Day range doesn’t matter so much…well I mean that the important feature is the change in PnL rather than the move in absolute price.
Here is an indicator reading of the candle to candle PnL on the joint trade USDMXN (Short) & EURUSD (Short) @ H1.
I agree with that.
Still, carry/swap systems are hard to backtest so forward testing would be paramount.
Have you already forward tested something like this? Swaps vary from day to day, so it is not a fixed parameter and for this reason the only way is to forward test it for a few months through all the changing swaps, wild swings, etc.
Yes the Swaps vary. But really for back testing you want to understand what the price swings are. That is if you were to hold two pairs for a cross hedge what would be:
That can all be done in a back test. From which you can find the combination of pairs with the right trade offs
Here is the problem: I have no means to backtest because I do not code or use software that can do it for me. This idea may work well but of course it may well be that through time there will be issues such as:
You may well be opening two positions that neutralise each other but you have to use double the maintenance margin requirements; also, UsdMxn is a margin-hungry pair so you would use a lot more margin on that pair even with the same position size as the trade on EurUsd. A wild swing to a 200-300 spread after hours could seriously wipe you and eat all the swap profits when pushing your margin around like this.
Even proportionally to account size, I think you could still end up in a sticky situation from which taking a net loss is the only way out.
I liked your earlier idea (from 2018) better, that is just opening and closing a trade at the Wednesday close/Thursday open: how did that work out?
How can you evaluate your ideas without being able to back test. Forward testing will take to long to filter through the ones that are complete dead ducks or worth investigating further.
I haven’t looked at USDMXN much since then. I decided against spending time on it for something else that was already working. The risks are inherently the same or worse than the above proposed method. The trade risk i.e. the market moving against your short position is too much without some kind of hedge.
Either a normal hedge on the same pair i.e. USDMXN short, the USDMXN long after market reopens and triple rollover has been banked, then wait till spreads normalise and exit.
Or a cross hedge.
Sure, I would love to backtest,but I have no way of learning how to, by myself.
What system are you using instead? Are you yourself using the hedged swap that you described?
why not just buy something like ForexTester for a couple of hundred?
it’s very quick and easy to learn to use it, following the instructions
it makes far more sense than trying to develop a profitable trading method without it
it’s about whether you want the odds in your favour or against you, really
as i was just mentioning in another thread, while you made your post, it doesn’t (quite) follow that a thoroughly backtested method which would have made consistent profits in the past will necessarily still make them tomorrow, but it’s still miles better than trying to trade with a method you haven’t becktested by running it over a decade’s data
that would be a poor approach, by comparison, to put it mildly
there are people (especially in forums) who will try to convince you that because backtesting is done on historical data and your trading will be done on future data, backtesting has no value. that view is total rubbish, of course, but probably they believe it themselves, on some level, or at least they hope it’s true, and sometimes (actually quite often) when people believe total rubbish, they want other people to believe it, too
Hi @flamingoproxy yes I tried a free trial of Forex Tester but it did not seem suitable for what I was trying, or I could not get the pairs that I needed, etc. so I did not pursue it.
I am quite short of time so I cannot invest in learning new systems…so until then I can only tinker around the edges.
I completely agree about backtesting, as every professional trader/money manager uses it (for a reason).
i see, yes
sorry, i’d forgotten we were talking about USD/TRY, good point!
do you think it might help you to trade something like the Euro or Cable instead, for which you can easily get the data you need? i admit to some bias on this subject, myself, as i wouldn’t want to trade anything with such high spreads as USD/TRY, myself: it seems like a way of making a very difficult activity even more difficult
Thing is, I’ve been round the block many times and it is only recently (2017-2019) that I tried focussing on high-swap pairs, EurTry being the best on the short side.
I have learnt a lot doing almost exclusively this but, of course, it opened more questions going forward. I am trying to see how and when a short-EurTry trade can be held for long periods to maximise the combination of pip-profit and carry profit. This is tricky because most money managers are bad at timing the markets in an active way, so I have no chance of doing that any better than them.
However, I have got better at using parallel sources (MSCI Turkey ETF and XU 100 BIST) to assess the strength of trend or moves for EurTry spot fx, and until the Turkish elections at the end of March I was doing well in this way. I made losses due to being in a very unstable market context but I will not take this as anything more than having misread the severity of the event: in other words, I have stopped system-hopping because stopping what you are doing without a good reason means that you have to start from zero every time.
Sadly I cannot backtest so I use the simplest possible way to trade,.i.e. focussing on holding for long periods and occasionally taking intraday trades.
MyFXBook is a useful analysis tool and it helps with seeing how many trades have yielded positive results. I do what I can but it is a hard game, like life 
Hi there. Here is a Synthetic that I traded yesterday.
The pairs are: USDCZK (Long) USDDKK (Long) 25 Lots each.
The correlation based on change in profit from one bar to the next; looking at 50 previous bars is:
These pairs are very highly +correlated.
Here is an indicator that shows the combined PnL for a long trade on both pairs over the last 168 H1 bars i.e. the most recent indicator reading shows the sum of profits and losses for the last 168 bars and so on…
Summing the combined/cumulative PnL in this way actually gives a good indicator reading/signal. You can trade the very obvious trends both ways, when the synthetic is making money (black graph > red graph) (Long-Long) when it is losing money (short-short)
At 25 lots the joint daily rollover is £207.12 going long long.
Since yesterday the joint trade is now up ~ £18,500 excluding the swap interest. As you can see from the indicator, there is still a lot of time to go and more PnL to be had before exiting this trade when the black/purple graph crosses below the red.
The highest draw down on this trade was ~ £9,000.
What do you currently use to trade?
Fxcm trading station.
just getting away from the swap for a moment, if you are looking for two pairs with a combined PnL of approx. zero for a cross-hedge, logic would have it that you would choose to go - for example- long USD/SEK and short EUR/USD, rather than short on both, as this would provide you with swap profit on both. Have you mixed longs and shorts or just focused on two longs or two shorts?
Also, in the above case, what happens on a falling USD move? And in the case of your two longs that you mentioned - both USD longs - what happens in a falling USD scenario after swap is accrued?
Finally a bit of direction again. 2000 pips this week:
Turkey ETF showing good buying volume and upward momentum, supporting spot-FX Lira appreciation.
The 2000-pip move is part of a 5000-pip move: this overall move has taken 6 weeks in total, including 3 weeks of dojis and lack of direction.
The previous move that happened from September 2018 from the all-time highs totalled 20000 pips, thus the current move is 1/4 of that.
Looks like you will have to start posting more often, PMH - Mr @dpaterso is rapidly catching up with your fine total! 
Well thank you for pointing that out. I never realized. Thought I was still top dog here!!! LOL!!!
Right. Time to climb on some more inane and useless threads. Very good for the post count!!! LOL!!!
Typical:
Hi PMH, i’d like to ask you something… as i checked, your approach to this pair is looks like the other pairs… but think about this… let’s say, Turkey is a bank… and you came to invest your money to the bank… you are asking the interest rate, worker says, “i don’t know, what Erdoğan decides”, than you are asking, “what time are you going to close down??” worker says, “i don’t know, when Erdoğan wants” you ask, “can i be able to take my money when i requested from you??” worker says, “if Erdoğan says ok, than you can take your money”… do you see what i mean?? i this sceneraios, n this situation, you can not read this pair like other paris from graphics, MA’s or support/resistance tecniques… Because, one morning, Erdoğan can say that, “close up all banks and send the money to central bank’s safe deposit” and non of tecniques or indicators or price action or graphics can estimate that…
