FPI - Fractional Product Inefficiency: The Impeccable Hedge

NeoTicker indicators

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ghamm
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Postby ghamm » Wed Feb 06, 2008 6:59 pm

Hi,
Im looking for the tighest ring, I.E.
EUR/USD
USD/CHF
EUR/CHF

It can be up to 4 pairs...

BUT...

I want to find a 2-4 pair ring that has a very similar Daily range/volitility..
for instance , the EURO moves faster than the CHF..

Is there a good hedge where the pairs move at similar speeds/ranges?
2-4 pair combos? This is for a short term strategy.. I dont care about swap for this one..


Any ideas?

Craig

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Tim JP
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Postby Tim JP » Wed Feb 06, 2008 8:39 pm

Isn't the FPI Hedge a bit self destructive?
You look for inefficiency to exploit it but using arbitrage you help making the market more efficient.
I'm looking forward to see how the fpi with real market spreads works out.

If you wonder who came up first with the concept.
It was Adam Smith almost 250 Years ago.

ghamm
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Postby ghamm » Thu Feb 07, 2008 4:32 am

Im not placing the 3 trades all at the same time but using the idea to control my Grid DD.
This is why Im looking for the combined pairs that have similar volitility..

obx
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Postby obx » Wed Feb 13, 2008 6:11 pm

ghamm,

try
EUR/USD
USD/JPY
EUR/JPY
etc

may be a better fit for what you are attempting.
EUR/JPY moves! EUR/USD does ok and USD/JPY is usually the slow dog in that group - but as a whole you will probably get better action than on the group using CHF

If you have time, please start a thread and describe what you are doing.
Thanks.

SimonJ
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Postby SimonJ » Fri Mar 07, 2008 4:42 pm

Hello, very interesting!

I've been trying to find any circle with a positive swap rate but I'm unable to find one. Is it possible? Anyone find any?

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michal.kreslik
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Postby michal.kreslik » Fri Mar 07, 2008 5:21 pm

SimonJ wrote:Hello, very interesting!

I've been trying to find any circle with a positive swap rate but I'm unable to find one. Is it possible? Anyone find any?


It would be too easy :)

There are no interest positive FPI rings. It's because of the spread between the borrowing rate and the lending rate.

I.e. you can't borrow the money from one bank and lend it back to another bank for a profit.

Michal

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michal.kreslik
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Postby michal.kreslik » Fri Mar 07, 2008 5:25 pm

Tim JP wrote:Isn't the FPI Hedge a bit self destructive?
You look for inefficiency to exploit it but using arbitrage you help making the market more efficient.


I'll take a liberty to reword your question a bit, thus providing you with an answer:

The FPI is making the market more efficient by looking for inefficiencies and exploiting them for a profit.


Michal

beijing
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Postby beijing » Tue Mar 11, 2008 2:03 am

Hello Michal, I notice the website shares your last name. I guess you are the starter of this forum right? So impressive, I have to say that I never even think that I can make some money by trading forex coz I know that roughly 85% of traders lose money. However, after dicovering this forum and forexfactory,which directed me to here. I am absolutely amazed by geniuses and gurus like you Michal. Hope I can learn something from you guys.

So by far, we have not really get the FPI autotrading right? And I think the brokers might not accept it coz I have a friend who works for a US FX broker, which might close your account if you use some stradety or software that the broker considers "abuse" trading.

Anyway, thank you for this wonderful thread through all the year.

From :smt001 Beijing

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Postby gustavodemelo » Tue Mar 11, 2008 1:12 pm

About positive swaps.

I'm using Meta Trade 4 plataform and I can read some informations for any pair (on-line) using the MarketInfo function, like spread, swap long and swap short.

I make a loop to combine any ring and accumulate the sum of swaps in a matrix, then, I know the best rings (ordered by sum of swaps) to determine the best rings to open.

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michal.kreslik
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Postby michal.kreslik » Tue Mar 11, 2008 10:07 pm

gustavodemelo wrote:About positive swaps.

I'm using Meta Trade 4 plataform and I can read some informations for any pair (on-line) using the MarketInfo function, like spread, swap long and swap short.

I make a loop to combine any ring and accumulate the sum of swaps in a matrix, then, I know the best rings (ordered by sum of swaps) to determine the best rings to open.


Definitely, there are FPI rings that are more interest rate-wise positive (less negative) than others. But there is no FPI ring that is generating overall positive interest.

Michal

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