Disliked@Mr4x86 I read all of your post and understood your hedge method. But I don't see your mention about contract size of your broker, because it not similar to another, so that volume will different when we calculate for hedge What time do you open trade? daily open or US session open?Ignored
The smallest lot size for US30 with Pepperstone is 0.1 lots, which means I can go 0.1 lot US30 and 0.9 lot US500. I understand a lot of brokers only offer minimum lot size of 1 for US30, which means the minimum lot size for US500 is 9, which has a significantly higher margin requirement.
I would only place these trades at or after US market open (0930 New York Time), since the spread for my broker is at its narrowest during this time, and I assume will be the same for most.
Try in a demo account, you can do the same thing in MT4 you will just need to manually open both positions, and then close them when you're enough in profit that slippage will not turn your trade negative. For me, that would be roughly $10-$20 using a 0.1 lot size, or $100-$200 using a 1 lot size with the US30 symbol. The way you can tell if lot sizes are correct is that one position should turn positive, and one should turn negative by roughly the same amount almost instantly during US market open hours. If one position starts moving much faster than the other, then you know you need to readjust your lot sizes. I believe for most CFD brokers the 9:1 or 10:1 ratio of US500 to US30 is correct though. Not sure how it would go with futures / e-minis etc as I have never traded these.