The Reversal?

It has been a long wait this time. But, finally it looks like a little reversal in our favour is happening right now.

Note that whether the equity on the left column is up or down this 9.1k account is now earning at the level of $17,503. At 9.5% margin that is about $1662 times 400 (400 to 1 leverage) or $665,114 USD that we are controlling and getting DAILY interest on.

PLUS, there is the buy low and sell high profit taking that goes on while the market is swinging up and down.

This may not be a bad time to go live. That is is not advice. Just a thought!

When the Hedge is Against You

When you hedge currency pairs you will always be in an upswing or a downswing at any given time. Sometimes the upswings or downswings are shortlived. Sometimes they go on for a long time. The present downswing is the longest I have seen in two years of hedging the market using the FreedomRocks system.

Some people ask me if this is normal. All I can say is there is nothing really 'normal' about the FX markets. They go up and down in predictable and unpredictable ways. If we always knew the direction markets would take we might as well directional trade as we would always know the direction of the market.

In hedging it is the hedge being against us or for us that gives us those great equity swings. If we want to get the windfalls, we have to suffer the drawdowns. It is just the nature of the beast.

Now that we are in a drawdown period I would keep a close watch on things. At some point it will turn around. That is the time to be in with live money as you will gain considerably on the upswing which will help to insulate you well for the next downswing and all the while you will be buying low and selling high and earning daily interest.

Monster Pips- Inverse Hedge Training

Here is a site that discusses how to maximize profits by using good entry and exit timing.

Monster Pips- Inverse Hedge Training
https://paydotcom.com/r/18388/forexcoach/2198550/

I will add this link to the blog link list.

What Goes UP....Comes Down

Well, this has been an interesting time.

The USD has been seeing all time lows against all the major currencies and the big banks in the US are writing off BILLIONS and this is only the tip of the iceberg. The worst in the US economy is yet to come. Everyone knows that the fundamentals of the US economy are in extremely bad shape.

So, what is happening?

Gold is up, the EURO is up. The CHF is up. The USD is down, down down....how far no one knows.

How does this affect this kind of hedging?

Well, as long as the hedge sticks we should fare the storm on lower margin settings. But, if you look at the EURCHF 4 hr chart you will see that it is tanking. That means it takes LESS Swiss Francs to buy a EURO. The CHF is getting stronger in other words. Why? Investors often flee to the Swissy in unstable times. And, boy, are these ever unstable times!

This does have an effect on our equity swings in this system. But, as long as it goes down gradually and is offset by interest and sell high earnings we should not see too much damage.

The system is designed for the long term and is not a daytrading system. As long as the interest and sell high profits accumulate it makes it easier to go up than down.

You can see that recent events have affected the equity fluctuation to the negative on the left.

It cannot always go up. Must take the good with the bad.

Equity will go up and it will go down all while we are getting daily interest and buying low and sell high.

I guess the markets will do what they do.

Let's see how the USD fares next week.

Navigating a Crashing Dollar

After being through 2 Shanghai Crashes and about 6 Sub-Prime crashes this past year I am still amazed at how the hedging of the FOREX market has held up in the chaos.

Some traders I know were in and out of the market due to overmargined accounts and trying to tweak a system that works. They lost money.

But, when you just set the hedge up with a conservative margin with the intent to stay in for the long term the results can be much better because you are moving forward without the losses due to jumping in and out of the market.

See the latest results of the live demo on the left.

My real money accounts are doing as well or better than this demo.

Every demo and every live account I or my trainees have done since early 2006 are either well in profit or breakeven at this writing.

Hedging is a beautiful thing. With good money management the sky is the limit using such a strategy.

Though the USD is steadily declining in value and buying power it is good to have something to partially compensate.

FOREX RISK DISCLOSURE: It should be understood that Currency trading involves high risk. There is always a relationship between high reward and high risk. Any type of trade speculation that can yield an unusually high return on investment is subject to unusually high risk. Only surplus funds should be placed at risk and anyone who does not have such funds should not participate in trading foreign currencies. Currency trading is not suitable for everyone. We assume no responsibility for errors, inaccuracies or omissions in any material provided. We do not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. We shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation, losses, lost revenues, or lost profits that may result from any material provided.