This method plus the Hedge Calculator is all about trading the Forex Market the easy way, low risk, steady profits.
Forex or Foreign currency exchange is the largest financial market in the world, where the world's banks exchange trillions of dollars of currencies every day. Thanks to the Internet, everyone now has a chance to be a part of this huge market.
It is a little like the stock market, but much easier and more volatile - presenting fast profit opportunities. Many people "day-trade" it, diving in and out in minutes under great stress. Sometimes gaining, sometimes losing.
After years of research, trial & error, testing and re-design. The True North Group has come up with a way to take trading easy, gain steady profits, and earning overnight interest everyday. We came up with 3 type of strategies that are included in the file.
-The 2 pairs hedge which is very popular. Safe and steady.
-The 3 pairs hedge that is a little more aggressive than the 2 pairs hedge.
-And lastly, the 4 cross pairs hedge method which can help you earn maximum swap while balancely hedged (for long term trade).
Let's start with defining the word hedging and correlation:
Hedging is a strategy designed to minimize exposure to an unwanted financial risk, while still allowing the assets involved to profit from their investment activity.
Here where our hedge calculartor coming in. Since a trader can use different pip or point values for his or her advantage. Lets consider the EURUSD and USDCHF once again. They have a near-perfect negative correlation, but the value of a pip move in the EURUSD is $10 for a lot of 100,000 units while the value of a pip move in USDCHF is $8.34 for the same number of units. This implies traders can use USDCHF to hedge EURUSD exposure.
Here's how the hedge would work: Say a trader had a portfolio of one long EUR/USD lot of 100,000 units and one long USD/CHF lot of 100,000 units. When the EUR/USD increases by ten pips or points, the trader would be up $100 on the position. However, since USDCHF moves opposite to the EURUSD, the short USDCHF position would be in negative, likely moving close to ten pips lower, down $83.40. This would turn the net profit of the portfolio into $16.60. As long as there's a price discrepancy and gaining position gains is far greater than the losing position loss, then we're in business. And while as long as both positions are in BUY, we also earning overnight interest or swap everyday. Of course, this hedge also means smaller profits in the event of a strong EUR/USD sell-off, but in the worst-case scenario, risk become relatively lower compare to trading naked EUR/CHF pair.
Now that we know the logic behind the powerful system. We will need the help of the hedge calculator to tell us how many lots to buy on a particular pair to get the closest hedge as possible.
One last important note: While the government mandates that all businesses that have anything to do with investment carry the following information.
The information on this document is for educational purpose only. Forex trading has large potential reward, but also has serious of loss as well. If you wish to invest in the forex market, you must aware of the risks and willing to accept them. Don't trade with your money you can't afford to losen. This is neither solicitation nor an offer to buy or sell securities. There is no promise or representation that any acount will or likely to achieve profits or losses similar to those discussed throughout the program documentation or web site. The past performance of any trading system or method does not necessarily indicate future results. There is a potential that an investor ia at risk to lose some or all his principal when investing in the forex market.