I have a few questions on the following post:
Nanningbob 5 May 2014 - page 95, post 1896
QUOTE
Example #1 of successful hedging strategy:
You can hedge yourself into a permanent DD which never changes once you get the highest high and lowest low in place.
That can take years to get to that point.
Every single trade is a winner from then on out and you are winning while the permanent DD is being put into place.
Swaps in trading are insignificant if you trade low leverage. If you trade 1:1 you dont even pay a swap. Swap is only an issue with traders who trade high leverage. I trade low leverage so swaps are insignificant and I dont even consider them in any strategy.
But yes you can hedge yourself to a point where your DD wont get any bigger but you can constantly be taking winning trades. 100 pips up profit, 100 pips down profit, 200 pips up double profit, 300 pips down triple profit.
That is 1500 pips total profit and that can be had in a week or two.
Any DD from any one position would be covered within a couple of weeks and then you're in profit from then on.
(Anyway here are 4 versions of hedging that I have discovered that traders around the world have done with varying degrees of success). QUOTE
Because it can take years for the highest high and lowest low to develop, I presume we are talking about a huge range here, where we will be trading in between. A sort of range trading if you like.
"....and you are winning while the permanent DD is being put into place"
Should this read: "...and you have been winning while the permanent DD is being put into place"
or "...and you are winning while the permanent DD is kept in place" ?
Swaps are no problem with a swap free account.
Can Bob, or someone else for that matter, please elaborate on the 1500 pips total profit, maybe with a diagram.
I can only get to 1200 pips profit.
'Obviously' the hedge is kept in place by buying and selling at the same time initially and then replacing each trade once profit is taken.
When price exceeds the higher high or lower low, profits are taken and the trade(s) replaced at their new high or low.
All the while the permanent drawdown stays the same, but the balance increases steadily without any danger of a margin call and without using up any margin either.
Any comments much appreciated.
Nanningbob 5 May 2014 - page 95, post 1896
QUOTE
Example #1 of successful hedging strategy:
You can hedge yourself into a permanent DD which never changes once you get the highest high and lowest low in place.
That can take years to get to that point.
Every single trade is a winner from then on out and you are winning while the permanent DD is being put into place.
Swaps in trading are insignificant if you trade low leverage. If you trade 1:1 you dont even pay a swap. Swap is only an issue with traders who trade high leverage. I trade low leverage so swaps are insignificant and I dont even consider them in any strategy.
But yes you can hedge yourself to a point where your DD wont get any bigger but you can constantly be taking winning trades. 100 pips up profit, 100 pips down profit, 200 pips up double profit, 300 pips down triple profit.
That is 1500 pips total profit and that can be had in a week or two.
Any DD from any one position would be covered within a couple of weeks and then you're in profit from then on.
(Anyway here are 4 versions of hedging that I have discovered that traders around the world have done with varying degrees of success). QUOTE
Because it can take years for the highest high and lowest low to develop, I presume we are talking about a huge range here, where we will be trading in between. A sort of range trading if you like.
"....and you are winning while the permanent DD is being put into place"
Should this read: "...and you have been winning while the permanent DD is being put into place"
or "...and you are winning while the permanent DD is kept in place" ?
Swaps are no problem with a swap free account.
Can Bob, or someone else for that matter, please elaborate on the 1500 pips total profit, maybe with a diagram.
I can only get to 1200 pips profit.
'Obviously' the hedge is kept in place by buying and selling at the same time initially and then replacing each trade once profit is taken.
When price exceeds the higher high or lower low, profits are taken and the trade(s) replaced at their new high or low.
All the while the permanent drawdown stays the same, but the balance increases steadily without any danger of a margin call and without using up any margin either.
Any comments much appreciated.