factors that can improve your profit like :
-brokers that offer no-withdrawable bonuses : if you lose from the one with bonus and win on the other one you will also turn the non-withdrawable bonus in profit on the other broker
-spread difference
-rebates/ cash back there are brokers that offer this services .
I hope this answered your question.