Diversified currency savings accounts.

Discussion in 'Forex' started by DepthTrade, Dec 7, 2018.

  1. Hello and welcome!
    This strategy uses the same free floating cash approach as all large banks, but with the tactical advantage of intermittent currency exposure utilizing a probable edge.
    Think of this system as exactly the same as holding cash in a bank account with zero leverage and the same risk parameters. This strategy is extremely diversified and as such, is not subject to over weighted moves due to all your cash being held in a single currency bank account.
    The goal of the system is to minimize the volatility associated with a traditional cash bank account. Substituting single currency volatility and buying power decay, with account stability and growth.
    Hold your cash exposure hedged and rotating with the backing of 8 well respected countries, instead of your current single currency bank account. Our risk is minimized using the following currencies: Australia dollar, Canada Dollar, Switzerland franc, Euro member countries, United Kingdom pound, Japan yen, New Zealand dollar and the United States dollar.
    All exposure is done using zero leverage and never more than total available cash.
    A demo account will be used to track progress.
    DepthTradeFX demo start.png
     
  2. Here we go, have entered the following positions.

    for ET 12 07 18 demo start.png
     
  3. Here is a mid day update on the account. It is currently up about +0.24% and $242. As you can see I was short Gbp and there were pretty big moves in Gbp. Compounded annual growth rate (CAGR) is at +13%.

    for ET 12 10 18.png
     
  4. A minimum-variance basket of the 8 majors -- you've created the Ricardian IMV! Or maybe just a better SDR.

    How do you calculate the instantaneous weights? How often do you rebalance?
     
  5. Hello Kevin
    Maybe that's what I created, but it comes down to the timing it's applied and re balanced. The weights are by value in USD, it could be by volatility which seems like it would make more sense, but that opens up even more variables. I believe this way makes it easier for people to follow, especially if they're using lots and partial lots. This is re balanced every couple of days.
     
  6. Mid day update. Still holding, gains have crept up a little more.

    CAGR about +17%

    for ET 12 11 18.png
     
  7. Adrienne DeMarco
    Dec. 05. 18

    With Saxo’s top outrageous predictions trending for 2019 with the theme“enough is enough” I have to wonder if they’re on to something, unless this is just a marketing genius for the optimistic Trader. Or I wonder if it’s a huge risk with a dangerous miscalculation for future events with investors and your average trader. Could it be media manipulation or some sort of self-fulfilling prophecy of the chief economist Steve Jakobsen to see our future and an economic revolution, a revolution against globalization. For over a decade Saxso has been predicting outrageous predictions. Could these all come true?
    Right now I’m only going to touch on 3 of the 10. One that grabbed my attention, Trump may fire Powell. Trump screams “you’re fired Powell” and Powell who is constantly scrambling trying to clean up the mess Greenspan and Bernanke created. We remember that at the FOMC Powell and very few signed on for a rate hike. With the U.S. economy in shambles already, literally one rate hike away from bursting our economy and U.S. equities. So it’s not too far off to think that Trump would fire Powell. They also believe that he would be hiring fed president Neil Kashari instead. Kashari seems to be open to the idea of the feds serving government. Setting the president up for the 2020 election by tightening the monetary policy and bringing the GDP up a significant amount, maybe not the six percent that Saxo's predicted, but still a significant amount of deleveraging happening on all sides. However, I guess the GDP wouldn’t even matter if number ten on their list it comes through. That would be that the world bank and the IMF only focus on productivity instead of measuring the GDP that is unable to take in to account so many other issues. This could be why everything else is rising cost of living, food, most of everything but the working per hour remains the same, because the GDP refers to output per hour worked, and extreme broad measurement of the nation’s economic activity. Not taking in so many other factors environment, environmental disasters, a technology based service, the list goes on and on. This may be perhaps far in our future, way further than 2019. But it’s definitely something to think about I wouldn’t base my trades on it. One never knows, we could get a level playing field after all.
    Some don’t seem too far off. Like that the central bank would launch QE1 down under, on the housing market in Australia. In which economics specialist Harry Dent predicted a while back now, as one of the biggest financial crisis since the 1930s. Now Saxo’s is predicting over leverage over valued mortgaged back that would make the lenders leaving banks frozen and further tightening on lending, some that couldn’t cover it independently would collapse. For the first time in 27 years Australia will fall into recession, and QE1 is forced.
     
  8. So, I know NOTHING about forex. But is this keeping an equal weight in the big 8 currencies? If so, isn't it a "mean regression" strategy more/less? IE you keep equal weight, so if one currency takes off this is selling some of that and buying the others?
     
  9. They

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  10. Hello They, thank you for your interest in my work
    Impressive, they are totally over weighted vs the dollar. Opposite of what I am doing and if you averaged your capital among the majors, you'd be down -4.49% YTD.
    I'll check it out more once I get to a café, but I can imagine fees from constantly (re) unbalancing it everyday and penalties kill profits even more.
    I can almost guarantee one will never make money off that site, at best break even after oscillating between wins and losses.
     
    #10     Dec 12, 2018