Disliked{quote} Hello, How would you identify the trend? I have played around with the hedge concept, and yes it is true bigger is the hedge quicker the chance to get out on top, but you also run the risk to take the hedge at the very top of the move resulting in getting into negative very quickly.Ignored
There are many different ways to identify the trend... maybe the easier one could be check how many PIPs in negative the basket is at the moment (meaning it is against the trend). Checking the % drawdown is also a good option - maybe the best. This can be associated to other indicators, but from a hedging standpoint it may not be necessary.
You're right with your comment about getting the hedge enabled on the top of the trend and then seeing it reversing and lose the account as a result... that's why I am suggesting an 'insurance hedge', which is a hedge against the original one in case the trend reverses. These reversals would usually fluctuate up and down hence these hedge orders would both save the account and help get out of the losing basket a lot faster.
Thanks,
Marcos
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