[cornellj]

Hallo Ivan,

I make use of a similar strategy in trading and hedging the two currencypairs USDCHF and EURUSD. I use the Swiss trade to earn interest with a carrytrade and hedge the position with the Euro trade for short term pip profits (using marketprice volatility ) while reducing the risk on my Swiss trade.

Last year there was a thread on which a number of people debated the pros and cons of hedging. The thread is listed at the bottom of this thread, it might of use to you with your own plans.

I make extensive use of hedging as part of my strategies and make good profits doing it. I use 1-100 leveraged accounts though, but regulate losses with trade size, trade management and hedging strategies.

You do not believe in the use of margin, I do. The money and trade management becomes important factors in your strategies when using margin and leverage. Judicious use of leverage and margin are good for growing your capital and profits.

Any form of hedge (or arbitrage) that can reduce the risk to your capital can be used when you take a position. The reason I use the USDCHF and the EURUSD is the 99% negative correlation between the pairs. One goes up the other goes down. The 99% correlation is the best "odds" I can get anywhere, so I use it to advantage.

I have been trading these strategies successful for more than 5 years and I keep a journal in the Journal section of this forum illustrating how I use these strategies.