Almost....Lets assume 1.2=1, next I look at the correlation. Lets assume with have 90% negative correlation. I multiply the 1.2 *.90, so I purchase 1.08 to 1 of the chf. The closer to perfectly correlated the closer to the actual 1.2 I will get. While this will not be exactly the same, I am guessing its damn close. So close in fact that the difference could just as easily help you as hurt you. For example, if under my formula I end up buying .2 more units of chf then your method, its a total guess which currency will be the one out pacing the other in the hedge. We know these are not perfect hedges so the slight difference makes absolutely no difference. I have run a bunch of demos and its quite interesting that no matter how I allocate the lots somtimes one method is better and other times other methods are better. So true north, fr, forex assistamt, forex for smarties , you or me it doesnt matter. The whole key is entry and exit. Lot differential is only a VERY small part.

^ You have a point there. Even if you buy equal lots on both pairs, for example 1 lot euro, 1 lot swissy, from time to time you will end up in profit, its just the matter of time. What important for me is to find out how to get the possible ratio so that the drawdown period will be minimal. I agree on what you've said that slight difference makes absolutely no difference.


No, I don't open both sells positions if I had 2 buy positions opened. Even if I do, I'll make sure that the sell margin used is less than the buys position. Since it is riskier to sell than to buy.

Ok, that makes sense. I am sticking with buying only. I will only sell when I am exiting. The one thing setting the two of us apart from FR people is not suing the grid idea and we are adding in tech analysis with this to control against a disaster. FR's ideas are good but the set it and forget it idea is dangerous. USing some tech analysis and combining ideas is looking very good. I will say, I sleep a whole lot better than I ever did when I was purely directional trading with an overnight position. This has also taught me how to maintain a good low risk level.

Seems like a perfect time to open a hedge position. Stochastic and CCI on 1hr and 4hr shows EUR/CHF now oversold. Any comments?

This thread also shows a profitable hedging system. It mabe similar to the one which is shown in the calculator...Not sure...

http://www.forexfactory.com/showthread.php?t=24673

I have tried on demo for one month with $2500 and got a profit of $700 approx.

I have put 5 ots in all with one lot each for five consecutive days.

I am trying now with $5000 with one lot for 10 consecutive days.

Yeah, I think is the same as true north's 4 pairs balanced hedge, except for some difference in lot positioning. Speaking of true north, I just saw on the other forum the they already had a temporary website, its truenorthfx.

SAM1,

WHile I have maintained interest in this thread, I think you should come clean that you are in fact True North or work for them. You say here that you "saw on the other forum"...when in fact you are the person that posted it on the other forum. Come on, we arent idiots and you are costing your company credibility.

Even if Sam is advertising under veil, hiding, the hedging methodology seems to wok well for the 4 pair strategy. No idea about 2 pair and 3 pair.

The forum site I'm referring to is not forexfactory, its in goldenmoneytree. Not because I'm the one who share it here, it mean I'm the owner. We have been discussing about the formula they are using here on this thread and over the PM, I would not care to discuss it with you if I already knew the formula. Don't tell me because I didn't gave you the copy of the calculator in exchange of your forex-assistant access, and you suspecting me as the owner or working for true north? I didn't agree for the barter is because its illegal to do so. If that's the reason for your suspicion then yes I think you're an idiot.

Sam,

I was not the one who ever asked you to give me their worksheet. I didnt want it. If I wanted or ever want it, I will gladly pay them for it. $200 sure doesnt matter in the world of trading forex unless you are extremely undercapitalized. All I asked was for you to tell me their numbers to compare and that is what we were doing. Sorry, if you are not involved with them it just seemed odd that you posted same thing here and forexfactory. Lets let it go and move on. I have been in a hedge now for just about a week. FInally turned positive Friday. Using the Eurchf and TA for the entry on the hedge. So far it is quite clear that entry is key. The interest on the hedge is very small relative to the swings in price. As I also said earlier, it doesnt seem to me that precise lot sizing is as important as we might be making it. Since its only been a week of real trading in it I cant say much, so we will have to see. I can see how people not trading within the hedge could face a real issue if the pair turns very profitable. People will always want to take it down to grab the pips but that will conflict a bit with the hedge. During the week I did make several trades within the hedge that worked out fairly well while the hedge fought back. I gues I am making an argument that FR or one of these other methods could work out well in range market (but we knew that already)