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Price action at the core / tma intra day

  • #2,381
  • Mar 19, 2019 8:14am Mar 19, 2019 8:14am
Quoting myoda
{quote} hedging doesn't reduce your balance. and if you have sufficient margin you can close the hedge without any "loss" later. there is no right or wrong. its a matter of preference and one's trade management strategy. you may have nothing to study here, but there are many newbies who come to learn and doesn't know what hedging is.
Yes it doesn't reduce your balance, but that doesn't matter, because it might reduce your equity witch is your true account balance, you can close the hedge without any loss later but you also can make the loss bigger. If its a matter of preference and trade management, its up to people to trade the way they like. But in that example using a stop loss or hedging is the same thing ( it actually cost more hedging because of the extra spread).
  • #2,382
  • Mar 19, 2019 8:33am Mar 19, 2019 8:33am
Quoting STrading
{quote} Yes it doesn't reduce your balance, but that doesn't matter, because it might reduce your equity witch is your true account balance, you can close the hedge without any loss later but you also can make the loss bigger. If its a matter of preference and trade management, its up to people to trade the way they like. But in that example using a stop loss or hedging is the same thing ( it actually cost more hedging because of the extra spread).
@Nimh showed an example of hedging/counter-hedging for the benefits of other members. Whether using stop/loss is the same, better or worse is irrelevant. it's up to individuals what to make out of it.
  • #2,383
  • Mar 19, 2019 8:53am Mar 19, 2019 8:53am
Quoting Nih98
{quote} Just my personal understanding about 'hedge/counter hedge' {image} maybe it help regards NIH
Some PM me about explaination at point 11

here is the 'other' configuration, with exactly same positions, but with different 'hedges/counter hedge' pairing, suppose price reach at that yellow dashed line

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 119 KB


hope it help
NIH.

PS. sometimes I prefer to keep silent and do my own business, because when I try to give small help to others, there always 'smarter' gods that complaining.. lol. so i will stop right here, back to the floor and continue my dance.
Dog + Smile = Beautiful Day
  • #2,384
  • Mar 19, 2019 8:55am Mar 19, 2019 8:55am
Quoting myoda
{quote} @Nimh showed an example of hedging/counter-hedging for the benefits of other members. Whether using stop/loss is the same, better or worse is irrelevant. it's up to individuals what to make out of it.
But if hedging instead of using a stop loss is a worse solution dont you think that it is relevant? Why pay more to achieve the same result? I replied to Amundo where he said that that picture is worth a lot of study, well he will probably spend some time studying a solution that is more complicated and costs him more. Now if i am wrong please correct me.
  • #2,385
  • Mar 19, 2019 8:58am Mar 19, 2019 8:58am
Quoting Nih98
{quote} PS. sometimes I prefer to keep silent and do my own business, because when I try to give small help to others, there always 'smarter' gods that complaining.. lol. so i will stop right here, back to the floor and continue my dance.
Then please show where are the "smarter" gods wrong.
  • #2,386
  • Mar 19, 2019 9:26am Mar 19, 2019 9:26am
Quoting STrading
{quote} But if hedging instead of using a stop loss is a worse solution dont you think that it is relevant? Why pay more to achieve the same result? I replied to Amundo where he said that that picture is worth a lot of study, well he will probably spend some time studying a solution that is more complicated and costs him more. Now if i am wrong please correct me.
As i said there is no right or wrong. If stop/loss works better for you, then good for you. There is more than one way to skin a cat. IMHO, hedging works better FOR ME if i am doing intraday. Yes, the picture worth a lot to those who just got started to see merit of using hedges vis-a-vis normal stop-loss. It may be nothing new for some but it maybe a new thing for some others
  • #2,387
  • Mar 19, 2019 9:58am Mar 19, 2019 9:58am
Quoting STrading
{quote} But if hedging instead of using a stop loss is a worse solution dont you think that it is relevant? Why pay more to achieve the same result? I replied to Amundo where he said that that picture is worth a lot of study, well he will probably spend some time studying a solution that is more complicated and costs him more. Now if i am wrong please correct me.
It doesn't technically cost more than a stop to put on a "hedge". If you modify an existing open order in MT4 you will see that the Order Type has a selection drop-down and one of those selections is "close-by". You pick the order to close-by (a buy closes a sell) and the order is settled at the broker end with only one spread cost.

So that is one reason not to use a stop because it won't cost any more anyway. The second reason is, having the trades open and allowing price to do it's thing could present a situation that is more favourable to your hedged order pair. But once it is stopped, it's gone. Don't assume that because you don't understand the benefit, that there is no benefit in hedged order pairs. Alot of it has to do with psychology of course.

Kind Regards,
Paul
  • #2,388
  • Mar 19, 2019 10:20am Mar 19, 2019 10:20am
Quoting myoda
{quote} As i said there is no right or wrong. If stop/loss works better for you, then good for you. There is more than one way to skin a cat. IMHO, hedging works better FOR ME if i am doing intraday. Yes, the picture worth a lot to those who just got started to see merit of using hedges vis-a-vis normal stop-loss. It may be nothing new for some but it maybe a new thing for some others
There is no right or wrong i agree with you, and im not totally against hedging. I sometimes end up with hedged positions. But when Nih98 said cut your loss with hard stop or lock your floating loss with a hedge position, those are the same thing, and the second one costs more to do so. I replied to Amundo to alert him that although he might choose to hedge is positions and he might find it easier to manage his trades by hedging, the reality is that in the end it will cost him more, i understand that hedging a position might be easier psychologically, to be able to handle the loss later and to be able to exit the hedge with a profit or at break even. But it is a fact that hedging costs more and offer no advantage in terms of profits, so traders should be looking to hedge less as in the long run and with lots of hedge trades opened those extra spreads will start to add up, and in lets say a year it could be a considerable amount of money. In this market there is only one way to skin the cat, your equity goes up, you made money, your equity goes down, you lost money.
  • #2,389
  • Mar 19, 2019 10:29am Mar 19, 2019 10:29am
Greetings guys,
I would like to add one more thing in regards to hedging or non-hedging discussion
If the Broker is paying you rebates then even if the order is closed as 0 profit or loss you may still get something from Broker

My 2 cents

Thanks
R
  • #2,390
  • Mar 19, 2019 10:31am Mar 19, 2019 10:31am
Quoting swd
{quote} It doesn't technically cost more than a stop to put on a "hedge". If you modify an existing open order in MT4 you will see that the Order Type has a selection drop-down and one of those selections is "close-by". You pick the order to close-by (a buy closes a sell) and the order is settled at the broker end with only one spread cost. So that is one reason not to use a stop because it won't cost any more anyway. The second reason is, having the trades open and allowing price to do it's thing could present a situation that is more favourable...
Ok but whats the advantage of a "complicated" stop loss vs a normal stop loss , explain to me what do you gain by doing one vs another?
"The second reason is, having the trades open and allowing price to do it's thing could present a situation that is more favourable to your hedged order pair "
your trade when you hedge is not "open", your equity is not moving, If i buy 1 lot and place a stop loss that stop loss is a 1 lot sell pending order, it is the same thing as if you place a 1 lot sell pending order to hedge the trade, but with a stop loss there is no need to pay swaps.
  • #2,391
  • Mar 19, 2019 10:40am Mar 19, 2019 10:40am
Quoting STrading
{quote} Ok but whats the advantage of a "complicated" stop loss vs a normal stop loss , explain to me what do you gain by doing one vs another? "The second reason is, having the trades open and allowing price to do it's thing could present a situation that is more favourable to your hedged order pair " your trade when you hedge is not "open", your equity is not moving, If i buy 1 lot and place a stop loss that stop loss is a 1 lot sell pending order, it is the same thing as if you place a 1 lot sell pending order to hedge the trade, but with a stop...
I have not mentioned that a stop loss is "complicated". You said it costs more spread to hedge than use a stop loss, I have told you that it does not, and I think you have accepted that point. Swaps is a whole different story, but swap not need exist either, up to you and broker to agree on that. Have added into the spread if you want.

That is the only point that I want to discuss here. Everything else I keep to myself.

Kind Regards,
Paul
  • #2,392
  • Mar 19, 2019 10:42am Mar 19, 2019 10:42am
Quoting rookie14
Greetings guys, I would like to add one more thing in regards to hedging or non-hedging discussion If the Broker is paying you rebates then even if the order is closed as 0 profit or loss you may still get something from Broker My 2 cents Thanks R
No because if the broker is paying you the rebates, it will most likely pay the rebates based on the spreads that you paid them. So you will always receive less than what you paid for.
  • #2,393
  • Mar 19, 2019 10:50am Mar 19, 2019 10:50am
Quoting swd
{quote} I have not mentioned that a stop loss is "complicated". You said it costs more spread to hedge than use a stop loss, I have told you that it does not, and I think you have accepted that point. Swaps is a whole different story, but swap not need exist either, up to you and broker to agree on that. Have added into the spread if you want. That is the only point that I want to discuss here. Everything else I keep to myself. Kind Regards, Paul
You said that there is a way to not pay the extra spread, i was not aware of that, but i believe in you. but what i said more "complicated" is this "If you modify an existing open order in MT4 you will see that the Order Type has a selection drop-down and one of those selections is "close-by". You pick the order to close-by (a buy closes a sell) and the order is settled at the broker end with only one spread cost." so the question was, what is the difference in placing a stop loss or using the method that you described and sounds more complicated.
  • #2,394
  • Mar 19, 2019 10:56am Mar 19, 2019 10:56am
Quoting STrading
{quote} You said that there is a way to not pay the extra spread, i was not aware of that, but i believe in you. but what i said more "complicated" is this "If you modify an existing open order in MT4 you will see that the Order Type has a selection drop-down and one of those selections is "close-by". You pick the order to close-by (a buy closes a sell) and the order is settled at the broker end with only one spread cost." so the question was, what is the difference in placing a stop loss or using the method that you described and sounds more complicated....
Suggested reading to enlighten yourself to this. Doing it manually on the order is far easier. And I don't look to make enemies, but this discussion will go no further.

https://www.forexfactory.com/showthread.php?t=701784

Kind Regards,
Paul
  • #2,395
  • Mar 19, 2019 11:13am Mar 19, 2019 11:13am
Quoting swd
{quote} Suggested reading to enlighten yourself to this. Doing it manually on the order is far easier. And I don't look to make enemies, but this discussion will go no further. https://www.forexfactory.com/showthread.php?t=701784 Kind Regards, Paul
Well you actually made a valid point on the spreads, and i will have a read on that thread. I learned something from you so thank you from bringing something that makes sense.
  • #2,396
  • Mar 19, 2019 11:41am Mar 19, 2019 11:41am
Quoting Nih98
{quote} Just my personal understanding about 'hedge/counter hedge' {image} maybe it help regards NIH
This is gold
Thank you Nih
This opened up a new mindset for me as I always used to think of trades in terms of risk:reward
I see that you are a relatively close geographical neighbor
Entities should not be multiplied without necessity - Occam's razor
  • #2,397
  • Mar 19, 2019 1:25pm Mar 19, 2019 1:25pm
Quoting swd
{quote} Suggested reading to enlighten yourself to this. Doing it manually on the order is far easier. And I don't look to make enemies, but this discussion will go no further. https://www.forexfactory.com/showthread.php?t=701784 Kind Regards, Paul
That one is very good tool!
“Stops don’t limit profits — they prevent disasters.”
  • #2,398
  • Mar 19, 2019 1:32pm Mar 19, 2019 1:32pm
at some point in time you'll hedge at a price where the market will never come back for months or years, and you'll have those orders floating around eternally, waiting to be closed and accumulating swap costs... might as well close for a small loss and move on with the next trade... just my 2 cts...
  • #2,399
  • Mar 19, 2019 2:02pm Mar 19, 2019 2:02pm
Quoting Dagaco
{quote} That one is very good tool!
It is, but hedging is like having only a spanner and then saying you have all of the tools needed to take your car from a wreck to showroom condition. It is a technique only, not a system. But I expect you know that already.

Kind Regards,
Paul
  • #2,400
  • Mar 19, 2019 3:27pm Mar 19, 2019 3:27pm
Quoting swd
{quote} It is, but hedging is like having only a spanner and then saying you have all of the tools needed to take your car from a wreck to showroom condition. It is a technique only, not a system. But I expect you know that already. Kind Regards, Paul
Yes Paul, I already know that.. Mr Nicholisten is showing there that you don’t have to pay more if you use the close by function..So even if the benefit is just psychological, why not use it? Emotions take a big part on trading as we all know. We all are different and we need to find what make us individualy profitable.

Thank you!
“Stops don’t limit profits — they prevent disasters.”
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