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jones_jemma Apr 17, 2007 8:49am | Post# 1

Hedging System
 
Anyone here use the fixed odds websites to hedge stop losses and the likes on their real trades? I believe I have come up with a way of doing this obviously it cuts your profit a bit but stops any big losses if your stop is hit. any thoughts?

mrmikal Apr 17, 2007 8:59am | Post# 2

Jones,

Care to share YOUR thoughts on the subject?

Anyone here use the fixed odds websites to hedge stop losses and the likes on their real trades? I believe I have come up with a way of doing this obviously it cuts your profit a bit but stops any big losses if your stop is hit. any thoughts?

jones_jemma Apr 17, 2007 10:46am | Post# 3

I use IG index and usually go for 20 per point on the currencies. I put my stop say 200 points away from the live level of EURUSD. I place my trade and then I go to bets for traders. I discovered this site on monday but as yet its not taking real cash. I buy what they call a one touch bet just say 1 point before my IG stop. usually for 50 to win 1000 and buy four of these. So for 200 I am now covered my full loss hence 3800 better off if my stop is hit.

Anyone any opinion or experience with this kind of thing?

Scientist Apr 17, 2007 10:55am | Post# 4

Have you checked BetOnMarkets?

jones_jemma Apr 17, 2007 11:00am | Post# 5

No not yet, will go and look now. Do you use Betonmarkets?

Scientist Apr 17, 2007 11:24am | Post# 6

No not yet, will go and look now. Do you use Betonmarkets?
I have used it before but moved on, your method looks interesting though cause you can actually sell your bet back when you reached your target on the spot market. You could go for 10-20 points on 10 lots and still be able to sell back your hedge bet for a good price

mrmikal Apr 17, 2007 11:31am | Post# 7

Jones,

I need to understand what's happening here because it sounds interesting.

OK, so do you use 2 brokers? or what? Do actually trade a spot rate one broker, and then what? It sounds interesting, but I can't figure out exactly what you're doing. Can you provide just a little more detail?

1) Are you using 2 brokers and trading in opposite directions using one as a hedge against the other?
2) If so, how do you make money doing this?

I use IG index and usually go for 20 per point on the currencies. I put my stop say 200 points away from the live level of EURUSD. I place my trade and then I go to bets for traders. I discovered this site on monday but as yet its not taking real cash. I buy what they call a one touch bet just say 1 point before my IG stop. usually for 50 to win 1000 and buy four of these. So for 200 I am now covered my full loss hence 3800 better off if my stop is hit.

Anyone any opinion or experience with this kind of thing?

Scientist Apr 17, 2007 12:26pm | Post# 8

Having a better look at it BoM looks expensive for this kind of trading. What crossed my mind is that you could take multiple scalps. Once you reach your profit target then wait for price to retrace at opening level to take a new trade. Will have to do more thinking and testing...

schoe Apr 17, 2007 1:15pm | Post# 9

I use IG index and usually go for 20 per point on the currencies. I put my stop say 200 points away from the live level of EURUSD. I place my trade and then I go to bets for traders. I discovered this site on monday but as yet its not taking real cash. I buy what they call a one touch bet just say 1 point before my IG stop. usually for 50 to win 1000 and buy four of these. So for 200 I am now covered my full loss hence 3800 better off if my stop is hit.

Anyone any opinion or experience with this kind of thing?
Sounds too good to be true. So you are getting a 4000 stop 200x 20 for the bargain price of 200 ?

If that were true everybody would be doing it surely !

schoe Apr 18, 2007 4:38am | Post# 10

I've found the site you are talking about Jemma and played around with the bets. If you go long 20 per point and put your stop 200 points away for 200 yes you are covered if the market falls 200points in 3 days but if it falls only 195 points for example then you will still lose a lot of money, nobody has stops that wide!

jones_jemma Apr 18, 2007 11:00am | Post# 11

OK its not fool proof and my example was not the best. You make a good point there Schoe, but I am going to do more investigating on this and post my findings. I will paper trade it and try out different stops and one touch bets. Hopefully I can optimize it in someway.

Could be good for some form of downside protection.


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