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hedge forex positions with no loss
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SaltyWaters

Biedrs kopš Mar 22, 2010  238 ieraksti SaltyWaters Sep 29 2016 at 14:56 (labots Sep 29 2016 at 15:01 )
@5astelija I agree it's not the perfect or typical hedge but the idea is to offset the loss by going with the flow. But even with the perfect or typical hedge you cannot eliminate the risk of loss because there's no such thing, it's only hypothetical - it may move with you or against you. Trying to maintain a zero delta in hedging is not that easy if possible at all (at least for a long time).
What to call it I don't know. Fancy martingale, maybe. But isn't 'Trading' a fancy word for betting too. How many times do the technical indicators and the fundamental news prove you wrong and hit your stop loss. Either way you name it, it's all good if you are profitable.

Cheers!

The only way to end Poverty is by getting rich. Do your part, start now. The sky is not the limit, your mind is.
compuforexpamm

Biedrs kopš Aug 20, 2009  241 ieraksti kennyhubbard (compuforexpamm) Sep 29 2016 at 18:45
@SaltyWaters ,

Just to be clear, I believe you are talking about some sort of grid strategy, and I don't have an issue with that......each to their own, but I would like to make the following observations. This requires some form of asymmetrical lot sizing. Assuming I am correct.....

1. This is not hedging per se.......you still have to take a direction in the market.

2. One of my points is that a strategy like this can be devolved into a single one sided trade......eg... 1 lot buy and 1.1 lot sell is the same as 0.1 lot sell, but without the commission and swap charges.

My comments were not really aimed at grid trading as a strategy, but rather at the futility of trying to protect your capital via a hedge once you are starring a loss in the face. A $100 drawdown is just that.....once it is there, you can open a hedge trade but you simply postpone the problem until a later stage......but you cannot eliminate the problem. You have to take a position again, which implies that you may as well close your losing trade and take your new position........same same as hedging but without commission and swap charges.

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SaltyWaters

Biedrs kopš Mar 22, 2010  238 ieraksti SaltyWaters Sep 29 2016 at 19:13 (labots Sep 29 2016 at 19:14 )
compuforexpamm posted:
@SaltyWaters ,

Just to be clear, I believe you are talking about some sort of grid strategy, and I don't have an issue with that......each to their own, but I would like to make the following observations. This requires some form of asymmetrical lot sizing. Assuming I am correct.....

1. This is not hedging per se.......you still have to take a direction in the market.

2. One of my points is that a strategy like this can be devolved into a single one sided trade......eg... 1 lot buy and 1.1 lot sell is the same as 0.1 lot sell, but without the commission and swap charges.

My comments were not really aimed at grid trading as a strategy, but rather at the futility of trying to protect your capital via a hedge once you are starring a loss in the face. A $100 drawdown is just that.....once it is there, you can open a hedge trade but you simply postpone the problem until a later stage......but you cannot eliminate the problem. You have to take a position again, which implies that you may as well close your losing trade and take your new position........same same as hedging but without commission and swap charges.


Gotcha! Same thing, different approach. smiley

The only way to end Poverty is by getting rich. Do your part, start now. The sky is not the limit, your mind is.
5astelija

Biedrs kopš Oct 15, 2014  44 ieraksti 5astelija Sep 30 2016 at 07:36
@SaltyWaters Wise words, seems we have very similar understanding of forex :)

never ring the bell
bestdarngood

Biedrs kopš Nov 12, 2010  173 ieraksti bestdarngood Oct 02 2016 at 11:09
There is possibility for hedging 3 pairs and making a profit with the same size of lots for each pair. See my attachment for this with using one of my EAs. Very possible to make money in this way. Very painful to backtest, but worth it in the end as it provides a low risk way to trade Forex.
Pielikumi:

See my profile or message me for my latest EA
5astelija

Biedrs kopš Oct 15, 2014  44 ieraksti 5astelija Oct 03 2016 at 08:17
bestdarngood posted:
There is possibility for hedging 3 pairs and making a profit with the same size of lots for each pair.

I don't see the way how moving money in a circle would bring extra profits (even without considering commissions).
The ea may work on backtest due to some glitch - you don't seem to have real trading results...

never ring the bell
togr

Biedrs kopš Feb 22, 2011  3865 ieraksti vontogr (togr) Oct 03 2016 at 08:24
bestdarngood posted:
There is possibility for hedging 3 pairs and making a profit with the same size of lots for each pair. See my attachment for this with using one of my EAs. Very possible to make money in this way. Very painful to backtest, but worth it in the end as it provides a low risk way to trade Forex.


If you use the same lot size for all pairs it will not be precise hedge.
You need to calculate lot size based on rates.

I like what I trade, I trade what I like
bestdarngood

Biedrs kopš Nov 12, 2010  173 ieraksti bestdarngood Oct 03 2016 at 11:50
togr posted:
bestdarngood posted:
There is possibility for hedging 3 pairs and making a profit with the same size of lots for each pair. See my attachment for this with using one of my EAs. Very possible to make money in this way. Very painful to backtest, but worth it in the end as it provides a low risk way to trade Forex.


If you use the same lot size for all pairs it will not be precise hedge.
You need to calculate lot size based on rates.


You are wrong, same lot size is correct, different lot size then skews your position in the direction of whichever pair has the most lots.

See my profile or message me for my latest EA
bestdarngood

Biedrs kopš Nov 12, 2010  173 ieraksti bestdarngood Oct 04 2016 at 07:28
5astelija posted:
bestdarngood posted:
There is possibility for hedging 3 pairs and making a profit with the same size of lots for each pair.

I don't see the way how moving money in a circle would bring extra profits (even without considering commissions).
The ea may work on backtest due to some glitch - you don't seem to have real trading results...


Here is a better image of some of the latest trades made.
Pielikumi:

See my profile or message me for my latest EA
bestdarngood

Biedrs kopš Nov 12, 2010  173 ieraksti bestdarngood Oct 04 2016 at 07:28
5astelija posted:
bestdarngood posted:
There is possibility for hedging 3 pairs and making a profit with the same size of lots for each pair.

I don't see the way how moving money in a circle would bring extra profits (even without considering commissions).
The ea may work on backtest due to some glitch - you don't seem to have real trading results...


Also you can't test this in the Strategy Tester for MQL4 because it requires trading 3 pairs at once and that tester only tests one at a time.

See my profile or message me for my latest EA
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