Payoff on the short would be the preference, so timing it right on the H4 candle fire and forget
whats your omega on your option?(sorry im too lazy to calculate it now with the numbers you provided so im just asking out of lazyness)
have @PipMeHappy take a look at it. he is a specialist in usd/try.
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Ah, I wish! I know nothing about options!
UsdTry has been rising not because of Usd strength but because of Erdogan’s coup and political turmoil, I reckon; however, waiting to short UsdTry, given that it is at record highs after its hyperbolic rise of 2015-2016 and it is unable to make higher highs at present, is a time well spent, given also that UsdTry shorts would benefit from rollover/swap due to the Central Bank of Turkey’s interest rate being at 8% - if that is, you intended to hold your short for some time.
There are also differences in quote charts: for example, FXCM (demo) shows a weekly chart for UsdTry with two peaks both around 4.0, whereas of you looked at Turkish Lira (March 2018) futures on CME you would see that the two peaks are around 4.4 and then around 4.1.
What is interesting to me is that the CME futures show a massive selling volume around the second peak (4.0-4.1 area), after which there has been a decline of about 2000 pips: given that we must look to currency futures for volume data, and that correlation between those and spot fx is strong, I would say that there is a lot of buy-side selling of UsdTry still to come.
Personally I would wait for more confirmation, especially as the pair has been sitting for thee days on the 100-day moving average but unable to break it, and that the 200-day moving average is only 1000 pips below it: a true break of both of these would open up in my opinion a huge downside potential, but again momentum in futures sell volume would be good confirmation.
FXCM weekly UsdTry
CME (March 2018 expiration) TRY futures, weekly:
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Nice post, you seem to have a lot of info on this pair - are you close to it for a particular reason
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Ok well that means $34.8 per pip not $8 as I interpreted it. That will affect the maths quite a bit, but the priciple holds.
{Edit, This is not a USD denominated pair, could somebody confirm then that 3.48 contracts represents 34.8 dollars ? or has the demomination of teh reference currency changed that ? ]
Hi ropunzel.
In Jan. 2017 I started this thread:
Hi there. What do you make of short trading the USDTRY Swap on Wednesday where it is delivered at 3 times the usual rate. I have been testing it now for a little while with an R:R 1:9 with a risk of 1k per trade, where the typical PnL on a win trade is £100 + roughly £250 - £300 on the Swap added in and the increase in spreads around market close or usually just after reopen hasn’t knocked the Win rate too much off balance so far, so I am getting around 85% wins.
Something like this
SL - Red Line
TP - Green Line
Break even - Gold line
The break even is above the open price as the Swap puts the trade in profit immediately and the market would have to move against you to break even.
I suppose since you are working with the M5 candle, you could trade everyday of the week, with a lower swap, but restrict your trades to situations where the short term trend is clear bearish
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Hello Ropunzel,
did I get this right: you entered a 40-pip profit target at 1k?
On current FXCM value, for example, that would be £0.02/pip x 40 = £0.4.
I am looking at your chart and I see the net swap at over £222. which is good…
but I am not sure I am reading this graph and the info right.
Anyway, you seem to know what you are doing… Your S/L is above that 5m-chart peak,
although for overall positioning I would (personally) go to a higher timeframe, though your
risk tolerance can be adjusted lower accordingly.
For an account with an equity such as yours (currently above £122k) I would ask why just
entering a 1k position, but again that is entirely good and proper if you want to risk low.
Greetings, the lotsize is 4.28 and the SL distance to capture the risk is 123.80 pips, I built the EA to do the math so not sure on the numbers but it will work out to 1k loss - or actually a 1000 - 222 = 778 when you take account of the net swap.
Given the relative distance of the SL and TP assuming a random market with no edge the win rate should be around 90% on these trades. The trades are short term overnight only., 10m - 2 hr window depending on how the market moves.
I think basically you can find edge here by taking advantage of the Swap being so high - it’s built in to the trade, rather than having to take a a real view on the direction (although they are going to be shorts)
If the market is random, the the win prob depends on the relative distances of the TP & SL so in theory there no edge to be had, especially when you consider the commission and the Spread. the swap changes the maths so that a lose is effectively -750 whereas a win is 350.
the win rate you need for that is (750)/(750 + 350) = 68% but the relatives distances (random market) suggests around 90% on the win rate - so ther is edge in the trade without doing much.
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I get it now, okay I thought that I had read the chart info wrong, thank you for the clarification.
I see what you are saying: win or lose, your swap will either enhance your win or cushion your loss,
although the loss will still be a loss - no system can prevent that, obviously.
When you say short-term overnight I presume you mean like an End-Of-Day strategy, kicking off after the NY close?
Anyway, go for it and see how it goes!
is the current swap on this pair yielding more than the cost + spread of opening/closing a position?
at 4 lots (£400,000) the trade cost would be £40 (£20 for opening it and £20 for closing it), which would easily be covered by the swap.
what is the swap over night on that position (4 lots)? $222?
well. then theres no need for trading. do profesional investing and earn money.
open position at 11:59 and close at 00:01 and pocket in the difference of $180 every day once.
Basically, that’s it.
Swap varies from broker to broker, and the Tuesday night to Wednesday morning it is x3 with FXCM.
Also, the swap is relative to size, as on FXCM (I can only speak of what I know best) the rollover rates are shown for a nominal 10k position, so if you have a 400k on it will earn you x40 rollover.
Thats the idea, except it wouldn’t be everyday just on the x3 days. the risk involved in that trade would be the market moving against you, but you can increase the win rate by having a very favourable R:R based on the distances of the SL & TP. There is some spread widening after market open, but so far when you open and position and hold it overnight there is a payoff on the swap versus the commission and the spread widening, which is quite surprising.
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see. i just made you money. without any strategy or market wisdom. market wont move against you within 1 minute you hold the position open. not at that low volume time of midnight.
One thing we have not mentioned…
From experience of trading exotics, when the NY session closes and the Asian session starts to open, the lack of liquidity causes enormous spreads, generally between 10 and 11pm (UK time); I cannot give you precise figures but recently an exotic like UsdTry (UsdZar) showed a spread of nearly 600 pips around those times… So if you banked on stops safeguarding your risk you should think about taking the stops out altogether. If MrDE’s idea of just having a trade for a few minutes is to work, you would have to see how the spread affects your closing price or ability to keep control of your risk if your EA needed a stop in place.
you never know, math is the strongest ally you can have in your battle for money 
do the maths yourself. if it yields a profit to hold a position for as little as 2 minutes or even 15 minutes, and it yields a secure profit, then the heck do it every day.
there is nothing more beatiful that secure income for which you did not had to lift a finger 3 times (2 times to open and close contract).
better to have a cow giving milk daily then to play financial whack-a-mole trying to hit a winner.
I think you are right, but the spread widening is important. I haven’t seen 600 pips so far, when did this happen?
So far I have seen around 60-70 on the average, which usually tighten within a few hours.