NZD/JPY Correlations - Page 2
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Thread: NZD/JPY Correlations

  1. #11
    Wow, I discovered this is the previous post in this thread (before mine today) and it was right before the huge planet sell-off (1600 pips in Gbp/Jpy). That blew holes in the systems of everyone here, since there are no more articles after that.

    Quote Originally Posted by ;
    GBPJPY moved 250 PIPS today. . .after the rate hike in BOE..Its typical range is over 150 and more frequently it croses the 200 Mark,

    Hope you guys caught the PIPs, too bad after a very long party on the weekend, I woke up late and went live in US seesion

    Expecting GBPJPY following the downward move, would jump up and cross 0.45 ish in the coming months.

  2. #12
    Hi there gxxr1130

    I have been trading with them Live for approximately 3 and a half year now and can confirm it works as follows:

    First offthey will pay you interest on any CASH amounts you've available in you account, i.e. money that isn't used as margin, only free money not being used. Just like bank would pay you a small interest on a deposit. Therefore, in case you've got no trades available, at least you get just a tiny bit every day for any cash you have. It is not a lot therefore why it is no great thinking you could earn a living off of it unless you've got millions if you might too go put it into a normal savings account, I think the payment there would be better.

    The second interest they have is your SWAP RATE they pay/deduct in your open trades. I've already uploaded a curiosity table for different currencies for everybody to see. Instead of paying rollover curiosity at 5pm like all other brokers perform, Oanda actually calculates how much interest you'd be getting each SECOND you've the commerce available, so if you're extended GBPJPY for one hour, when you close the transaction, they will cover you instantly the interest for this one hour and so on#8230;

    Their maximum leverage is 1:50 as far as I know, therefore why their interest payments are higher. The longer leverage one utilizes the less the interest you get, therefore why NF on a 1:100 or 1:400 pays less and less and lessthe same narrative with FXSol etc#8230;

    I learned of a broker on Friday that has ZERO disperse, yep ZERO spread, a small commission though, but minimal. They pay/charge swap at 5pm. So picture this, on Wednesday (3x swap date ) you start a long position on Oanda, and with this zero disperse men, you keep the transaction open only till before 5pm, and close all of it. You get all the interest from Oanda since they cover per second, and you pay no vested fascination together with the zero rate disperse guy as you shut the transaction before 5pm.

    Once again, having two connected pairs isn't all that is essential. In addition, we require the pairs to be connected on a volatility base. Of course the high spread pairs operate considerably harder each day, should they didn#8217;t the spreads would be reduced. Spreads are risk and volatility based. The first tell-tale. The volatility differential can be balanced to a certain extent through adjusted trade dimensions. In case of EURUSD and USDDKK you can go brief less DKK then USD thus raising the EURUSD brief and still end with a nice interest payment each day. This of course is assuming the volatility ratio between the 2 pairs remain connected.

    There are lots of ways to pick the transaction ratios. You can take USDDKK and split EURUSD to it and you will see should you do this for many days you can find an average of 4.669#8230;example (USDDKK / EURUSD) = 4.669 generally, it fluctuates between approximately 5.2 and 3.9 it seems#8230; I can not get to much historical data on USDDKK in MT4 to reliably state this#8230;

    Still another method is to simply look at the a ATR(14) of both pairs and split it into each other, example: ATR(14) of USDDKK / ATR(14) of EURUSD This would give you a rough volatility ration#8230;etc and so forth.

    Of course this is simply usable if we can safely assume that the volatility correlation will hold too and not only the directional correlation.

    Gxxr1130, it'd be interesting to observe how you conduct your math#8217;s. These brokers can not really go mess with the interest rates to substantially, in fact it is not actually within their power to make major alterations accept for the miniscule one#8217;s we see when we compare tables. The major differences are simply because of margin, you can not compare interest tables based on 1:50 with curiosity tables based on 1:400. Why notsimply as on a 1:400 you're lending more money on the brief currency and you deposit on the lengthy currency.

    Aside from that, should they do nevertheless opt to go all postal on their financing rates, let#8217;em. In this event they will cause a MAJOR arbitrage opportunity between the spot Foreign Exchange price they quote for example their daily interest rate and the most current futures contract on such currency pair that already includes the official country interest rate in it#8217;s price. Through the years any futures contract#8217;s price converges with the underlying cash price, due to the interest component that is running out. If these brokers believe they are so smarty pants and proceed wreck with their interest spreads, you simply point me to them and that I will pare them such as an orange!!!

    So in essence then, revealing any math#8217;s will should not have any impact, and if it does, well, as I have just explained, it will only be to our advantage.

    Best wishes,

    MECER

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