Oldtime, you are right. I trade mostly vstoxx future spreads. I like butterflies to trade the term structure. Pricey, but good risk/reward. Otherwise I like to trade calendar spreads on Dax and Eurostoxx 50 options.If I win a bit on the long vol, I convert into a put credit spread or call debit spread slightly otm with the idea that vol will come down a bit again and price will go up. Currencies and metals, especially copper gives a good heads up on coming vol. Outright, I am a chicken.
if you are spreading, trading costs are the least of your concerns. Since the beginning of time, that has always been the objection of outight traders. Spreading is a very messy business, and isn't going to be decided by a few trading costs. To call it arbitrage is really an overstatemet. That's what smart people with computers do. But then again, I have only been trying to spread forex for the last year or so, so I have a hell of a lot more to learn than I have to talk about.
well the problem with outright is you get stopped out on any big move Don't get me wrong, I actually made a living scalping that ES, but after five years off, I started fooling around with that ES vs YM spread. Nothing ever came from it, but in retrospect, my life expectancy would be about twice as long if I had figured that out when they first invented YM.
Ok, I´ll give some food for thought. Everybody knows AUD/JPY is inversly correlated to USD/CAD. Just take into consideration one more currency. Trade AUD/JPY + EUR/USD against USD/CAD. Sure, you will find out the rest. What if you multiply the 3 currencies ? Cheers
I was off as well a long time, started last year again. I still work in a job, which I like. Scalping is psychologically so intense, I am not able to do that. Well, maybe I never tried it with full motivation.
you so sure about that aud.jpy? I guess different strokes for different folks. That's what makes a market. I'm getting killed on this short usd, because there is nothing decent to short it against. That's what happens when you depart from spreading and go outright. I could have made a killing if I was right, but I was wrong and got killed. So yes, I like being long something and being short something else, you can always fix it in the mix. They won't write books about you, but you can pay a few bills.
Since i do not trade forex anymore. Well, but I still use currencies an indicator for equities. What I did, trading aud/jpy + eur/usd vs. usd/cad Example: Buying 10000 units aud/jpy + 10000 units eur/usd + 22500 units usd/cad. 22500 because the pip size for Aud/jpy is 12.6 and usd/cad at that time was about 1.1. Interest was canceled out in that trade recently ! If you multiply the 3 currencies as an indicator, long term below 100 is dirt dirt cheap. That was 2009 during the crash! Otherwise nice to know US DollarIndex is almost the inverse to Eur/Usd (1/USD Index)*100 equals rougly Eur/Usd, since it is roughly 60% of the index. Idea could be to trade USDollar Index futures or whatever, maybe an ETF vs. Euro/Usd. Try it in an paper account if you dont trust the whole idea. Good Trading!
Also nice to know usd/cad is inversly correlated to equites. Ergo: Aud/Jpy + Eur/Usd higly correlates with Equities. Aud/Jpy is tracked as risk On/Off indicator for equities since it is one of the carry trade currencies. The Nikkei also higly correlates with Aud/Jpy. Japan is a huge importer of commodities from australia and oil from canada and the us. Oil price below present Aud/jpy price is dirt cheap for me as well. No Liability assumed ! Freestockcharts.com is always good for quick overview.
yeah, that's not very different from what I do. Now you are making me worried, because you don't sound very profitable or experienced.