Continuing from last time....
So the few of you who stuck around with any sort of interest after hearing "carry" "hedge" and "grid", are probably asking OK what is this crazy method.
Posted by: Fay in technical analysis, commodities on
May 27, 2008
Posted by: Fay in technical analysis on
May 25, 2008
Hello Everyone, First of all let's congratulate ourself with the new blogging system ircforex have now and let's thanks Dave for his efforts.
Now, I'll try to explain my point of view about the EURUSD as much as I can, with charts ofcaurse. well, when looking at any pair we start from the monthly charts than the weekly and so on..
This is a brief introductory to my system.
The overall basis is to collect the massive moves of two pairs on a daily basis, and then carry the losses. The two pairs used have a good negative correlation to each other and as a result react as a hedge as well.
EUR/TRY and USD/DKK
As you can see this is a relatively strong correlation.
now we don't just place a trade on both and hope one gains profit, sorry that's just a losing scenario.
we are using a grid method on both and only short. the result is when one goes down and shoots through our orders we collect a small % of the move on every take profit(TP). the other pair will in most cases not go through any of our orders. this is beneficial as it reduces any draw down.
Now we do end up with many orders not taking profit, and its not that big of a deal as we will earn interest on these. usddkk doesn't have that great of an interest rate but eurtry definitely does, at around 11-12% each order is also small and only gains a small % on the account so the draw down is again minimized by that fact.
I will post more details later.
Cont'd
