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| 10.4 A Complete System https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=1481 |
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| Author: | Jemook [ Mon Jul 01, 2013 6:02 am ] |
| Post subject: | Re: 10.4 A Complete System |
Bob having a higher leverage does not mean you pay more swaps. Swap cost is based on the contract size so you would pay / gain the same swap cost for holding a 1 lot position @ 1:400 leverage as holding a 1 lot position @ 1:1 leverage. Kwanaann is correct. Cheers, J |
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| Author: | sponn [ Mon Jul 01, 2013 6:46 am ] |
| Post subject: | Re: 10.4 A Complete System |
I have learned something when I have killed my second live account - Never ever trade jpy's against usd/jpy (it is over 240 line so no more shorts on /jpy pairs). |
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| Author: | pips400 [ Mon Jul 01, 2013 7:19 am ] |
| Post subject: | Re: 10.4 A Complete System |
GBPJPY tough call. CSS on 4H giving definate long bias, but on the other hand, there is a lot of resistance to break just above including multiple price levels, MA and trendline, so even if price goes north I wouldn't expect a comfortable ride. Staying of this one. |
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| Author: | TraderDesk [ Mon Jul 01, 2013 7:50 am ] |
| Post subject: | Re: 10.4 A Complete System |
One way of trading this is to wait for a pullback on the hourly chart. If price is still above the 240ma when the low of the pullback occurs then I would jump on board with buy stops for a better R/R.... |
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| Author: | pips400 [ Mon Jul 01, 2013 8:41 am ] |
| Post subject: | Re: 10.4 A Complete System |
Good point, sounds like a plan. Looking at GJ it certainly wants to go long.  |
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| Author: | pips400 [ Mon Jul 01, 2013 8:53 am ] |
| Post subject: | Re: 10.4 A Complete System |
Hi Bob, hope the holiday's going well, I heard there's a heatwave in the US. Seems like you couldn't quite switch the laptop off  Really appreciate your time on this. I do have a couple of questions though.1. I didn't quite understand your second point, perhaps you could expand a little 2. On the logistics of actually placing the trades, do you use any of the scripts? 3. When you have the setup on 4H and 1H and place your pendings, I presume this means your placing all of the orders at once? In which case once the first order reaches the next line, the next order is fired and so on and so on. Then kill all the trades/pendings once price is stalling etc? Thanks again Pips400 |
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| Author: | nanningbob [ Mon Jul 01, 2013 10:22 am ] |
| Post subject: | Re: 10.4 A Complete System |
Jeepers, I cant believe people dont understand or comprehend this. 1. It has nothing to do with the lot size. 2. It has nothing to do with the interest rate. 3. It has nothing to do with swap cost. So throw all those points in the garbage it has nothing to do with what I said or what I point out. Leverage has everything to do with how much money you are borrowing from the broker to make a trade. When you place a trade with a 10,000 lot size you are not putting up all that money. You only put up a percentage of your account. The broker/bank puts up the rest. That is called leverage. If you trade 400:1 you put up 1 dollar the broker puts up 400. The difference is 399 dollars. You pay interest on that 399 which is called swap costs. It is the cost of borrowing the money from the broker. Sometimes the interest rate between the 2 currencies make a positive on the borrowing cost so that is a positive in your favor. Most of the time however, it is a negative. So you pay interest on the difference of the interest costs of the two pairs. . So here is the simple question and if you cant understand this I am done with this issue. If you borrow money at 400 to 1, in other words 1 dollar is your money and 399 is the brokers money. 400:1 leverage OR you borrow money at 50:1, in other words 49 dollars comes from the broker and 1 dollar is yours. The swap rate (interest rate) is the same for both and the lot size is the same for both. HOWEVER, the amount of money you pay in interest to borrow 399 dollars is more than the amount of money you pay on 49 dollars. You are borrowing more money so pay more money on swaps. Lot size the same, swap rate the same, amount of money borrowed from the broker is different. Now small amounts of money or lot sizes may seem like the swap rate is the same but once you get into the big lot sizes the amounts can be significant. If you have a 100,000 dollar lot and 10:1 trading ratio 90,000 is the brokers and you pay interest or swap on that amount. The 10,000 is your money so you dont pay interest or swap on your money. If you trade 100:1 then 99,000 is the brokers and 1000 is your money. The difference is you are paying interest on 9000 more dollars than the other guy. This is called leverage. Now when you trade 1000 or 10,000 lots the amount in short periods of time may seem the same but over longer term you will have higher costs in swap because the amount of money your are borrowing to make trades adds up. If you dont understand the difference after this then I give up. For the broker higher leverage is bonus money for him because he can liquidate your account at anytime so his part of the loan is never in danger of losing money. The more money they put in the more they make because they are covered by your money you put up. I suspect that many of these guys who report that they got their accounts wiped out and I am sitting on less than 10-20% DD is they are using high leverage and their margin calls come in. They wonder how Bob survives and they get their clocks cleaned. The issue is leverage. Not only did the broker/bank get all their money but got a higher rate of return dollar per dollar on the interest (swap) they earned. This is because you risk your accounts with higher leverage than if you use lower leverage. The broker also collects more in costs due to leverage. Anyway, some of you will understand this, some of you wont. |
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| Author: | fxarun [ Mon Jul 01, 2013 11:28 am ] |
| Post subject: | Re: 10.4 A Complete System |
Hi Bob, All the positions in the spot forex market have to be expired at 5pm EST everyday. The clearing house will roll over the open positions automatically at 5pm EST everyday. It means the open positions will be exchanged (swapped) for the new positions. Again, the new positions will expire the following settlement date at 5pm EST rollover. This process is also known as “tomorrow, next day” or simply “tom next”. When you buy EURUSD, it means you pay USD to buy Euro. In fact, it is not you who pays USD and buys Euro. It is the liquidity provider (the bank) that does it for you and on behalf of you. They pay USD and receive Euro. When you hold your position overnight and the time reaches the roll over time which is 5pm EST, the liquidity provider has to do the rollover process and the two currencies that are exchanged during the rollover, are not generally valued at the same price. The difference in the value of the two currencies is based on the difference of the overnight bank interest rates between the two currencies. When you buy Euro against USD while Euro has a higher overnight interest rate than USD, it means the bank gives a lower interest rate currency (USD) and holds the one that has a higher overnight interest rate (Euro). Therefore, they make some money through the higher interest rate of the currency they hold and that is why they pay you some small credit to your account at 5pm EST. Conversely, if they hold a currency that has a lower overnight interest rate and give the currency that has a higher overnight interest rate, they lose some money on the interest difference and therefore, you have to pay some small money as the swap. After the rollover at 5pm EST, you may also notice a small difference in the price of your original position and the new position assigned during the rollover. Swap can change on a daily basis. Ultimately, with the real ECN/STP brokers , it is only the bank that calculates the swap, and the broker has no control on it. Some banks follow the formula and some of them have their own formula and rules to calculate the swap. Arun |
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| Author: | cmeade2 [ Mon Jul 01, 2013 11:42 am ] |
| Post subject: | Re: 10.4 A Complete System |
This is a bug that happens every now and then for me. Basically, the H4 RSI(2) indicator in the template goes totally haywire and is incorrect. Here is a recent example from the ChfJpy. The price has been going up steadily, but the RSI(2) has plunged down. I know this is not correct because I have other ways of plotting RSI(2). Any insights? cmeade2 |
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| Author: | zentauro67 [ Mon Jul 01, 2013 12:15 pm ] |
| Post subject: | Re: 10.4 A Complete System |
Last week I noticed the same thing a couple of times. I thought It was a kind of superdivergence... but could be a bug.Now, this is my EURGBP 4H reading. Price going up, RSI2 going down... Divergence or bug? |
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