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Hi

Please Im looking for an expert assistance for my trading strategy.
Its a strategy that I read in Mrs James Dicks book.
its about going long in the four majors (eur/usd,usd/jpy,gpb/usd,usd/chf)
its was good until yesturday london hours it went against me and i lost
about 2300$.
my question is
if there is any filter or signal to enter in such a trade
or if there is some times that i shouldnt enter.

Thank you.

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Hi there, welcome to the JDFN members board.  How can I assist you?  Which Forex book did you read?  Can you be more specific?  Thanks!

Hello Rihab,

I am very sorry for your loss.

The basket of currencies is a hedging strategy, where pairs like EURUSD and USDCHF are inversely correlative and GBPUSD - USDJPY mildly inversely correlative.

The purpose of the strategy is to gather positive swap along the duration of the trades, and to close all positions as soon as the net profit/loss is positive on equity (which means some of the trades could be negative but the overall net position positive, including rollover).

It is also mentioned that the pip value on eur and gbpusd doesn't vary but it does on both the usd-based pairs as it will be slightly changing along with the rate. The actual values for the latter have changed and thus so must be the position sizing so all pairs are kept in balance.

The formula for the pip value is:
usdchf = 10/usdchf rate
usdjpy = 1000/usdjpy rate
but this may vary among brokers so you should check first on yours to get the exact numbers for a more accurate proportioning.


At the present moment these are the pip values and swap I get (on one standard lot):

eurusd   pip value = $10 ; swap long 2.88 pips
gbpusd  pip value = $10 ; swap long 0.00 pips

usdchf   pip value =$11.25 ; swap long -0.48 pips

usdjpy   pip value =$12.30 ; swap long -0.45 pips

 

Thus the proportioning should be adapted to those new values:

For 1 lot eurusd and 1 lot gbpusd,

0.85 (if you have micro-lots) or 0.8 for usdchf    swap value = -0.48 x 0.85 = -0.38
0.75 (if you have micro-lots) or 0.7 for usdjpy    swap value = -0.45 x 0,75 = -0.34

 

The net daily swap for the whole basket is equal to:

2.88 + 0.00 - (0.48x0.85) - (0.45x0.75) = 2.16 pips

 

These values are approximative and will depend on your broker exact rates.

 

You said that at a certain point the trade situation was "good", do you mean the whole was positive? As per the rules, all trades have to be closed when it is so.

 

The only alternative I see to further pinpoint a good entry is to check the trend for EURCHF and GBPJPY, and only use this strategy when both pairs are in an uptrend or with expectations of a rise. You can also use EURJPY and GBPCHF for the same reasons, but I have paired them above in regard to the greater correlative power, especially EURUSD and USDCHF.

 

EURUSD + USDCHF = EURCHF

GBPUSD + USDJPY = GBPJPY

as USD positions cancel each other.

 

Should you have further questions please let me know and I will try to be of assistance.

Regards

Caroline

 

THANK YOU CAROLINE
YOUR REPLY GIVES ME SOME ADVANTAGE
i think before entering in the market you should watch the stock exchange and see what`s is going up there well i think you have a big amount

2300! my god~

 too much money !

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