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Just learned about hedging, does anyone use it for scalping?

  • #421
  • Sep 9, 2020 3:00pm Sep 9, 2020 3:00pm
Some great post's...perhaps it's not all over..!!
  • #422
  • Sep 9, 2020 8:11pm Sep 9, 2020 8:11pm
Quoting MoneyZilla
{quote} Great post! It does happen like that constantly! At some point, there is auto hedge going on and the operator cares only to keep the trades generated in the daily average number of signals each strategy generates. To create net position or hedge. For example, 4 signals per day or close to, is the base for each strategy involved. This is forex, so natturally, on average, there will be two buys and two sells... and then? Predictable and unpredictable auto hedging occurs. This is so vast. Huge. I am still doing different quite successful...
would you share your entry rules?
LUCKY golden trades, LUCKY gold investor trading style
  • #423
  • Edited 11:35pm Sep 9, 2020 9:02pm | Edited 11:35pm
Quoting MoneyZilla
{quote} Great post! It does happen like that constantly! At some point, there is auto hedge going on and the operator cares only to keep the trades generated in the daily average number of signals each strategy generates. To create net position or hedge. For example, 4 signals per day or close to, is the base for each strategy involved. This is forex, so natturally, on average, there will be two buys and two sells... and then? Predictable and unpredictable auto hedging occurs. This is so vast. Huge. I am still doing different quite successful...
Hedging suits who can draw a map of locking -unlocking - relocking positons from 1 to 8 times in a day while keeping enough margin to handle situations. It takes months of demo practicing.

I started on locking to relocking positions journey a few years ago on a real cent account to feel the psychological pressure.

First positive outcome took 6 months for the trend to reverse and go in my favour. 25% of gains went to broker in the form of overnight swap costs.

I found a solution of meeting swap costs later.

Which means I must do trend trading to have small quick gains before relocking until the day I am convinced major reversal will happen.

Your market reading of major trend reversal will help you decide when to release locks. If not, the roller-coaster rode keeps continuing.

Is the journey worth the time ? Yes it forces you to understand the whole process of accumulation and distribution.

Equipped with this kind of on-the-job (demo or cent account ) training and practice and with strict discipline, you will be able to identify strategic outlying positions to trade with a small stop loss positions.

One thing is for sure. It makes you to be creative and get away for good from depending on signal generating indicators that impair your ability to take a look at the market forces.
Practice makes a person perfect
  • #424
  • Sep 9, 2020 9:10pm Sep 9, 2020 9:10pm
Quoting simnz
{quote} Since you will understand this strategy easily, I am sharing with you. I will not post any more posts on it. The post and chart are self-explantatory. I normally use 1m or 5m timeframe mini candle sub-window which shows pip candles You can count the minimum size of candle height which can produce frequent transactions. It requires to do some statistics collection job, Example: I will select 4 pips as TP (1 pip cost) , so my nett gain will be 3 pips. Both sell and buy will be executed either in 50% (5 buy 5 sell) or 70% (7 buy 3 sell if I...
do you keep same distance between the trades or based on candle closed?
LUCKY golden trades, LUCKY gold investor trading style
  • #425
  • Sep 9, 2020 10:23pm Sep 9, 2020 10:23pm
Quoting fx4money
{quote} do you keep same distance between the trades or based on candle closed?
Important is your risk money involved.

How much risk are you willing to take?

I would look back at one year's data and select High to Low of six month or one year to decide to stuff account with margin money.

Rest is all up to you.

You have to make a map of lock, unlock, relock on the basis of economic events that would trigger trades.

I have posted my hedging trading journey on myfxbook and you will find me discussing in a few FF posts. To locate them, you have to go through my posts.

For the benefit of other readers, you may please reproduce it here. thank you.
Practice makes a person perfect
  • #426
  • Sep 9, 2020 10:26pm Sep 9, 2020 10:26pm
Quoting pa18
Let's say your target is 10 pips, as a scalper. Your normal risk per trade is 2%. Don't worry about the RR, scalpers normally aren't but say 10 pip emergency stop. For hedging, you spilt the risk, 1% risk buy, 1% risk sell. You place a perfect hedge, once you open a buy position, a sell position is also opened. It goes up 5, close sell position, let it ride to target. Obviously, lower profits but the point is that it's safer IF the market conditions such as slippage and spread are perfect. Anyone tried? Sounds fun but messy.
It works very well. Just do demo trades and find your own way.
Practice makes a person perfect
  • #427
  • Sep 9, 2020 10:48pm Sep 9, 2020 10:48pm
Quoting fx4money
{quote} would you share your entry rules?

I have posted some examples here with positive and negative pips signals, used as a base. There were moving average based entries with time filters, to come down to the least number of daily signals possible. Doing this 6+ yrs already and still can't juice a positive base signals in all tfs from m1 to h1 including in mt4. The first positive pips base signals do appear in h4 and higher.

The h1 and below tfs start negative from the very start and then the strategies do turn the trading to a positive result, which is good, but not the best or ideal for me. Really want to be able to go down to h1 and below (ma based), with positive pips as a base for the trading, but it seems I cant find anything, so far, after 6+ yrs.

Also using breakouts, ma channels, zig zags, candles and grids. Only zz makes it positive in m1 and higher. For me, MAs get positive in h4 and higher, unfortunately...
Maadik Hugiis. IQ 69.
  • #428
  • Sep 9, 2020 11:42pm Sep 9, 2020 11:42pm
Quoting pa18
Let's say your target is 10 pips, as a scalper. Your normal risk per trade is 2%. Don't worry about the RR, scalpers normally aren't but say 10 pip emergency stop. For hedging, you spilt the risk, 1% risk buy, 1% risk sell. You place a perfect hedge, once you open a buy position, a sell position is also opened. It goes up 5, close sell position, let it ride to target. Obviously, lower profits but the point is that it's safer IF the market conditions such as slippage and spread are perfect. Anyone tried? Sounds fun but messy.
Why not wait +_5 pips of your original intended entry then enter one type (buy or sell) in the candle direction?
It's the same.
Without despair & distraught, focus on Patience to FRESH MOTiVES.
  • #429
  • Sep 9, 2020 11:45pm Sep 9, 2020 11:45pm
The discussion is going really well here and I don't want to interrupt it but I keep thinking as LDFX said, No one really answered his question or if they attempted, the answers weren't satisfactory.

anyone favorable to hedging, to answer this very easy question ; Why would you take an opposite trade on the same pair/timeframe instead of stop reverse it ?

This just as good a place as any to insert my answer but first, a good none hedging trader according to LDFX is


According to LDFX, to be a stop reverse trader, you have to be someone with the qualities below:

1- You can't clueless about the direction
2- Your trading is not about intelligence but about emotions
3- You should avoid to pay more swap, spread and commissions to the brokers
4- cut your losers for way bigger profits (Or you are just clueless)
5- never ever (be) worried about while trading with a stop loss and without hedging
6- (Don;t use) hedging to avoid margin call...(if you do,) then you are even more clueless ...
7- The hard truth about trading is that it must be boring.
8- You can only succeed trading in the long term if you are cold blooded.
9- Hedging, no-stop loss, martingale, are just methods to avoid
10- Trading is about mastering emotions and money management, not denying it.
11- start to accept reality and work on ways to manage emotions
12- if your initial position went against you without getting out, don't hedge
13- you shouldn’t hedge but stop and reverse.
14- If you are not confident on your positions then you probably don’t know how to trade
15- ....

I'm sure there is more to it but this is a summary of LDFX's post at the beginning of this thread.

So, my answer to LDFX's question is that I lack some/most of the listed qualities. I basically shouldn't be trading at all.

I mean how do you become confident enough on the direction a pair is going with an average of 80% winrate?
I can never claim that. Some EA's I run or quasi EA's I put together have that winrate or higher certainly for a period of time but I have got issues with being an 80% and up trader especially by just looking at a bare chart. But at the same time, I love trading, so I compensate for my downfalls by employing tactics like hedging instead of being a straight shooter.

A lot of work to become an ACE like LDFX wants us all to be....or even one card below ace...I donno what that is. lol So, I make it work knowing what I know that works for me. One of them is hedging. IDK, if I can ever let go of it and become just a straight shooter. Too much to ask.
  • #430
  • Sep 10, 2020 12:03am Sep 10, 2020 12:03am
Quoting OutThere
to answer this very easy question ; Why would you take an opposite trade on the same pair/timeframe instead of stop reverse it ?

We did answer that one multiple times already. From hedging point of view, this question is more than stupid. The rate expands. Take a new starting point and you will see it. Every new starting point creates an ever expanding rate condition.

To make the answer short and simple: While hedging OUR SESSION IS NOT OVER YET. Until we reach our desirable target, which can be the sky is the limit. Literally. Why we would close, because LondonFX wants to close or WHAT? Hello?

EDIT: Again, this stupid question, shows the individual inability to dance around the chart with one buy and one sell trades. He can't do this, as he don't know how to do it. Plus, he tells the rate how much he wants, and does not take WHAT THE RATE OFFERS, as a MAXIMUM on the straight line. We are going after the maximum given. At least I do...
Maadik Hugiis. IQ 69.
  • #431
  • Sep 10, 2020 1:36am Sep 10, 2020 1:36am
First BASKET trade of the day for me. Closed for OVERALL profit which included 1 LOSS Buy trade (the cost of doing business). Second BASKET now running Trading off 1m timeframe and longer term trend (4hr) is still SHORT so need to be mindful of this.
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  • #432
  • Sep 10, 2020 2:45am Sep 10, 2020 2:45am
Second BASKET trade of the day. Closed for OVERALL profit which included ZERO loss trades. Third BASKET now running Aggregate score so far today...

2 x Wining BASKETS (consisting of)
7 x Winning trades
1 x Lost trade

How many trades would have been stopped out at a loss if trading conventualy?
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  • #433
  • Edited 5:47am Sep 10, 2020 5:26am | Edited 5:47am
Third BASKET trade of the day. Closed in OVERALL profit including 2 LOST Buy trades. Fourth BASKET now running Aggregate score...

3 x Wining Baskets (consisting of)

10 x Winning trades
3 x Loosing trades

I do not attempt to 'second guess' the direction of the market by 'LOCKING' or 'UNLOCKING' the Hedge I simply 'GO WITH THE FLOW' and let the market find it's own direction I will continue to add trades in the direction of the 'TREND' and wait patiently to 'CLOSE' the 'ENTIRE BASKET' in profit.
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  • #434
  • Sep 10, 2020 8:22am Sep 10, 2020 8:22am
Fourth BASKET trade of the day. Closed in OVERALL profit including 3 LOST Buy trades. Fifth and final BASKET of the day now running Aggregate score...

4 x Wining Baskets (consisting of)

17 x Winning trades
6 x Loosing trades
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  • #435
  • Sep 10, 2020 9:53am Sep 10, 2020 9:53am
As we all have discussed, It seems that It's necessary to avoid indicators that only offer 1 buy and 1 sell signal like moving average crossover. Because It cannot provide more than one signal during a trend.

Do you guys have any suggestions?
  • #436
  • Edited Sep 11, 2020 3:13am Sep 10, 2020 10:19am | Edited Sep 11, 2020 3:13am
Fifth and final BASKET trade of the day. Closed in OVERALL profit including 2 LOST trades, 1 BUY and 1 Sell. No more trading for today Aggregate score for today...

5 x Wining Baskets (consisting of)

21 x Winning trades
8 x Loosing trades

Maximum Drawdown at any one time = £16.00

Trading 0.01 Lots per trade, Account increase today = £34.26 = 7.65%
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  • #437
  • Sep 10, 2020 10:23am Sep 10, 2020 10:23am
Quoting Offujimori
As we all have discussed, It seems that It's necessary to avoid indicators that only offer 1 buy and 1 sell signal like moving average crossover. Because It cannot provide more than one signal during a trend. Do you guys have any suggestions?
Google 'Steve Hopwood Forex' there you will find any number of indicators that should serve you well
  • #438
  • Sep 10, 2020 10:46am Sep 10, 2020 10:46am
Quoting Offujimori
As we all have discussed, It seems that It's necessary to avoid indicators that only offer 1 buy and 1 sell signal like moving average crossover. Because It cannot provide more than one signal during a trend. Do you guys have any suggestions?
Moving averages provide more than 1 signal in a trend. It's not just crosses that can be used.

Moving average touches and bounces are also continuation signals.

A simple moving average with the right understanding of the market direction is really all some people may need.
  • #439
  • Sep 10, 2020 10:57am Sep 10, 2020 10:57am
Quoting MoneyZilla
{quote} We did answer that one multiple times already. From hedging point of view, this question is more than stupid. The rate expands. Take a new starting point and you will see it. Every new starting point creates an ever expanding rate condition. To make the answer short and simple: While hedging OUR SESSION IS NOT OVER YET. Until we reach our desirable target, which can be the sky is the limit. Literally. Why we would close, because LondonFX wants to close or WHAT? Hello? EDIT: Again, this stupid question, shows the individual inability...
Ya, I agree.
It is a matter of style.
It is nice to walk in, call your trade and walk away flat with your profit but LDFX and similar traders never achieve this consistently.
It is about one step forward and 2 steps backward and then 2 steps forward and so on.

The thing is that a large number of hedgers do that too.
Some hedgers like myself hedge when absolutely needed.
I say live and let live. Hedge and trade directional.
Whatever works without demanding other traders to trade a certain way.
  • #440
  • Edited 5:28pm Sep 10, 2020 5:05pm | Edited 5:28pm
Quoting MoneyZilla
The rate expands. Take a new starting point and you will see it. Every new starting point creates an ever expanding rate condition.
This is so simple but so important.
They have to move it

Quoting viptrading
A simple moving average with the right understanding of the market direction is really all some people may need.
Yes. This is very important too.
Indicators are very used in naive ways. Usually just the top of the iceberg of the data that an indicator deploy is used. But there is more data that can be extracted from them.

Stochastic could be an example of market time cycle instead of overbought/oversold.
Pivot Points could be an example of measuring market strenght instead of support and resistance. i.e.: Bull Trend always break R1s. When the first S1 is broken tells something.
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