When thinking about Forex market trading, it immediately comes to mind the fact that a prediction about the future direction of a currency pair is needed. If, after placing a trade, the guess proves to be right, you get a profit while if the opposite happens, you get a loss.
Unfortunately, speculating as to the way a pair is heading is no easy feat and the vast majority of FX traders fail accordingly.
We would like to draw your attention to a funny and totally different way to trade the currency market; below you’ll find only a brief and simplified explanation about how the strategy works but you can investigate it further by visiting our website, the link to which is available at the bottom of this post.
Netswap system
As you may or may not know, when a trading position is held overnight, a financial fee based on the Swap rates is credited or debited to your trading account.
The Netswap system consists in taking advantage of the differences in the Swap rates values provided by multiple Forex brokers.
To give you a simple example, by going Long 1 lot of EURUSD with a broker offering a positive swap of +3$ and at the same time Short 1 lot of EURUSD with another broker offering a negative swap of -1$, a profit of +2$ is generated every day while the two positions are fully hedged against each other.
Through this strategy, any risk incurred by the future exchange rate movement of the pair traded is eliminated and the profit is fully generated by the combined or net Swap. In other words, there is no need to guess the future direction of a pair to make a profit. All that matters is that there is a reasonable positive difference in the Overnight values and that they are relatively stable.
Our tools and services
We realized pretty soon that one of the biggest challenges of this strategy is finding the best Swap values to generate the highest return. Digging out these data and storing old values of each pair to check how often they change manually is almost impossible: there are a lot of FX brokers out there, more than 60 pairs tradable and on top of that, many FX providers display different Swaps between their demo and real accounts.
Another problem of trading through this strategy, is that in order to keep the positions fully hedged, they must be opened and then closed out simultaneously at any given time.
Also, the trade size must be calculated in such a way that it is not too large relative to the balance of the accounts as otherwise there would be the risk to get stopped out too quickly thus not absorbing the transactions’ costs, and not too small as otherwise the return would be limited.
Netswap database
In order to facilitate the Swap research process, we developed an Excel based database which draws the latest Swaps of multiple brokers for each currency pair.
The database automatically arranges the Long and Short Swap values of each pair in a descending order and also calculates the net Swap value. Not only that, all the figures are expressed in US$, this mean that you don’t need to turn each Swap value in the amount earned or lost each day before making any comparison.
The database currently includes 24 brokers but we have in plan to add many more FX firms.
Historical Swaps
Every broker covered in the database is provided with another spreadsheet file which stores the old Long/Short Swap values needed to assess the stability of the rates.
PS: these spreadsheets are also useful for other strategies involving Rollover rates such as Carry trade.
Netswap EA
We have an Expert Advisor for MT4 that simultaneously opens multiple trading orders on multiple accounts and that closes all positions when one of them is closed in one account. As long as the software is active, all the orders are perfectly hedged and profit is made exclusively from the difference of the Swaps traded.
Trade size calculation
We are able to calculate the position size for a Netswap trade based on a given percentage movement value of the pair traded so that you will get stopped out around that value and therefore trade with the appropriate size.
Calculating the right order volume is a very complicated task and our service allows you to maximize profits as well as work out the projected ROI over a given period.
Fee spreadsheets
For each broker included in the database we also provide another excel file which streams the live spread of currency pairs and also tells you if the broker allows the opening of new orders or not. This info is useful as well as you will be able to trade the best combinations with the lowest spreads and avoid those that are not possible to trade.
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You can check our verified real trading performance at the following link: https://www.fxblue.com/users/netswap-portfolio
Results come in form of a portfolio because, as explained earlier, the strategy requires different brokers.
To view the whole trading history simply click on “Closed orders”.
In case of any interest to our products we suggest to subscribe as soon as possible as prices will likely raise in the future.
To know more about this trading system as well as the tools and services we offer, you can visit our site at the following link: https://www.netswapsystem.com
For any query or information simply reply to this thread.
