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What is "Stop & Reverse Below"?

  • #1
  • First Post: Oct 4, 2006 1:06pm Oct 4, 2006 1:06pm
Euro is at 1.2697

recommendation for 1.2630 says "Stop & Reverse Below"

can someone please explain what this recommendation means?
  • #2
  • Oct 4, 2006 3:05pm Oct 4, 2006 3:05pm
Quoting ycomp
Euro is at 1.2697

recommendation for 1.2630 says "Stop & Reverse Below"

can someone please explain what this recommendation means?
Stop & Reverse (sometimes called SAR for obvious reasons) means get out of your original position and go in the opposite directon.

In you specific example the author likely suggested that you go long with a stop loss to exit at 1.2630. They provided additional instructions for you to go short at the same price. This can be done by setting your stop to twice as many contracts as your initial position. Half of the stop will get you square and the other half will get you short.

I don't like the idea of SAR orders but that's your choice.
  • #3
  • Oct 4, 2006 3:20pm Oct 4, 2006 3:20pm
thanks Phil, now I understand better... I was unaware of the long recommendation but they probably have it buried in there somewhere. So now it makes sense.
  • #4
  • Oct 4, 2006 4:33pm Oct 4, 2006 4:33pm
Some platforms, such as FXSol, call this a CAR (Close and Reverse).
  • #5
  • Oct 6, 2006 2:30pm Oct 6, 2006 2:30pm
Quoting TheRumpledOne
I wouldn't trade EURUSD long, only short.

Instead, I would trade GBPUSD long and never short.

I will do this until "something" changes.

If you don't know what that "something" is... IGNORANCE could be costing you!
Oh Oh...I know...Does it have to do with a lunar eclipse?
  • #6
  • Oct 6, 2006 2:40pm Oct 6, 2006 2:40pm
Quoting TheRumpledOne
NO.

Not at all.

Not even close.

Are you joking?

Trading FOREX is serious business. You are trading in the world's biggest market trading against the world's best traders.
I actually was joking. Ive never done any backtesting to support a system based on eclipses.
  • #7
  • Oct 6, 2006 2:53pm Oct 6, 2006 2:53pm
He's playing interest differences which means holding positions past 5 pm EST {4 pm on Fridays} and hoping your Hedged Pairs don't move too much for the Pip move to erase Interest gained.
  • #8
  • Oct 6, 2006 2:56pm Oct 6, 2006 2:56pm
Quoting Bemac
He's playing interest differences which means holding positions past 5 pm EST {4 pm on Fridays} and hoping your Hedged Pairs don't move too much for the Pip move to erase Interest gained.
If they're hedged, why worry about pips?
  • #9
  • Oct 6, 2006 3:08pm Oct 6, 2006 3:08pm
Quoting twinchell
If they're hedged, why worry about pips?
Sorry, I should have been more Specific. It's a Correlation Hedge.

Long GBPUSD ~ -3.3% Interest
Short EURUSD ~ 7.6% Interest
Net ~4.3% Interest / day

BUT
The presumption is that IF the EURUSD climbs 20 pips, The GBPUSD will also Climb 20 pips. not always the case.
  • #10
  • Oct 6, 2006 3:18pm Oct 6, 2006 3:18pm
Quoting Bemac
Sorry, I should have been more Specific. It's a Correlation Hedge.

Long GBPUSD ~ -3.3% Interest
Short EURUSD ~ 7.6% Interest
Net ~4.3% Interest / day

BUT
The presumption is that IF the EURUSD climbs 20 pips, The GBPUSD will also Climb 20 pips. not always the case.
If you're long GBP, short EUR why not just go short the EURGBP? Since the GBPUSD currently moves 50 pips a day more than the EUR that's not a very impressive hedge.
  • #11
  • Oct 6, 2006 3:24pm Oct 6, 2006 3:24pm
Quoting philmcgrew
If you're long GBP, short EUR why not just go short the EURGBP? Since the GBPUSD currently moves 50 pips a day more than the EUR that's not a very impressive hedge.
Exactly my point Phil.

Perhaps read a few more posts above.
  • #12
  • Last Post: Oct 6, 2006 3:34pm Oct 6, 2006 3:34pm
Thanks for clearing that up Bemac. Another hedge I used to do was GBP/JPY and CHF/JPY, which you should just buy GBP/CHF. Was an awesome pair to hedge; well, that is before it broke out and went crazy. Predictable I suppose.
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