FPI - Fractional Product Inefficiency: The Impeccable Hedge
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michal.kreslik wrote:People are still asking me about the correct position size for FPI.
Let's make it perfectly clear now.
We decided to employ this FPI ring:
- SellShort EUR/USD
- Buy EUR/JPY
- SellShort USD/JPY
You see, we have hedged the colored currencies one unit for one. The JPY is not hedged precisely one for one (14,937,000 for 14,934,113), but it can't be closer.
Michal
exposure is still exposure no matter how small. what happens if there is a sudden movement, or the market drifts before you can exit the FPI ring?
however FPI takes advantage of market imbalances as does http://en.wikipedia.org/wiki/Triangle_arbitrage and (if i'm right) then when the FPI ring equals 1 you CAN offset all postions against themselves which would mean if you can get them to do that with positive interest result it would produce profit continually no matter what the market does.
- Gert Frobe
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David, thanks for the MT4 update.
trevman, i dont know if an EA can auto trade this. inless you you can have the EA trade on J hooks at the FPI. However i think that an EA could be built to set the trade (inter trade@ bid, bid, &ask) at almost the same time on the three trades via a one click trade box on the screen.
Michal, davidf and all who have put in added input into the FPI
thank you,
ben
trevman, i dont know if an EA can auto trade this. inless you you can have the EA trade on J hooks at the FPI. However i think that an EA could be built to set the trade (inter trade@ bid, bid, &ask) at almost the same time on the three trades via a one click trade box on the screen.
Michal, davidf and all who have put in added input into the FPI
thank you,
ben
- Gert Frobe
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- michal.kreslik
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Concerning the interest rates on the open Impeccable Hedge positions, I've just found Oanda pays/charges interest as you go - continuously:
http://fxtrade.oanda.com/fxtrade/intere ... tion.shtml
So they don't employ the common practice of settling up the interest at 5 pm ET sharp as most FX brokers do.
Michal
http://fxtrade.oanda.com/fxtrade/intere ... tion.shtml
So they don't employ the common practice of settling up the interest at 5 pm ET sharp as most FX brokers do.
Michal
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Quick FPI Trade Test
Seemed to have executed ok. It was all manual, but nearly not as tricky to execute as I thought. Order execution with MB is pretty good. Are the currency calculations ok? Has anyone else traded any real money? Please share your experience.
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