Interest rate differentials

[MickMason]

Originally Posted by psytrader

Skip the forex broker and do the real deal through a bank. Then again, I dont have any contacts at the bank of Japan so I cant help there.

Do you need any contacts, just open two accounts, it's what I did when I started trading before the advent of all these marketmakers. I had a regular checking account and a US dollar account and transferred money between the two, a bit primative but I made some money despite the wide spread.....but in those days I wasn't scalping intraday!

[psytrader]

Huge spread! My father was in London two months ago and got 2.00 on the gbp/usd.

If you dont mind my asking Mick,...what was your source of leverage for your multiple account scheme?

PSY

[MickMason]

Originally Posted by psytrader

Huge spread! My father was in London two months ago and got 2.00 on the gbp/usd.

If you dont mind my asking Mick,...what was your source of leverage for your multiple account scheme?

PSY

2.00, what was the high a couple months ago 1.90? Wow that's around 10 cents!! It wasn't quite that bad, from memory it was about 30 or 40 pips, perhaps more I can't remember now, I'll have to dig out an old statement for a laugh, cable was around the 1.50's, now that would have been a nice long

No leverage, just transfering sterling to dollar and back again, you'll never guess what I used to decide trades....charts? Indicators? Noooo......the tourist rate pages on Ceefax, lol, I'm surprised I ever made a cent! Indicators and charts, who needs 'em, Ceefax rules, lol!


Mick

[bbjit]

Originally Posted by MickMason

2.00, what was the high a couple months ago 1.90? Wow that's around 10 cents!! It wasn't quite that bad, from memory it was about 30 or 40 pips, perhaps more I can't remember now, I'll have to dig out an old statement for a laugh, cable was around the 1.50's, now that would have been a nice long

No leverage, just transfering sterling to dollar and back again, you'll never guess what I used to decide trades....charts? Indicators? Noooo......the tourist rate pages on Ceefax, lol, I'm surprised I ever made a cent! Indicators and charts, who needs 'em, Ceefax rules, lol!


Mick

Yes it can be done I know somebody personally that is still doing this through his bank, it is quite amazing.

[bbjit]

Originally Posted by psytrader

I think that that type of leverage has its uses in the spot trade, and in real estate.

My suggestion, albeit untested, would be something more like 2 to 1 on a governmet secured bond of some sort in the UK. Skip the forex broker and do the real deal through a bank. Then again, I dont have any contacts at the bank of Japan so I cant help there.

When you use a broker youre buying a contract not the actual currency. When you have the actual currency on a bank wire and things go sour with the exchange rate. You will still have your real sterling to look for a new investment in the FTSE or some other method inside the UK.

EhhHem,...in short,...keep your currency real for longer term investments. If you get caught in a position where your cable cant leave the UK without losing value. You can still find an alternative cable denominated investmet to continue to grow with.

I like your thinking a lot. It is the stuff that wealthy people are made of. Find a cheap source of money and combine it with moderate returns. Warren Buffett started his fortune by harassing his family and friends to give him money to invest and then split the profit 20/80. The friends and family spent the 80 and he reinvested the 20,...the rest is history.

If foerx isnt the way to make it happen. Its not the end of the world, just the start of the search for a new source.

Keep us posted.

Regards

PSY

Thanks for this bit of advise Okay so this money can be used better in another better place.

My wife and I are planning around the world trip so I was also wondering what the optimal time frame would be to trade whilst on the road?

[Nonpiker]

bbjit,

I think one thing you may have missed is the fact that the roll rate can and do change. You are not locked in like with a forward (discount or premium points), you are subject to the daily roll rates. If something should occur and the BOE slashes rates and the BOJ hikes your 2.0%+ goes down the tubes.

[psytrader]

Originally Posted by bbjit

Thanks for this bit of advise Okay so this money can be used better in another better place.

My wife and I are planning around the world trip so I was also wondering what the optimal time frame would be to trade whilst on the road?

None at all.

Trading is a job. Vacation is for fun. JMHO,...You might ruin both if you mix them.

PSY

[Jack_Jones]

Hi, i agree 400:1 leverage is scary but if you have the capital... say 100000 why not use it just leverage the total amount down. So the $200 would give you a $80000 position? I fail to see a problem here so if someone can point it out it'd be appreciated.

I guess the problem comes when people mismanage this type of trading.

Although if I had a $100000 to trade with I'd be looking at getting a "real" market account. I believe these start at $50k up.

Either way it's high risk so I wouldn't be putting the life savings into this kind of investment

Also you could free up the $100k by using half for the trading and putting the other half somewhere safe. So if needed you can just trans the money to the trading account.