Hedge trading spieler system derived fro from futures spread trading

EAcpu | 5 reads | 0 comments | 2026-05-03

I started replying to post http://www.forexfactory.com/showthread.php?t=85097 ans and was asked to start a new one because it was confusing.

I have been trading spreads for many years.
First it was my personal account, then it was the hedge fund manager.

I'm doing a futures spread trade, but not in the usual way.
I'm arbitraging between related Eurostoxx futures and French Fce (cac4 futures).
We were a team and made huge profits, so decided to start a BVI hedge fund.
The combination of reduced volatility and automated bank settlement has led us to change arbitrage support.
We built a model that spread Eurostoxx with S&P futures and got great returns.
This problem is compounded by the different opening times for exchange rates and trading volumes.

But a big advantage is that no robot can arbitrate it.

When I started tradinf FX my main idea was to do the same thing because one of the great advantages of spread betting is that you feel more comfortable with your positions and bet less on the direction and more on the difference.

There are different ways to do this on FX, I will explain the simplest way, which was profitable (I used it for a year and got good returns) and now I am fine-tuning it with the same philosophy, the same pairings but using a proprietary formula.

I still trade professionally as a Forex asset manager. Have a 7-digit account.

1) I only trade EUR/USD and USD/CHF for two reasons.
First of all, it is the currency pair with the strongest long-term and short-term negative correlation in foreign exchange.
Secondly, even if you find a more relevant currency, the volatility will be too much for a spread bet like mine (immediately forget about GBP or JPY involved in a spread bet, that's a killer account).

2) Please don't tell me that spread trading on these currency pairs is the same as trading EUR/CHF directly, please don't write that, even though you can copy it from a so-called serious website. Those who say they have never followed three couples together day and night like I did.

3) Contrary to what I've read in this thread, the entry point is not that important. You don’t have to find the perfect entry call, but find an #acceptable one (I’ll explain this later).

4) Don’t tell me stop loss, there is no stop loss in this trading method

5) You need to capitalize because be prepared to average. Yes, I know you're not supposed to do this, so please don't tell me. I never lose money on average in direct trading, spread betting is very different. So don’t use 10k tio to open a 1 million position

6) Don't look at the price of EUR/USD and the price of USD/CHF three years ago and then tell your currency pair is not correlated with what you say it is because you have to re-realize the data multiple times a month.

Here's a very basic example:

View 3 charts for EUR/USD, USD/CHF and EUR/CHF: either 4 hourly or 1 hourly Kandel will work.

A logical entry point is when there is a divergence in EUR/CHF.

The longer you wait, the safer you are, but the fewer transactions you make.

(Only) In theory, since the correlation is so strong, the divergence should stop and return to neutral.

In order to solve the USD problem and maintain market neutrality (a very important point that is always put aside by 80% od spread traders), you have to buy 1 lot of EUR/USD for every 1.5 USD/CHF lots and achieve this ratio every time EUR/USD moves sharply to try to get close to a market neutral position.

So, let's say EUR/CHF is -0.20%, for example you are on alert because it is close to the entry point, I would recommend not to enter before the 0.25/0.30 divergence initially, but personally I start my position at the 0.20 divergence.
For example, when I opened a position yesterday, you would have waited for -0.25%.

I hold 1 position long on both (i.e. 1 EUR/USD and 1.5 USD/CHF):

Long 1 lot euro/usd at 1.5702
Long 1.5 lot usd/chf at 1.0260

Depending on the broker, you have to pay a spread, let's say your 2 buys have a spread of 7 pips.
You will initially lose 7 pips (eg 3 pips for EUR/USD and 4 pips for USD/CHF). You have to wait for the 0.05% move to cover the spread

Then you wait, and if the divergence reaches -0.45, you open another position (1 and 1.5), and if it reaches -0.65, you open another position (you can wait longer if you have a small account or want to be more conservative).
If the difference is more than 0.65%, you need to wait until 1% (almost never happens).
This means that you can handle this divergence without getting margin called, so don't start with a leverage of 200.

Usually it goes rarely over 0.40/0.45.

Yesterday, after -0.25% in my memory, it is now only -0.32%.

A few hours later I closed my position at 1.0324 and 1.5652 (when the divergence returned to 0, I closed half of the position and the rest at +0.20). Then we moved up to +0.40% (of course, I am now short from +0.30 (+0.30 instead of 0.20/0.25 because I wait for the trend to weaken). That is, the 1/1.5 ratio is almost 60 pips.
Usually when averaging 2 or 3 times you will get small profits and some big profits.
You can make more (70 pips) by playing EUR/CHF, but if you are wrong, it is more difficult to maintain a directional position than a hedging position (from several vue perspectives and from a psychological point of view, this is the most important part of trading that all of you know.........not everyone knows this?

I closed this this morning (EUR/CHF -0.15%).

I'm now waiting for -0.30/-0.35 to come in again (we're -0.15%, but I know compared to a few days ago we're closer to +0.10, so I'll wait a little more (this is part of what I mean by implementation and fine-tuning)

One advantage of holding a long position is that you can get a swap on EUR/USD, and some brokers also pay USD/CHF + rollover fees.

Of course, in my opinion, this is the easiest way to make money on Forex.

So where are the risks?

They are to prevent huge ideas from happening in Switzerland or Europe (I'm not talking about the decision rate (for example, you can say I will never be in a position before the rate announcement), I'd rather have an explosion somewhere.
For me, these are not risks, but you can make a lot of money these days with spread betting, I will explain it one day if anyone is interested.