There has to be an uncle point. I know you say we'll be trading larger and larger as account balance grows BUT our account won't grow fast enough to where our hedge will be matched by the same initial percentage risked per trade.
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Daily Scalping Hedging/ATR Discussion 23 replies
Dislikedit is possible to code an expert advisor to manage pending orders such that in situations where hedging is deemed necessary a pending order can be modified in much the same way as a trailing stop.
Once the breakeven point has been reached one could then swap the trailing pending order for a trailing stop and continue as normal.Ignored
DislikedThere has to be an uncle point. I know you say we'll be trading larger and larger as account balance grows BUT our account won't grow fast enough to where our hedge will be matched by the same initial percentage risked per trade.Ignored
Dislikedif, as you say the +/- points of your system is calculated on the basis of an average daily range, would it make more sense to hold this as a variable, rather than a fixed chunk of +/-50.
The average daily range changes gradually but significantly over time. if we set a paramater for, say, the last two months worth of daily data, we would surely arrive at a different daily range value than if we analysed the previous two months.
I feel this might lead to a more elastic system able to evolve with circumstances.Ignored
DislikedMaybe we set a time limit that trades can stay negative? Say negative trades can only stay open for 1 month? Or maybe at the first of each month we flatten ourselves. March 07 would've ended up as a 1072 pip month if we went flat on the last day of march.
I think the extreme usefulness of the hedge is to save all the 100 pip whipsaws in a ranging environment but once the market starts trending, I think it makes much more sense to limit the time limit or maximum negative pip limit on the hedged trades. The hedges let us enter into breakouts and protect us from the -100 here and there of the basic system, BUT if we hold hedges for X long period of time, we turn from traders into involuntary investors.
Do you think a time limit or a pip limit sounds correct? 1 month? 3 months? 1000 pips? We need a way to limit the 'market won't return to here for years' trades while keeping the hedges that make us boatloads during the ranging periods.Ignored
Dislikedif we treat the 25 SMA as a reliable midpoint, one could use the average daily volatility to plot a more accurate picture of trend than an arbitrary +-50.
if, say, the average daily volatility is 118, we could plot points at +- 59.
if over time this shrinks to just 87, we could plot points at + - 43, etc.Ignored
DislikedI haven't had a chance to load up the indicators as of yet Yez but are you saying we should deviate from the +50 and -50 levels according to average daily range of the currency?Ignored
DislikedI'm NOT vouching for Yezbick's method. But would like to clarify a couple of points that have been raised.
1. I believe Yezbick inquired about the swap (or interest), all brokers play it differently, but with mine - I earn and pay interest with each lot bought or sold. Holding a buy and sell simultaneously creates a negative swap.
2. With my broker, I could have an "unlimited" number of hedged trades active - and consume ZERO margin while doing so. This is of no concern at all.
3. What if the price "never came back?" PERFECT!!!
I'd be scaling into that mega-trend (accumulating lots) like there was no tomorrow.
So what if you've got an open trade that's down 2,000 pips? Yes, interest sucks - but it's really a minor concern - because you might have made 10,000 pips on the ride up north. Then you can close out the loser if you want.
Yezbick - again, I haven't tried your method - but I suspect there's some promise to it that can be tweaked to meet different individual's needs.
But don't get cowed into changing it - just for the sake of satisfying folks who may not fully understand it.
FORWARD TEST this thing!!! Don't debate the hypotheticals, just test it.
If Yezbick says this method can produce 1,000 pips a month - then try it! Put him and his method to the test. That's probably more pips than you're earning right now.
I believe that if you get fortunate enough to get it to work - and produce a couple of month's worth of pips - you'll figure out a way to manage your prosperity. You don't have to be a helpless victim to anything the market does.
And again, if it never came back - PERFECT!Ignored
DislikedCould be possible moving towards the north position. Positive 50 level currently set at 234.51 with a 25LWMA at 234.01. Place a pending order for a Buy Stop at 234.51 to cover the North bound position.Ignored
DislikedPosition closed at 235.33 (-50 level). New positon south bound, following new trend.Ignored