The hedging technique is clear from the trades dated January 29th and 30th.
This time it had worked out nicely, but what happens if the market decides to linger around the price level of the hedging position, stopping out and reentering it (with 3 pips SL in this case) on numerous occasions, again and again...??
Well, I know the answer from first hand, as I created such a 'Hedging EA' (to compliment a Martingale EA to prevent its inevitable demise). It did work well for a while, but at one point the market started to go sideways for a prolong period of time hitting the hedging EA's entry and SL levels numerous times, eventually chewing up the account in small pieces like a piranha (as opposed to 'Martingale strategies' which blow up your account at once).
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that number is not correct. Myfxbook is showing the amount for the worst trade. but that trade has been open along with a hedge trade which you can see that trade right after the 90% trade. so the drawdown of the account has not been more than 30%.
Please let me know if you need more clarification.
Based on the trade analysis, the account balance DD was probably much less than 90%, as the BUY hedging position stepped in action to counteract the open loss of the SELL position.
Nevertheless, as Jarora stated it correctly: 'The hedging technique is for death of scalping strategy.' confirming what I had mentioned previously.
hedging is not the death of scalping. it saves the day when things go wrong, and of course in trading things can go wrong alot. so thats when hedging trade jumps in trying to save the day. Also it doesnt happen too often. may be once or twice a month.
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