Market Phase Hedging Method

Can you please explain why your trade was triggered? Based on what you have shown... are you expecting a pulse phase? what will be your sl and tp levels?

We will never know what decision the market makes, we only pull the trigger based on what decisions
our trading systems gives us.

Have a great trading week!

No SL on those trades TradeMinim? I suppose its lucky that you can handle a big drawdown!

There is max draw down managed at 30% so far.

As we can see that, you have hedged your positions now, is that the part of the strategy that is executed all the time?

I was kind of taking a similar approach using gold and silver, however pretty unsuccessful until now. And the approach has made me even more confused but looks like taking opposite positions on same asset to hedge might work. Kindly show us what you do!

The devil is in the detail. Pulse formed on 5min and we got a range, sell on edge
to secure it through the weekends.

You closed your long position and let the short position run. How do you decide on which position to close and let the other one run?

Every Ranging Phase, or Pulse presents an opportunity. In this live trade we see that it doesn't matter if the
market goes up or down, we are ALREADY IN THE TRADE.

Bottom highlighted is SSR or what we call significant Support and Resistance. Area where buyers are in interest and where
sellers take precautions, this is where we make decisions to close our positions.

1. Market phase - Direct Flow, Impulse, Pulse (Heart beat of the market)
2. SR (CSR, FSR, SSR) Coming up next week, keep your eyes peeled to the thread
3. T. Zone (SRZ, FRZ)
4. Pulse Extended
5. Cloudwaze
6. Price Strength Analysis

Once you finish mastering all the tool sets, you'll start opening a whole new perspective towards the markets

Okay, I think I am understanding a little by little. So, you showed the pulse phase in 5 mins time frame... Is that the timeframe used all the time?
And I guess the SR means support and resistance. The three types must have their own significance.

You'll understand deeper in the following months. It does however takes practice and hard-work, you'll need to
do your homework to speed up the process. Will open up a private session to you only once we go through all the
syllabus. You can ask me any questions you like by that time Have a great trading week!

Gold looking pretty interesting. Pulse setup in the making, let's look for a trade when the market opens

I still not inderstand how did you find a location for entry.

Chinese Golden Week Holiday - China is closed for the week - so no action from the Shanghai Gold Exchange. Historically, this is a period of gold weakness.

Once we go through all the tool-sets and live trade examples you will get a clearer picture of it.
You'll also need to practice the techniques given, it's soooo important for your brain to rewire itself and
get the "picture" subconsciously.

Nice thread, looking forward to learning more about the trade set ups.

Welcome to the thread ozzie, you'll gonna have loads of fun and knowledge bombs here

Loss taken -5% on today's trade, will discuss about the trade I took later on tonight.

Subject chosen is timely but Hedging , options, etc are the words spot fx traders don't want to know about.

Some of reliable MT4 brokers provide a hedging platform to enable buy and sell of same symbol without asking for extra margin. Only bid-ask spread affects the margin capital but it is a minor issue.

It is essential to learn when to use hedge lock and when to release it. It demands a lot of patience. That's why impatient traders hate it.
Rules have to be formulated on locking and unlocking of positions. I have found one by hands-on experience.

My experience with hedging started with the use of an EA that does the random trading. EA will enter random trades based on logic coded. It could be a buy or sell or both within an interval of a couple of seconds. No manual guidance for entry. Only Manual intervention was for hedging. Because I am not using Stop Loss. Only TP and trailing stop.

EA is like a machine producing 16 pips gross (12 pips nett after meeting all trading costs).

I tried a demo whose results are posted on FF.

Because of Brexit, I tried with GBPJPY 28 lots and soon realised it was not possible to manage hedging of so many lots manually. Somehow because of the strong momentum, I could bring the lots level to 8 with sustained hedging.

This process of coping with 28 lots exposed me to the usefulness of Margin Level% in controlling drawdown.

Maring Level% is like a train guard waving red or green flags. Thanks to this guard, I stopped trading until mean reversion took 30 days to liquidate 20 lots and I was left to manage 8 lots.

Eight lots were manageable. But because of tight margin level, there was little scope for hedging.

The idea is like this: when 2 lots go into drawdown, 6 lots are there which will keep producing profitable pips or drawdown pips (no guarantee of profit). A stage also appeared when all 8 lots were in drawdown. The pip production machine stopped . Equity touched perilious position. Margin % level told me to keep quiet and not attempt any fire-fighting.

I kept quiet and the demo's ESMA regulated broker exercused Margin Stop-Out rule (a step prior to Final Margin call as per new ESMa rules) so I can't trade but at the same time the broker will not liquidate the account because it had not reached margin call mark. In a way, it was like a lifeline for me which again taught me a powerful lesson of how patience pays off. I did not trade for 45 days and luckily the drawdown did not grow enough to trigger margin call. At the end of 50 days the reversal happened and all the positions ended with profit. My swaps bill mounted and almost 30% of my profits went to the broker. I think brokers make a big killing by ways of swap costs itself.

Sinece I had no trading activity for 50 days, the ESMA broker deactivated (not closed) my demo account as per their 45 days inactivity rule. That is perfectly understandable.

In 50 days no trade was executed because of stop-out. Had it been a live account, it would have been activiated.

I learned ESMA rules of having Stop Out and Margin Call actually reduces leverage to around 1: 20. It is supposed to be 1:30. Good for traders.

The end result was 51.43% growth in my demo account in 87 days. And the drawdown was 10.15%. Absolutely a delight. But had it been a live account, what could have been the psychological pressure. I deliberate chose $20,000 capital a risk well within my comfort zone. I would not have really felt much had it been a live account as well. Major worry was swap and commission cost of 30% in 87 days.

Now I am trying to control drawdown in two ways by having

(a) a diversified portfolio of 8 symbols.

(b) restricting maximum lots to 8 . I found up to 8 lots can be managed manually.

Manual managment is basically applying hedging locks and releasing them. Important is to ensure Margin level% remains at 600%

I use margin level% to apply the locks. I don't have to think too much about it.

But I do I have to think when to release the locks. Is it when it hits resistance/support/daily average or Fibos? Extensive experience or practise guides you but there can be a rule made when to release the lock and take a chance.

May be 800% margin level should be when lock is applied and released after making up mind when to release it. So I have to reduce lot size or number of lots to match use of equity for margin. If at 800% I release the locks and it works in my favour, no issue.
If released and it keeps working against me, then again I should apply the lock at 600% margin.
If I fail there I must against apply brakes at 400%. I have to keep taking my chances because I don't use Stop Loss at all.

I am an options buyer and hate the idea of having stop loss. As an options buyer I can have umpteen number of stop losses and still achieve my trading goal.
The only thing I have to be ware of time decay. Either I buy options with a long duration, or if I go for short duration I have to make myself doubly sure that
I exit in 2-10 days with profit or loss whatever be it.

I hope to learn from your thread the intricacies of gold trading and then think of whether to buy options or trade spot and use hedging.
I have no idea of how gold behaves. Normall all trades behave similarly at support and resistance levels. I don't want to spend my time on analysing fundamentals of gold. I would rather look for an anlyst who has been doing this job for at least 15 years and use the analysis to trade.

I want to remain a driver of a car and don't want to be an engineer as well.

Will look forward to learn from your experience.

Blown away by your response simnz, the process you've gone through are exactly the same as ours.
We refined throughout years to improve the edge of Market Phase Hedging System and it's a never ending journey,
the system is great but still have big room for improvements.

After live experiencing this system for close to a year, we can say it's... freaking boring This system is FAR from discretionary.
Fixed with multiple set of rules with 4 setups for every scenario, you'll realize that either the market goes up, or it goes down.
Sounds simple but that's how market moves. But is it profitable? Yes, we achieve averaging 100% annually on back-testing, 1 year on demo and
1 year on live to validate our system. Here's the back-test results with starting balance of $10,000 compounded over 5 years.



The trading activity can be sped up depending on the timeframe you are trading with.
Market Phase Hedging's average holding time is 5 days.

Swaps eat up our profits close to 20% Annually, it's part of the trading costs you'll need to bear with when using Hedging.
Your draw down control methods is very well thought of! We thought of the same and started diversifying symbols, now we are forward 6 months
into testing on other pairs. The performance are positive but the draw downs are bigger, that's the trade off.

Weekend Gaps and Pip Range Changes also affect the profitability of the system. We usually try to avoid trading through
weekends unless we have a hedge in place.

Gold is chosen for it's stability. We have closely studied the behavior and fundamentals that affect this instrument before
choosing it as our primary pair. Other pairs can be traded, but as usual we need time to decipher and study.

Looking forward to more of your inputs to this thread, have a great trading week