Forex trading strategy #18 (Hedging strategy with 2 brokers using rollover-free account)
Submitted by User on September 4, 2008 - 22:54.
Idea: to benefit on interest with positive rollover pairs, such as GBP/JPY, USD/CHF and others.
Strategy requires having 2 accounts with different brokers - one with each broker.
The first broker should pay interest for carrying the trade, while the second should not charge or pay any interest for carrying trades.
I don't know if such type of brokers who don't charge/pay rollover interest exist today. If anyone knows, please advise.
the rules are simple: open Long position, for GBP/JPY, for example with a broker who pays interest, and immediately open Sell position with a broker who doesn't charge interest. Buy and Sell positions cancel each other.
Hold positions for as long as you like (for month or years) while earning interest everyday on rollover with the first broker.
Additionally monitor the account which is on the losing side to make sure there are enough funds to sustain losses, otherwise add funds.
The list of positive interest pairs (changes over the time as governments cut or increase rates; also various Forex brokers have their own rollover policies, where they may not pay positive interest on certain pairs. Check with your broker).
Positive interest is paid when Buying:
Positive interest is paid when Selling:
So, again, my problem is, I don't know where to look for such brokers that don't apply rollover charges.