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Hedging Round Numbers with 1:~RR

  • #1
  • First Post: Dec 30, 2018 12:57pm Dec 30, 2018 12:57pm
Hello,

I have looked at hedging before but it looked like a waste of time.

So Im giving it another shot just because I am bored.

But with a new twist

So let me know what you guys think.

First, dont try this with sideways markets.

For example I tested a month of this with Eurusd from september of 2018 to end of september. I gained 1000 pips net. Using my full leverage so I doubled my account. Of course not real account or demo, I just did a visual backtest.
But if you look at Eurusd now the results wont be the same, you wont lose but not enough pips.

So just zoom out and look at the charts. From the outset its ez to see that EurCad and GbpNzd are trending nice.

If you are afraid of Gbp pairs just look at Eurcad for now.


Here is the deal:

Time frame: actually dosent matter because we will be entering and exiting using round numbers, but trades take 2 to 3 days sometimes so use Daily tf.

Entry: Use round numbers. .00 only

Exit: 50 pips stop loss, at 100 pips breakeven + 5 pips, at 150 pips 40 pips, at 200 take profit.

So we take 2 trades at a round number with same parameters.

I am posting a chart with an example.

I am too lazy right now to write anything else

So let me know if you have any quetions.

tnx
Attached Image (click to enlarge)
Click to Enlarge Name: EURCADDaily.png Size: 57 KB
  • #2
  • Dec 30, 2018 4:05pm Dec 30, 2018 4:05pm
Ok guys after looking at Eurcad for a while I decided to change it up a bit.

Now if the market is trending heavily the first method works fine, but if the market is trending so so than use the below method.
This might be depending on the individual pair and how it reacts to round numbers and ATR.

So here is what works for EurCad even if it doesnt trend heavily.

Open 2 trades at 00 round number, 1 buy 1 sell equal lots.

Sl at 50 pips for each.
Breakeven + 2 pips when price reaches 50 pips profit.
One of the trades will definetly hit-50 pips sl
Trail the othe one as follows.

Every 50 pips move sl 50 pips.

So if price goes to 50 pips + move sl to breakeven +2 pips
than if price goes to 100 pips move sl to 50 pips +2
than if price goes to 150 pips move sl to 100 pips +2
and so on.

When both trades are out with sl or tp start over at the nearest 00 round number.


Test this out with different pairs that are trending.
And give us a feed back plz.
tnx.
  • #3
  • Dec 30, 2018 4:11pm Dec 30, 2018 4:11pm
Possible outcomes are as follows.

-50 -50

-50 +2

-50 +52

-50 +102

-50 +152

-50 +202

and so on.

when its trending you are more likely to get -50 +102 and higher.

That is the edge.
  • #4
  • Dec 30, 2018 4:14pm Dec 30, 2018 4:14pm
Also dont forget to find pairs that are trending in the daily timeframe and make sure to pick a pair with low spreads.

So the outcomes will be bad if you choose Gbpnzd because sometimes the spreads go to -30 pips. (but maybe you can try different sl for this pair)

You can also choose 2 or more pairs that are trending and split your risk. But make sure these pairs are not correlated positively or negatively. Because you are looking for diversification.
  • #5
  • Dec 30, 2018 4:15pm Dec 30, 2018 4:15pm
Anyway the thread title was 1:4 RR but with the new method there is no limit to your reward. lol
  • #6
  • Dec 30, 2018 4:26pm Dec 30, 2018 4:26pm
I have to make 1 correction; i said only open trades at .00 round # I meant .00 and .50 only. But its up to the individual to experiment.
  • #7
  • Dec 30, 2018 5:04pm Dec 30, 2018 5:04pm
Looks interesting

Petru
  • #8
  • Dec 30, 2018 5:35pm Dec 30, 2018 5:35pm
Quoting Petru00
Looks interesting Petru
tnx. try testing it on some charts and post results.
  • #9
  • Dec 30, 2018 6:26pm Dec 30, 2018 6:26pm
Hi,
Hedge or counter, lets call it the same.

you will not know if you have a side ways market until it happens.
You need to trade at specific times and if you have any fear you should not try it.

It does though and you need to study..

Trade well....
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #10
  • Dec 30, 2018 6:44pm Dec 30, 2018 6:44pm
Quoting billytt
Hi, Hedge or counter, lets call it the same. you will not know if you have a side ways market until it happens. You need to trade at specific times and if you have any fear you should not try it. It does though and you need to study.. Trade well....
I agree to a point,

But this is why you should diversify with uncorrelated pairs that are trending at the moment. If the pair starts to range, STOP:

WITHOUT GOING INTO TOO MUCH ANALYSIS CAN YOU TELL ME WHICH PAIRS ARE TRENDING AND WHICH ONE OR ONES ARE RANGING?
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURCADDaily.png Size: 77 KB
Click to Enlarge Name: EURUSDDaily.png Size: 59 KB
Click to Enlarge Name: GBPNZDDaily.png Size: 64 KB
  • #11
  • Dec 30, 2018 8:29pm Dec 30, 2018 8:29pm
i think 200pip tp is just to far away, and 50pip sl is too close, you will hit sl very often before u can ever reach tp. these days very few times market move 200pip for most pairs. maybe i am wrong, but i was only looking at pair eurgbp, eurusd, gbpusd, eurjpy. mainly trading eurjpy atm.
LUCKY golden trades, LUCKY gold investor trading style
  • #12
  • Dec 30, 2018 8:34pm Dec 30, 2018 8:34pm
Quoting fx4money
i think 200pip tp is just to far away, and 50pip sl is too close, you will hit sl very often before u can ever reach tp. these days very few times market move 200pip for most pairs. maybe i am wrong, but i was only looking at pair eurgbp, eurusd, gbpusd, eurjpy. mainly trading eurjpy atm.
if its rare that market moves 200 pips than it definetly is ranging.
  • #13
  • Dec 30, 2018 10:20pm Dec 30, 2018 10:20pm
Quoting hibra68
{quote} I agree to a point, But this is why you should diversify with uncorrelated pairs that are trending at the moment. If the pair starts to range, STOP: WITHOUT GOING INTO TOO MUCH ANALYSIS CAN YOU TELL ME WHICH PAIRS ARE TRENDING AND WHICH ONE OR ONES ARE RANGING? {image} {image} {image}

Hi, i only ever trade one pair at a time.
The last time i was trading it was Cable.
if i were looking at pairs ranging/consolidating it would be on the 15 minute or/and hour time frame.
I do not do trending???

Trade well.
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #14
  • Dec 30, 2018 10:59pm Dec 30, 2018 10:59pm
Quoting billytt
{quote} Hi, i only ever trade one pair at a time. The last time i was trading it was Cable. if i were looking at pairs ranging/consolidating it would be on the 15 minute or/and hour time frame. I do not do trending??? Trade well.
Ok tnx.

Like I said its gotta trend for this method.
  • #15
  • Jan 1, 2019 5:01am Jan 1, 2019 5:01am
I am experimenting now with exactly the same rules.
But I try to add various strenght indicators, to see which pair is in move, and trade only one side. It is in testing fase, so I can not give result.
  • #16
  • Jan 1, 2019 6:50am Jan 1, 2019 6:50am
Quoting Beertje
I am experimenting now with exactly the same rules. But I try to add various strenght indicators, to see which pair is in move, and trade only one side. It is in testing fase, so I can not give result.
ok thank you beertje, pls post your results when its finished.
  • #17
  • Last Post: Jan 2, 2019 9:34am Jan 2, 2019 9:34am
Some idea to your project:
Why open 2 position , why not wait until price goes example from 1.29 to 1.195 and then entry in this direction. you can already earn 1*spread.
if the price dont touch any another level in 24h and position is not in breakeven close in profit (5-10 pip) if price come back.
Wait always if close above/below level, touch is not enough.
Place stop 5/10 pip below your "round number" stop.
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