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I have today been thinking about some hedge-ideas. I know that there is something that calls hedge-ring that includes more then 2 pairs to hedge up for one another.
I have read somewere (don't remeber were) that this kind of rings works best with AUD/USD involved.
Anyway... I can't find any links to some of these systems. Would some one please help me out? I have searched not only in this forum but i just can't fins any... maby i enter wrong words in the search box...?
Well... one more question. These kind of hedge rings are they used only for the swap or is it possible that it can move in favour for you so that the spread is not just overcomed but you even end up with profit in pips?
Thank you kindly But that kind of hedge is not what i aksing for. That kind of Swap-hedge i allready doing. I now whant to exteend my hedge and test out something different.
Something like:
Sam
what software are you talking about ?
can you attach it
Sorry Todd, I can't attach the software. I might violate the forum rules. You have to subscribe for it, It's a very wellknown software for hedge trading.
Instead, I attached the possible outcome of the 4 currency pair and lot size allocation I suggested to jolimoney earlier.
What software are you using ? forexforsmarties or freedom rocks or others ?
Quote:
Originally Posted by sam1
Sorry Todd, I can't attach the software. I might violate the forum rules. You have to subscribe for it, It's a very wellknown software for hedge trading.
Instead, I attached the possible outcome of the 4 currency pair and lot size allocation I suggested to jolimoney earlier.
^ FreedomRocks. But the above "lot ratio" I shared has nothing to do with FR. Different approach with same logic, it basically buying and selling the 4 major currency all at the same time while earning swap.
As far as hedging correlated pairs is concern, the safest pairs to hedge are eur/usd and usd/chf, though low volatility and lesser swap gain, those are the safest.
You can add gbp/usd to the 2 currency pairs I've mentioned for a little more volatility. I personally don't hedge the 3 major pairs, because sometimes 1 of those pair will go off the range, and the hedge will be off, like what happened during mid of March, the cable (gbp/usd) was heading north but the euro (eur/usd) was just ranging for days and swissy (usd/chf) was heading south. It is completely out of hedge.
It is also very important to pay attention to fundamentals when hedging. If you heard or found information that carry trade is unwinding (like last Feb. 23, global financial turmoil) stop hedging.