eur/usd vs. usd/chf – nearly perfect opposing action
accnt 1 - sell eur/usd and sell usd/chf - - basically a hedge
accnt 2 - buy both pair - again basically a hedge
now you don’t care which way a move goes - -just be there to add positions?
neither account will go down in margin because they are nearly perfectly hedged - -so
when lets say eur/usd starts trending – put on extra positions to take advantage of the trend -
so with some very exact rules - I can’t see how you would lose?
What’s wrong with this? Everything.
Let’s skip over the multiple accounts portion for simplicity. Buying both highly [inverse] correlated pairs means you will remain nearly flat. As one pair gains the other pair loses. You may as well take a position, long or short, on EUR/CHF. The end result will be the same. As long as EUR/CHF remains flat, so too will your account. As it starts to move one direction or the other, so too will your account (in either profit or loss).
You can now close your losing position and reverse it to follow the trend or add to a trending position if you like without all the contortions of trying to so-call hedge (which it is nothing of the sort) your way to profit.
Since your original aim is to wait until one pair or the other starts to trend a given amount and then add positions to the trade… why not just wait until one of the pairs starts to trend as you define it and take a trade on that pair?
What you are doing is seeking an advantage where there is none to be had.
If you reverse your strategy, however, there is a potential for profit. If the highly correlated pairs go out of correlation and hit extreme limits then you can attempt to trade both pairs returning the mean. You can make consistent profits that way – until the eventual movement of both pairs continue farther and farther from the mean and exceed the limits of your account. 
There will be a negative difference between the swaps. So even if the position were not go against you there still is a premium the pay every day… It is not a big number but it can add up… Also when one account starts to loose you will need to transfer from the winning account to the loser so no gain until you add to the winning position or move funds and add to losing account in a reversal scenario… Plus you paid to make the trades too and that will be an opportunity cost.
Yes very exact rules… can make a hedge work… moving money between the accounts would be the same as reversing the position or changing the hedge. If I were to do this I would rather (trade or hedge) correlated pairs against each other and use divergence to for entries and exits… However… this is not the kind of trading I do because I focus on the positive swap among other things to offset some of the dealer advantage over the retail trader, ie… spread and other opportunity costs.
Only other thing is that your losing account could get a margin call, forcing the trade before you transfer fund from the winning account.
Cheers.
Exactly… I can tell we are on the same page here… deliverance is the key to a correlated hedge.