can someone explain to me what these guys are trying to do please - Page 3
Page 3 of 4 FirstFirst 1 2 3 4 LastLast
Results 21 to 30 of 37
  1. #21
    Join Date
    Dec 2006
    Posts
    99
    oanda allows for carry trading though. what we are talking about are using two different accounts with 2 different brokers.

    what im asking is can you open a position that will make interest even though the market is going the other way and hedge the loss in a swap free account. that way the swap free brokers are not getting upset then close down the account.

    would the interest paying broker cup a fit if you try to hedge the market this way? if you are making interest but loosing money?
    Last edited by honeb; 12-23-2006 at 10:53 PM.

  2. #22
    Join Date
    Dec 2006
    Posts
    124
    Quote Originally Posted by honeb View Post
    well, im a little worried about the fact that the no swap broker can close your account down if they suspect that you may be hedging and costing them money.

    well couldnt you wait till the maket that you are buying to collect interest is in a down trend and then buy at that point so that the interest paying account goes down while you collect interest. and then you can do the opposite in the no swap account and have the balance increase? will the no swap broker have a hissy fit over doing this? is what im saying even making sense?
    I don't think it should matter to the swap broker. he'll lose his money whether it's an up or a down trend, unless pipbull's right and then he'll try to make his money by taking the other side of your trade.

    I see a different way, though. Just don't rely totally on this hedging strategy, use it as a way to improve statistics, and make other trades as well on you non swap account, that benefit your broker (like long USDJPY for example).
    this way you cover his expenses by trades you wanted to make anyway and everyone's happy.
    problem is, again, capital...
    you'll need a massive one if you want the swap thing to pay off.

    regardless to all the hedging thing, I'd like to verify what pipbull said with the experts. guys - if any of you can confirm (or deny) what he said, about brokers making money from spotting weak traders and trading against them - please share. this is not something you mentioned in the school section...

    thanks!

  3. #23
    Join Date
    Dec 2006
    Posts
    99
    i just read a article that talked about using another broker that just doesnt pay or charge interest or has a lower differencial to hedge the same pairs.
    http://forexfacts.port5.com/index2.htm

  4. #24
    Join Date
    Dec 2006
    Location
    Cairo, Egypt
    Posts
    327
    May I have my input on the matter?

    To benefit from Interest Payment you have to do the following:

    1.
    Open an account with a broker that pays/receives interest on Carry trades.

    2.
    Open another account with a broker that does not pay/receive interest on Carry trades.

    3.
    Long a high-yielding currency versus low-yielding currency in the first broker, let's assume we went long GBPJPY!

    4.
    Short the pair you've just longed in the second broker (which won't charge or pay any interest) so we went long short GBPJPY

    Now we have equal positions on 2 different brokers, but we are receiving interest payment on our long GBPJPY and that's increasing our earnings.

    You only need a good starting capital, and protection against margin call.
    This is very profitable If you do not want to trade the market.

  5. #25
    Join Date
    Dec 2006
    Posts
    184
    Quote Originally Posted by parsush View Post
    I don't think it should matter to the swap broker. he'll lose his money whether it's an up or a down trend, unless pipbull's right and then he'll try to make his money by taking the other side of your trade.

    I see a different way, though. Just don't rely totally on this hedging strategy, use it as a way to improve statistics, and make other trades as well on you non swap account, that benefit your broker (like long USDJPY for example).
    this way you cover his expenses by trades you wanted to make anyway and everyone's happy.
    problem is, again, capital...
    you'll need a massive one if you want the swap thing to pay off.

    regardless to all the hedging thing, I'd like to verify what pipbull said with the experts. guys - if any of you can confirm (or deny) what he said, about brokers making money from spotting weak traders and trading against them - please share. this is not something you mentioned in the school section...

    thanks!
    Parsush,

    I'm glad you brought up this point again. Based on some reading i've done, i'd like to present an alternate scenario for discussion. I still maintain that brokers can and do take the other side of our trades but they do not necessarily do it by literally picking and choosing the weak traders. Again, unless i am mistaken, i beleive what happens is brokers play a balancing act. For every buyer there must be a seller so if at the end of the day or whenever, they see that there were 1000 units going long but only 800 units going short, they will sell another 200 units short to make up the balance. Since most activity is from speculators, odds are that they will end up on the other side of our trades. The result is the same but the dynamic is perhaps a little different than what i first suggested. In any case, experts please feel free to chime in

  6. #26
    Join Date
    Dec 2006
    Posts
    184
    Quote Originally Posted by topchess View Post
    May I have my input on the matter?

    To benefit from Interest Payment you have to do the following:

    1.
    Open an account with a broker that pays/receives interest on Carry trades.

    2.
    Open another account with a broker that does not pay/receive interest on Carry trades.

    3.
    Long a high-yielding currency versus low-yielding currency in the first broker, let's assume we went long GBPJPY!

    4.
    Short the pair you've just longed in the second broker (which won't charge or pay any interest) so we went long short GBPJPY

    Now we have equal positions on 2 different brokers, but we are receiving interest payment on our long GBPJPY and that's increasing our earnings.

    You only need a good starting capital, and protection against margin call.
    This is very profitable If you do not want to trade the market.
    You said it right...we need to protect our accounts from margin calls. If you keep an eye on your account and if you are approaching a potential margin call, then just close both positions from both accounts and take the profit from one and replace it in the other. Then re-open both positions again. Would this be acceptable or would brokers flag this kind of stuff? But again, my skeptical insticnts kick in. Doing this would really make this a risk free way to collect interest indefinitly. Too easy?

  7. #27
    Join Date
    Dec 2006
    Location
    Cairo, Egypt
    Posts
    327
    As you say;

    Too easy, and too good to be true? But it's really true.
    It's risk free business in the risky FX world for people with initial big capital.


    I am sure your broker does not reserve the right to prevent you from longing GBPJPY or any interest-payment pair.

    The whole world is long GBPJPY and that's why they sent the pair thousands of pips up.

    They collect interest from Carry trading, why should not you? I do not think your broker will flag this, and If they do, they are scams!

    I believe many of the Short Yen and Carry Trade fans have funds protection by opening opposite position with no interest.

    Just try to make closing / and re-opening positions less frequent. To do so, start with a big initial capital, and give GBPJPY or your pair the room to trend 500pips or 1000pips until you close positions before margin calls. Easier? Cashout earnings, deposit..repeat!
    Last edited by topchess; 01-04-2007 at 03:50 PM.

  8. #28
    Join Date
    Dec 2006
    Posts
    184
    Quote Originally Posted by topchess View Post
    As you say;

    Too easy, and too good to be true? But it's really true.
    It's risk free business in the risky FX world for people with initial big capital.


    I am sure your broker does not reserve the right to prevent you from longing GBPJPY or any interest-payment pair.

    The whole world is long GBPJPY and that's why they sent the pair thousands of pips up.

    They collect interest from Carry trading, why should not you? I do not think your broker will flag this, and If they do, they are scams!

    I believe many of the Short Yen and Carry Trade fans have funds protection by opening opposite position with no interest.

    Just try to make closing / and re-opening positions less frequent. To do so, start with a big initial capital, and give GBPJPY or your pair the room to trend 500pips or 1000pips until you close positions before margin calls. Easier? Cashout earnings, deposit..repeat!

    I guess now the trick is to find a good no interest dealer. Do you know of any?

  9. #29
    Join Date
    Dec 2006
    Location
    Cairo, Egypt
    Posts
    327
    Quote Originally Posted by pipbull View Post
    I guess now the trick is to find a good no interest dealer. Do you know of any?
    Marketiva is a stable broker for my experience. Check them!

  10. #30
    Join Date
    Jan 2007
    Posts
    27
    Quote Originally Posted by honeb View Post
    can you really get away with hedging in the same account? i thought brokers would shut you down for this.

    also, how would you find a broker that pays and doesnt pay interest?

    thanks for the imput pipbull.
    Why not just trade two different contracts of a FUTURES currency...buy one and sell the other...that called spread trading, and doesn't require two accounts..

Forum Sponsors

Similar Threads

  1. Replies: 6
    Last Post: 10-20-2009, 07:16 AM
  2. Can someone explain this?
    By Thillu in forum Forextown
    Replies: 3
    Last Post: 08-13-2009, 05:07 PM
  3. Can someone explain this.
    By MartinSchmidt in forum Newbie Island
    Replies: 4
    Last Post: 11-04-2008, 10:12 PM
  4. can someone explain dis for me ?
    By havenoidea in forum Newbie Island
    Replies: 2
    Last Post: 06-19-2008, 09:12 AM
  5. Replies: 17
    Last Post: 09-29-2007, 04:45 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
"There is nothing so useless as doing efficiently that which should not be done at all."
Peter Drucker