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Freedom Rocks: Forex Hedging

Mike QC · 292 · 58276

sam_1_els

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Reply #15 on: Nov 29, 2006, 07:32 AM
lehboy, na-try mo na ba yang forexforsmarties? same concept nga ng FR. I tried it last night, pero instead na I earned interest na charge pa ako when I check my account this morning:confused:.

Mike, tapos na yata yung free trial ng FR, di na ako maka-log on since last night.


Markso

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Reply #16 on: Nov 29, 2006, 05:59 PM
Hi guys,

The Forexforsmarties calculator seems to have the wrong formulas. (I think the interest rates they have are out of date). It is very similar to Freedom Rocks I would even go so far as think that it might be a member who ventured out on his own hehe.

Markso


Mike QC

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Reply #17 on: Nov 29, 2006, 06:23 PM
Ok no problem I already advised them that our account has expired. Let's just wait for their office in Las Vegas to open.  There should be no problem as my friend, who is close to the owner, requested an extention for our trial account.    


lehboy

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Reply #18 on: Nov 30, 2006, 02:05 AM
Trying out the forexforsmarties, pero medyo di ko pa magets. Kailangan yata masubukan ko rin muna yung Freedom Rocks.


Mike QC

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Reply #19 on: Nov 30, 2006, 10:22 AM
Lehboy, I'll give you access to Freedom Rocks, all you need to do is clear your inbox.

And for the rest,  you can now access our FR "Free Trial" account as we are given the extention as expected.   ;)


Markso

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Reply #20 on: Dec 01, 2006, 01:12 AM
Guys,

Forexforsmarties uses FX Solutions Interest rates for it's calculations. You must set the leverage to 1:50 to get interest payments. 1:100 up to 1:400 will yield an interest debit. That's why the calculator spews out negative interest projections. A 1:50 leverage setting means that to trade a 1k lot you'll need US$20, a 10K lot you'll need US$200. Please take special note of this.

FYI.
Markso


lehboy

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Reply #21 on: Dec 01, 2006, 01:20 AM
Hi Mike, already cleared my inbox a few days ago  ;)


sam_1_els

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Reply #22 on: Dec 01, 2006, 05:23 AM
Some few questions need to ask you guys.

@Markso, what settings do you think will yield more interest if for example, I only have $2000 on my account balance?

Is it 400:1 leverage, then .1k or 1k and 10 Margin percentage?

This next question is for anyone (probably dumb, but i'll ask anyway)..... just so to make sure I'm doing it right.
- The settings on FR should be the same with your broker's settings, right?
- What is the logic behind the 'pending limits'? How do we earn from it? Kasi di ba, if a pending position had executed, we should close that position and recalculate the next buy/sell limits again for that executed pair?
   So, if that executed pair is still in negative, should we close it na or wait for it to be in  profit first?

My performance update:
Today is my 3rd trading day using FR. With $50000 starting capital (virtual money). I gained $6796 on my first initial purchase, the total gain amount are not all from interest earned, only $18 are from interest, since I traded it for a day only,and the rest is from currency price differential.

The reason I closed my 1st 'initial purchase' is because I've already reach 10% of the amount I put in to trade (used margin).

I'm now on my 2nd 'initial purchase'. I traded 3 currency pairs in this round.
At this moment, my account balance is $ 56,796 and equity $54,702.

Not bad for a start, but we'll have to see what will happen next.....   
« Last Edit: Dec 01, 2006, 10:38 AM by sam_1_els »


Mike QC

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Reply #23 on: Dec 03, 2006, 02:14 PM
Sorry I was outta town and just arrived today.  Ok, I'll try to answer some of your questions....yung alam ko lang for now ha.  
Quote from: sam_1_els
what settings do you think will yield more interest if for example, I only have $2000 on my account balance?  Is it 400:1 leverage, then .1k or 1k and 10 Margin percentage?

That should be very safe, yes we try to use 15% margin but we are not  going after the interest.
Quote from: sam_1_els
The settings on FR should be the same with your broker's settings, right?

Yes the settings on FR and your broker should be the same.
Quote from: sam_1_els
What is the logic behind the 'pending limits'? How do we earn from it? Kasi di ba, if a pending position had executed, we should close that position and recalculate the next buy/sell limits again for that executed pair?   So, if that executed pair is still in negative, should we close it na or wait for it to be in  profit first?

What we have noticed is if you trade with the pairs with the closest relationship, the EUR/USD and USD/CHF they are closely matched and swing back and forth between not in profit and being in profit. When we are a few percent in profit we close all positions.

This Freedom Rocks thing is indeed AWESOME!!!  

Believe it or not, my friend's wife, who has NO previous trading experience, and who previously just opened and played around in a demo account and then finally went live on the 9th of November was up just a little over 16% only for 3 weeks.  And he has a guy who opened a live account with only $250 and he now has just under $700 - that in only 6 weeks.  This trading strategy is yielding consistent double-digit returns every month for them and it takes about 1/2 hour per week to manage - people who are critical of it like me, are obviously newbies and have stars in our eyes haha.

I guess I will be trading live na din as soon as when I am really really confident enough. ;)





« Last Edit: Dec 03, 2006, 02:16 PM by Mike QC »


sam_1_els

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Reply #24 on: Dec 04, 2006, 08:03 AM



What we have noticed is if you trade with the pairs with the closest relationship, the EUR/USD and USD/CHF they are closely matched and swing back and forth between not in profit and being in profit. When we are a few percent in profit we close all positions.


Thanks for your 1st two answers Mike.

On your 3rd answer. I think Mike, you are referring to the profits that we can get dun sa "initial purchase" positions (which is yung 2 positions na may malalaking lot size).

What my concern is yung "executed" pending buy/sell limits positions (yung mga 1 lot per position), What should we do with it? Close it/them ASAP gain or loss then recalculate the next pending buy/sell limits?

'coz this is what happen last friday:
-I have 2 positions (the 2 initial purchased) opened, right?
-Then the usd/chf pending buy limit has has executed....
(when a position is executed we are charged with a spread, right? so the usd/chf is still a floating negative)
-A few minutes later, eur/usd pending sell limit has also executed.
-I had 4 opened position then.... (2 initial purcahsed and the 2 executed limits)
-then the usd/chf turns into positive pips ($33 gain). so I closed it and recalculate the next entry price.
-When I get back to the eur/usd pair, it is still $50 negative, so I waited til it goes below atleast -32$ before I close it.
-But up until this monday morning, the eur/usd negative went up to -180$.
-What should I do with that position then? hold it? 

At this moment, I do have 3 opened positions with $140 floating profit. If those pending limits didn't executed, I could have bigger floating right now. Kaya di ko ma-gets bat kailangan pa yung mga pending buy/sell limits.


  



Markso

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Reply #25 on: Dec 04, 2006, 01:55 PM

Some few questions need to ask you guys.

@Markso, what settings do you think will yield more interest if for example, I only have $2000 on my account balance?

Is it 400:1 leverage, then .1k or 1k and 10 Margin percentage?

[Markso] Hi Sam_1_Else, Interest payout calculations are different from Broker to broker, some brokers like FX Solutions will say that even at 400:1 they will provide you with interest payouts if you are long the right currency. This is quite generous however if you switch it to 200:1 all the way to 50:1, the interest payout will increase as well, so for FX Sloutions it really depends on your leverage or what we call "Gearing". As of late However, if you apply the Freedom rocks strategy using FX Solutions, where you have 2 pairs, their calculation of the net interest will still yield a negative result simply because FX Solutions calculations are affected by the depreciation and appreciation of the currencies. So even if you set the leverage to 1:50 this will still yield a negative interest payout (please take note of my previous statement, apparently when I tested those settings, it came out with a negative interest the reason is because of what I just stated here). I've been trying however this strategy with FXCM as well. For FXCM, their ruling is simply you must set your leverage to 1:50 and you will automatically be provided interest during rollover. FXCM's Calculations compared to most other brokers are more simple in the sense that interest payouts are fixed. i.e. if you are long the USD/CHF, your interest payout per day is about $9.70 (for a regular100,0000 lot ) and if you are long EUR/USD interest debit is -$7.20 (for a regular 100,000 lot) the only requirement FXCM has is that you set your leverage to 1:50. When it comes to Margin settings, based on FR, this is basically how much of your balance you are willing to risk. If you have a balance of 2,000 and you set it to say 1:50, then each 10K lot will cost you $200, so if you are trading 60,000 or 6 lots (10K ) then your collateral amount held by the broker will be 6 x 200 or 1,200. This will leave you a free balance of 800 (2,000 total balance - 1,200 colateral deposit= 800 free balance) that 800 free balance will have to cover any floating losses that you may have. Based on my findings to date however I would prefer to have at least 1000 free balance to cover any possible negative floats.

This next question is for anyone (probably dumb, but i'll ask anyway)..... just so to make sure I'm doing it right.
- The settings on FR should be the same with your broker's settings, right?

[Mark So] Yes correct.

- What is the logic behind the 'pending limits'? How do we earn from it? Kasi di ba, if a pending position had executed, we should close that position and recalculate the next buy/sell limits again for that executed pair?
   So, if that executed pair is still in negative, should we close it na or wait for it to be in  profit first?

[Markso] Pending limits allow you to compensate from floating losses a lot faster than just waiting for the net balance to become positive. It's basically allowing you to range trade based on fr's support and resistance calculations. If you don't buy or sell (limit orders) then you may do so and just getting profits from interest payments, however this may take a longer time and produce a little less than if you range trade.

My performance update:
Today is my 3rd trading day using FR. With $50000 starting capital (virtual money). I gained $6796 on my first initial purchase, the total gain amount are not all from interest earned, only $18 are from interest, since I traded it for a day only,and the rest is from currency price differential.

[Markso] I'm curious on how you came up with a 4 digit profit, did you buy both EUR/USD and USD/CHF at the same time? and how many lots of each did you buy?

The reason I closed my 1st 'initial purchase' is because I've already reach 10% of the amount I put in to trade (used margin).

I'm now on my 2nd 'initial purchase'. I traded 3 currency pairs in this round.
At this moment, my account balance is $ 56,796 and equity $54,702.

Not bad for a start, but we'll have to see what will happen next.....  



Mike QC

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Reply #26 on: Dec 04, 2006, 03:28 PM
Thanks a lot Markso for guiding us.  

Quote from: sam_1_els
-What should I do with that position then? hold it?
At this moment, I do have 3 opened positions with $140 floating profit. If those pending limits didn't executed, I could have bigger floating right now. Kaya di ko ma-gets bat kailangan pa yung mga pending buy/sell limits.

but what does the training "section 10" say to do?   I hope this wil also help.

* Taken from FR "Forex Training"...

10. Closing your positions
You are free to close your positions at any time.  You might consider closing them to lock in profits if some abnormally high windfall occurs.  Keep in mind, though, that you will be paying the spread again when you re-open new positions, so you shouldn't open and close positions unnecessarily.  To close them:

    * Double-click the open order on the "Trade" tab
    * Click the yellow button that begins with "Close #..."
    * Make sure you repeat this for all your open positions.  Do not close one without closing the others, or you will dramatically increase your exposure to the market.
    * Double-click each remaining pending order and click the yellow "Delete" button.


sam_1_els

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Reply #27 on: Dec 04, 2006, 06:10 PM
@ Master Markso, thanks for the explanation. Now I understand the logic of buy/sell limit pending. but, still having a hard time digesting the leverage, lot, margin settings. :hihi:

Here's what I did to come up with 4 figures profit.
Yes, I bought Euro and Swissy at the same time.
On my 1st round (or 1st initial purchase), with virtual $50,000 capital, I bought Euro with 9.7 lots and 23.8 lots for Swissy. When my floating gained around 4,000 plus; I closed both positions.

I did some gbp/jpy & chf/jpy hedging myself during the time when the FR account expired. unfortunately, loss some few hundreds. Then when Mike QC gave us the access to the software again....

I entered for the 2nd round, bought 20 lots Euro and 27 lots Swissy, with also 1% if I remember it right. Then closed both positions when my profit reached around $2000 plus.

That's how I got the figures. Now I'm on my 3rd round, this time experimenting with 3 currency pairs. Bought 6 lots on Euro, 4 lots Cable and 15 lots Swissy. I'm with $2808 floating profits at this moment. Planning to close it when it reach 3K.

@ Mike, the section 10 still didn't answer my question. I think the section 10 is telling us that we should close all positions at the same time if we are intend to close those initial purchased positions (plus those executed limits if there is).

My question is in section 9, here I quote it:

   9. Adjusting/Adding limit orders when they execute (on-going)
This is the step you'll be repeating over and over again until you close out your positions.

You've set your limit orders, and eventually, one of your price points will be hit.  Our goal here, is to find out what our new buy and sell points are and get them set as we did in step 8.  First of all, how will we know one of our orders executed?  Simple, we started with 4 limit orders (2 buys and 2 sells).  If we see in the only 3 orders remaining, 1 was executed.  Here's the procedure:

Verify the exact rate at which you either bought or sold your lots.  Orders are normally executed at the rates you set in your limit orders, but in times of extreme volatility, you might have actually sold your lot(s) at a higher rate (which is good for us) or bought them at a lower rate (which is also good for us).  The rate you're looking for is in the "Price" column of the "Trade" tab.
Access the Command Center
Open the Portfolio Manager, select the appropriate porfolio from the list, and click "Select"
Select the currency pair which was bought/sold, and click "Add Transaction"
The "Transaction type:" will be either "XXX/XXX - Lots Sold" or "XXX/XXX - Lots Purchased" (where XXX/XXX is the currency pair) depending upon which it was.  Enter the rate at which the transaction was recorded
When we click "Add Transaction", the portfolio screen is redisplayed, our new transaction has been added, and FreedomRocks has calculated a new "Lots To Trade", a new "Buy Rate", and a new "Sell Rate" on the yellow line.  Write them down.  It's now time to reflect these changes in the trading software.
To update the trading software:

If your sell order was executed there's an additional step:
Find the line in your open trades that has a "Type" of "sell"
Double-click it to bring up the order page
In the "Type" pulldown, select "Close by"
In the window that's displayed, select the line item with the lowest price
Click the yellow button which starts with "Close #..."
Replace the buy or sell limit order which executed just as you did in step 7
Adjust the rate on the limit order which didn't execute
Double-click on order which didn't execute to bring up the order screen
Change the "Price" to reflect the new value from the Portfolio Manager
Click "Modify"
Double-check your work:

Verify the Portfolio Manager indicates you own the same number of lots the trading software does.  If they don't, you've made a mistake.
Verify you have 2 limit orders set in the trading software for each currency pair you're trading (1 buy limit and 1 sell limit)
Verify the rate for each limit order matches the rate in the Portfolio Manager
You're now ready to wait again for one of your price points to hit.


Section 9 tells us to recalculate if there is/are pending position got executed. Then go to the trading platform and close that/those positions that executed, (didn't said must also close the 2 initial purchased position, but we could if we want to).

My question is when will we close the executed position/s, should we close it even when it is still in negative?

Hmmm.... on the flip side. Right now, I can see that even the executed limits are in negatives, the over all floating profit is still positive. Should have no problem then.

Well, I just wanna make sure tama yung paggamit ko nung software. ;)  




Ferdsvg

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Reply #28 on: Dec 04, 2006, 08:49 PM
Mike medyo full na inbox mo.he he. Hope FR offers a steady alternative and fall back to traditional forex trading. Looking forward to know more about the system!


Mike QC

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Reply #29 on: Dec 04, 2006, 08:52 PM
Ok sam, very well & good your question is finally answered by Markso and of course it benefits me as well.  Talagang newbie pa talaga ako sa forex hehe.  I feel really blessed having Markso helping and guiding us all the way.  Anyway, we're getting there bro. Sige practice pa tayo and keep the results/updates coming.  I'll keep requesting for a special extention of our demo account.  ;)


 


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