Today euro shows high liquidity because bid ask spread is just 1. Parity condition and relatively expensive call option (only 52% chance it will appreciate above 1.0600 though, with strike price at 1.0600) indicates that euro is likely to appreciate. So I Set a limit Long at 1.6210 Even if it depreciates I am still ready to take some profit through hedging Else I will take profit through spread trading (target is 1.0660) The parity condition expects that in The long run that euro will appreciate from the current price level anyway. Also we still have time before the French election Ps. The market hit my limit long and a little bit more down level, I have set up hedging.
No I only trade on spot but when you have a good knoweldge of market system you can create whatever you want I have developed hedging and spread trading which will maximise my profit and minimise my loss. Now even if market goes the opposite way, my broker pays that expense, not me anymore ...
Euro doesn't look good today. Volatility has fallen, suggesting that price will go through some congestion for a while. May not trade today I would consider a buy iff euro depreciates below 1.06330 The current price is too high given forward rate. There is only 48% (below 50%) of chance that euro will appreciate to the next strike price of 1.06750 level
I been short U.S. Dollar since last year. On the weeklies have lower pivot highs and lows, my low term target before I can go long is below 80, so any good sized rally, all I be doing in adding to my shorts/hedged. In Euro currency, been long since last year, on deep retracements add to my longs/hedged. Still at good area to exchange U.S. Dollar hard currency into Euro hard currency in separate brokers account then you can trade Eurex without more exchanges. It is sort of your own ETF.
Could you please explain more what are the benefits of this method? Do you mean using brokers which offer contracts with delivery?
Following Doggy's question, I also wonder the benefit of this method because unless you earn interest, I think it's not easy to make huge profit unless you have banked a huge amount of money in your account...
Given that euro is at their intrinsic value and also there is the French election on Sunday, I expect euro to depreciate substantially either today or tomorrow. One thing for sure is euro will not appreciate much more at the current price level again because its at its intrinsic level and there is uncertainty with French politics. Take this lottery ticket and let's make some money together
You rode the 2 x retracements thru Feb & March? Target of below 80 is 2014 prices. Amazing long term trader, one must have strong nerves living thru those pullbacks
I been doing this awhile, at first I would travel to countries, open a bank account elsewhere, and exchange USD to let's say old German Mark(before Euro), when USD was high, you better off using monthly charts, in a number of years in which I have developed 9 year zones, until spot prices enter these zones I stay long currencies. SO when USD be bottoming, money would come out and back into USD. I have done well of just waiting it out, as markets have evolved, don't have to leave home like in the 80s, and send broker email saying how much to exchange from cash of one currency to another and if that country has tradable exchanges like Eurex, money stays in that currency plus can trade their markets. It is not trying to skirt around paying taxes as have used both taxable and retirement funds, paying what I need to have to. Have never taken any losses as I just wait it out, it is like long term reversion to the mean. And in my U.S. accounts will trade long term Forex and currency futures, so like a double servings, but I can then wrap options around positions on credit spreads or times of hedging open profits waiting for retracements. You learn much about some indicators like Bollinger Bands other than what they were devised to do, same like RSI, MACD and even moving averages as some younger traders believe that old indicators are like for dinosaurs, I am an old dinosaur, don't need new-study old and you have to use your noodle and think outside the box. It is like studying the bands themselves. Opportunities to add. I been trading my method since late 1992 and have become knowledgeable on hedging as that only way to contain risk, which I might add blossomed into how I trade stocks. Most years on futures side seldom outside of 5-15% of profitable future trades, so you have to do expensive options to CYA, but when prices hold, long way to other side and always trying to add on when medium/long term trends change for most traders. Most folks don't know when Buffet trades, he makes well on more of the options than the stocks. Options are not only for hedging, but to help cover losses of open profits, can be a cheap way of insurance. You can see on monthly chart of Euro of triple lows. I don't know of any trader who trades as I do for length, so being "solo", have better change of it working as I never been good at following the crowd. I do have a "target" to take profit on 10% of a signal-use to be 50%, most currencies is $10k which helps with losses associated with hedging. But the method at some point, don't really think of it much, automated and 24 hour markets, less worry than before, have much less risk now than any other time in my life. When you can control good portion of your risk, you control most of your future. You eventually find out that years turns into decades, tech changes for the better as in 70s my PC was pencil and graph paper. The idea came to me in the 80s, I had found Robert Weist who eventually authored book "You Can't Lose Trading Commodities", http://www.zoominfo.com/p/Robert-Wiest/1567267916, but I saw his method having risk too high for me to sleep at night, so speaking to other traders in early 90s on longer term trading of commodities, method has evolved for me. I don't have to make decisions of when or where as like any system, you keep working to make it better, have the answers before the questions. Someone else version http://www.textbookx.com/book/Understanding-Hedged-Scale-Trading/9780071345569/