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Hedging Because You Don't Want To Lose

  • #41
  • Apr 24, 2018 4:19am Apr 24, 2018 4:19am
Hedging is a good way for managing risks, due to this trading can become more safe. However, this approach requires specific skills and knowlege.
  • #42
  • Apr 26, 2018 11:08am Apr 26, 2018 11:08am
Hi, im new here..Any ideas on an EA that can take Net Profit from two open positions please.Thanks in davance
  • #43
  • Jul 3, 2018 11:20pm Jul 3, 2018 11:20pm
Quoting zonetrade
{quote} Lot sizes depends on how fast you want to recover your loss. If your zone is 100 pips wide and you want to break even at 100pips, you multiply the hedging lot by 2. I have tried few zone recovery EAs and back tested one with different zones from 20pips to 200 pips. And recovery multiplication for lot sizes from 1/3 multiplier to X4. 20 pip zone is very dangerous. You can easily find yourself in 12 to 15 opposing positions with huge margins when the market is ranging. I prefer to use much larger zones to minimize the number or positions opened....
i dont understand your calculation.
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  • #44
  • Mar 28, 2019 2:18pm Mar 28, 2019 2:18pm
Hello. I am a new trader. Instead of doubling the lot size with Martingale, would it be possible to avoid risking entire account by hedging with the same volume on both trades, and then reducing the losing hedge by half?
  • #45
  • Mar 28, 2019 5:11pm Mar 28, 2019 5:11pm
Quoting ksofty
i didn't say he isn't - i was talking about the pros of sharing, no matter free, paid or whatever. The main problem are the robots with stoploss settings - because of the toxic order flow, many of them are getting 'hunted' by the brokers
You don't seriously expect any broker to let you have your way all the time, there must be a balance I think to keep things flowing. This is a personal opinion though!
  • #46
  • Apr 12, 2019 2:18am Apr 12, 2019 2:18am
Nemeth's hedging system has most of the answers in it if you watch all the videos very carefully. It depends on heiken ashi charts. And long term daily charts. Not suitable for day traders. HA daily charts are %80 correct. He has back tested his claim and it is true. For %20 of the time that HA chart is wrong, you hedge to break even or make a profit.You have to teach yourself to see yourself as investor/trader. Not day trader. Prepare yourself to stay in for 1 to 3 months in average. Stay away from ranging markets that last 1 to 2 months.
Choose the pairs that can move 300 pips a day like GBPJPY. You can use ATR to figure out which pairs move more.
EURUSD in not an ideal pair to trade for this system.
In his video, Nemeth give a 50 pips zone example. That is a bit misleading. 50 pips zone is nothing for pairs like GBPJPY. It can go back and forth 50 pips 20 times and cause you to open position too many times. At the end of his video, explaining his robot auto trader, he claims his favorite zone size is 200 pips or more. That is the key part of the video. Use daily charts and do not use zones smaller than 200pips. You can also enlarge the zone progressively like after the 2nd position go to 225 pips zone, after the 3rd go to 250 pips zone, to minimize your exposure if you are caught in a +200 pips ranging market. Sooner or later, the market will trend in one direction min. 600 pips or more and you will win.
But the name of this game is patience. This is not a system to get rich quick. But you can easily achieve min. %30 return / year if you keep your lot size very conservatively depending on your capital. There is no limit for max. return if you risk high.
I have tested this system in the last 2 years with demo acc. And never lost any trade. It works but you have to figure out to stay away from ranging markets.
I use daily charts and use the upper lip of the bollinger band to sell and place my pending buy order 200 pips above the upper lip in case the market decides to trend up. And do the exact opposite for the lower lip of the bollinger band. Buy at the lower lip and place a pending sell order 200 pips below the lower lip.
But you can also use the heiken ashi charts as Nemeth suggests. And use the 20 moving average to determine the trend for entry and exits. You have to go back and analyze the daily charts for any pair for a few years back.
To figure out what is the zone size they range when they range. When they trend, what is the average pips they trend. How many times they trend per year etc.
You go to college for 4 years to learn a proffession to make a living. This is same. Nemeth's way is the righ way if you pay attention to every detail. Any always test with demo acc. to see the mistakes you make and search for ways to prevent them. Good luck.
  • #47
  • Oct 13, 2019 8:21am Oct 13, 2019 8:21am
Quoting zonetrade
Nemeth's hedging system has most of the answers in it if you watch all the videos very carefully. It depends on heiken ashi charts. And long term daily charts. Not suitable for day traders. HA daily charts are %80 correct. He has back tested his claim and it is true. For %20 of the time that HA chart is wrong, you hedge to break even or make a profit.You have to teach yourself to see yourself as investor/trader. Not day trader. Prepare yourself to stay in for 1 to 3 months in average. Stay away from ranging markets that last 1 to 2 months. Choose...
Hi Zonetrade,

How are you getting on with this?

Thanks
  • #48
  • Aug 20, 2020 10:19am Aug 20, 2020 10:19am
just to close this topic among many. No matter how you turn it there only 2 way to deal with losing trade. Even if you think for the next 100 years there is lnly 2.

1) you use the SL.
2) you use hedging or recovery whatever you want to call.

As for the recovery of nemeth. mHe did blown client accounts and he got sued. Honestly i don't understand why he got sued unless he signed a contract that it guarantee the capital which i really doubt.

Anyway it didn't work so people can stop arguing.
  • #49
  • Aug 20, 2020 12:28pm Aug 20, 2020 12:28pm
Hedging works only in trending Context But if the market moves sideways you will lose a lot of money
  • #50
  • Aug 24, 2020 10:44pm Aug 24, 2020 10:44pm
How to calculate hedging lot size between difference pair for example NZDJPY and GBPUSD? if I want 100% hedging them.
  • #51
  • Aug 25, 2020 5:13am Aug 25, 2020 5:13am
Hedging provides a means for traders and investors to mitigate market risk and volatility. It minimises the risk of loss. Market risk and volatility are an integral part of the market, and the main motive of investors is to make profits.
  • #52
  • Jun 25, 2021 11:54pm Jun 25, 2021 11:54pm
Sharing this EA hedging strategy. Watch the vid link.

Inserted Video
  • #53
  • Jun 26, 2021 3:46am Jun 26, 2021 3:46am
Hedging is somethng I've been experimenting with recently. I came to the concluson that it's a good option for longer tern traders if done responsibly without using Martingale tactics. Putting on a hedge trade will stem the loss for a while and give you time to reassess your situation but you've still got to make a decision sooner rather then later. The longer you hold a hedge the more risky it becomes.

Hedging works best in a moving market. When things get slow then your account will start to slowly erode away.

I decided that hedging isn't really suited to my day trading style but can be a handy tool for longer term situations. I'm now experimenting with zonal stop losses. These are not withot risk either but nothing in this game is. It's all about what you're most comfortable with.

Inserted Video
  • #54
  • Jun 26, 2021 5:03am Jun 26, 2021 5:03am
Hedging only works in ranging market, yet the market can also be trending …
Market is not random but unpredictable
  • #55
  • Jul 6, 2021 8:39pm Jul 6, 2021 8:39pm
Inserted Video
  • #56
  • Dec 3, 2022 4:59pm Dec 3, 2022 4:59pm
Quoting mackem73
{quote} Hi Zonetrade, How are you getting on with this? Thanks
Hi Mackem,
I hardly read and wright in any forum. Many years passed since i have made comments about Nemeths system.
I have tried his system with a real account and did not work due to my position size mistakes. It was a difficult system to be profitable and i increased the sizes to recover and it was a mistake.
Later in 2021, i bumped into a youtuber, an arabic guy who recorded his grid hedging trades for months. He recorded all trades by opening buy and sell at same level. Which ever way the market goes, he does not care. If the market give signs of returning like a new consolidation area, he closes the position in profit (leaves the loosing alone) and opens a new pair buy and sell but he doubles the lot sizes. Sooner or later the market pulls back and you are in profit. It only needs like %25 to %30 pull back to be in profit depending on the number of levels you open positions. Less stations you open, earlier you are in profit.
I was hooked with this system and tested for 2 years.
Never blown any account. Every sequence of trades ends up with profit. You continously watch the history and add up the positions you have closed in profit and compare that with the current - minus positions. As soon as the market pulls back you are a winner because ++ are more than -- figure.
I have tried to fine tune many parts of the strategy.
For example instead of doubling the lot size on every new station, I increased by 1 like 0.01, 0.02, 0.03 and 0.04 lots
I have tried to keep the lot sizes same, or take profit every 3 stations or 4 stations etc. I have tried all and calculated the break even points on pull backs for each variation. I have tested all in the last 2 years. And i finally decided that lot size increasing by 1 is the best variation. I have also calculated the doomsday scenario. Imagine EUR/USD will move 1000 pips without any pullback. Even in that scenario, your drawdown should not exeed %50 of your capital.
There are few areas you have to pay attention to while trading this system.
1-You have to keep your position size at minimum for your account.
2- You should use indicators like bollinger band and moving average (20,50,200,800) lines to predict pull back areas to open new positions.
3-use 4h or Daily chart to predict the trend direction and always start the first position (0.01 lot) on the outer lips of bollinger before the pullback. Open the second (0.02) on the mid line which is 20 sma. And you can ride the trend in profit.
If it does not stop at mid line and goes to lower lip of bollinger, open the 3rd station (0.03) at the lower lip. Eventually the price will go up trend. On a sideway moving market, you are free to trade from top to bottom to top again.
I wish i could send the youtube links but that arabic guy wanished from youtube. I can not find his account anymore.
Good luck.
  • #57
  • Dec 3, 2022 6:00pm Dec 3, 2022 6:00pm
Quoting zonetrade
{quote} Lot sizes depends on how fast you want to recover your loss. If your zone is 100 pips wide and you want to break even at 100pips, you multiply the hedging lot by 2. I have tried few zone recovery EAs and back tested one with different zones from 20pips to 200 pips. And recovery multiplication for lot sizes from 1/3 multiplier to X4. 20 pip zone is very dangerous. You can easily find yourself in 12 to 15 opposing positions with huge margins when the market is ranging. I prefer to use much larger zones to minimize the number or positions opened....
100 pips size grid for hedge is very big grid size
  • #58
  • Dec 4, 2022 2:28am Dec 4, 2022 2:28am
Quoting T4Trade
{quote} 100 pips size grid for hedge is very big grid size
Yes it is very big. Smaller grids in Nemeths strategy also fail in sideway markets by creating too many opposing and ever increasing lot positions. If you read my recent reply to Machem73, i have switch to a different grid hedging in last 2 years.
  • #59
  • Dec 5, 2022 1:55am Dec 5, 2022 1:55am
Quoting Flieldel
Hedging is a good way for managing risks, due to this trading can become more safe. However, this approach requires specific skills and knowlege.

No, Stop loss is the best way to manage the risk ratios! I am not against the hedging, but it’s not a good option for the general traders!
  • #60
  • Jan 5, 2024 9:57am Jan 5, 2024 9:57am
Quoting zonetrade
{quote} Lot sizes depends on how fast you want to recover your loss. If your zone is 100 pips wide and you want to break even at 100pips, you multiply the hedging lot by 2. I have tried few zone recovery EAs and back tested one with different zones from 20pips to 200 pips. And recovery multiplication for lot sizes from 1/3 multiplier to X4. 20 pip zone is very dangerous. You can easily find yourself in 12 to 15 opposing positions with huge margins when the market is ranging. I prefer to use much larger zones to minimize the number or positions opened....
I just want to say thank you so much!. I hope you are alive and can see this reply. It's been 7 years ago after I asked the original question (2016), 2 years later (2018) you replied with such detail. I'm writing this in Jan 2024 (7 years since 2016), as I've only just seen this now, and will be implementing this to test it out. Happy to connect with you @zonetrade. All the best.
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