Hello,
So i’m sitting here waiting for the yen to move and I figure it’s on account of the news coming out that its not moving.
Then a lil light bulb went off in my head and I thought why not hedge
the jpy? (i think that’s proper terminology)
Play it short againt the GBP/JPY currency and long the CHF/JPY?
I�m not sure about if it�s a good or bad idea; there were some important news for the JPY today, an overnight call rate, which means that short term interest rates will be the main factor in currency valuation. Still, I would stay away from anything that had to do with the CHF.
I�ve seen that these days is better to be away of the market, but I don�t agree with that idea, well, I think in these days can happen really important issues, also, before the new year start.
I agree with you Mcfly, we have to be away the market when we be with our families, in between I don�t think so.
Well let me tell you, that�s a good idea but I don�t know those currencies, so I cant help you with that. But again, if someone is reading this, what Mcfly said it�s true.
For me there’s no good idea on taking a long position on any pair right now. I guess I’ll wait until the year passes and see what the implications are.
And what exactly is MCFLY saying? This thread got awfully deviated from the original subject matter, I�d still stay away from the CHF and specially from the JPY till at least next year, a quick glance to the market these days would reveal why.
Not to push either one, as i havent done enough research to identify tops and bottoms, THEORETICALLY, what you wish to do is perfectly proper as long as you manage your equity nicely.
IDEALLY, both currencies will top and bottom at exactly the same day and hour and minute and therefore your margin will remain perfect, but the reality is that hardly happens in real life.
a hedge such as that is playable in a number of ways, such as OVER leveraging and allowing the two counter directions to keep your margin out of trouble — while an ideal pro manuever, it requires being on top of the trade when a final point is arrived at, because if one is removed from the trade, the margin now goes EXTREMELY lopsided, which CAN be handled but only if youre watching it.
use decent money management, understanding at some time ONLY one trade will exist with its drain on your margin, and you can do well.
another manner is to simply EXIT both trades at the same time, which eliminates the margin situation once and for all, but it has to be done FAST when you close, probably better if you scale OUT of the trade to reduce ONE of the positions and its effect on your margin.
only for information, its a process i use constantly.
hope you understand
mp
[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !
As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !! [/I][/B]
I guess you’re right, so if we don’t want to deviate from the main subject here I guess that getting conclusions would be appropriate. I agree with MP6140 when he says that everything is about money management. I guess if you get to analyze the pairs and handle your equity on an appropriate way you can go with whatever pair you want. I wouldn’t say I am not going to trade CHF, instead I guess I find an advantage on correlation between EURUSD and USDCHF that we can probably take advantage from.
Ok then, I wish you good luck with that, but if you find a way to handle the CHF please do let me know.
Well my friend, I have to say I am in a break of trading, just trying to test some strategies. So I will probably have few tips next year when I get to see how things went on with Obama and other currencies.