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Hedging/averaging trades without prediction

  • #21
  • Oct 16, 2022 6:08am Oct 16, 2022 6:08am
Quoting Ehtishamejaz
{quote} Just a question for learning purposes: Do we get charged for hedging? when I did hedging I was not charged! Or do we get charged only when our position size is very big?
Don't know every country/broker have different rules and tariffs
  • #22
  • Oct 16, 2022 6:09am Oct 16, 2022 6:09am
Sir ,
so far , how much % max drawdown you ever experienced ?


and how long have you trade using this system ?

thanks
  • #23
  • Oct 16, 2022 6:16am Oct 16, 2022 6:16am
Quoting Waveskierrob
{quote} ...so you got nothing, thanks you've gave me something from it... 20. Only post opinions if you can back them up with evidence, opinions and beliefs are worth shit on this thread...thank you please
this strategy is very old, many people have already tried it and failed.

thee you will definitely succeed.


that is all.
  • #24
  • Oct 16, 2022 6:22am Oct 16, 2022 6:22am
Quoting tiborf71
{quote} this strategy is very old, many people have already tried it and failed. thee you will definitely succeed. that is all.
...not really a strategy, do you have any names or documentation or those who fail, please post...
  • #25
  • Oct 16, 2022 6:57am Oct 16, 2022 6:57am
Quoting Waveskierrob
{quote} ...not really a strategy, do you have any names or documentation or those who fail, please post...
I'll take that as a no...
  • #26
  • Oct 16, 2022 7:05am Oct 16, 2022 7:05am
As a day-trader, I understood that an effective hedge was a contra stop order placed your desired exposure away from the original order, less the bid ask spread.
This order gets triggered if the market moves against your original order and then you just have to find the right way to exit from the order which will depend on whether the market turns around or keeps going.
  • #27
  • Oct 16, 2022 7:53am Oct 16, 2022 7:53am
Before we begin, just to let you know that "I come from the future." - PAT Chiko

Lets start with very simple things first before getting deeper into discussion.

Here's the chart. Simple chart.
Attached Image (click to enlarge)
Click to Enlarge Name: hedging one.jpg Size: 173 KB
I come from the future.
Karen X Mas Bonus 2025 All Time Profit: $15,104
  • #28
  • Oct 16, 2022 8:04am Oct 16, 2022 8:04am
Quoting Pat Chiko
Before we begin, just to let you know that "I come from the future." - PAT Chiko Lets start with very simple things first before getting deeper into discussion. Here's the chart. Simple chart. {image}
There are numerous different trading strategies that are designed around hedging in Forex.
For this thread we only use "Direct Hedging" Method for a start.
It's up to OP to expand to other Hedging Method in future.


Direct Hedging method is to take both a long and short position on the same pair of currency.
Whichever direction the currency moves, you’ll have your bases covered.
One trade will be taken out (SL), the others will be your continuation bias trade.
Start building up and add position to target

The example is the previous chart
This is a straightforward hedging technique that’s easy to follow.
I come from the future.
Karen X Mas Bonus 2025 All Time Profit: $15,104
  • #29
  • Oct 16, 2022 8:10am Oct 16, 2022 8:10am
Quoting Pat Chiko
{quote} There are numerous different trading strategies that are designed around hedging in Forex. For this thread we only use "Direct Hedging" Method for a start. It's up to OP to expand to other Hedging Method in future. Direct Hedging method is to take both a long and short position on the same pair of currency. Whichever direction the currency moves, you’ll have your bases covered. One trade will be taken out (SL), the others will be your continuation bias trade. Start building up and add position to target The example is the previous chart...
Pat, as I understand it, using this method you have to recover 2x the bid/ask spread before you start to make a profit plus the stop loss. Definitely not a scalping strategy!
  • #30
  • Oct 16, 2022 8:13am Oct 16, 2022 8:13am
Hedge makes sense in my opinion, if
- lot sizes small
- tf max=Swing
- martingal moderate
- alernative use correlated underlyings
- SL (widely) is a must

Hedge is not only a way out of (selfmade) pressure situations, but also to equalize different levels (tf, exaggerated news, unusual swings in underlyings)

thank you for opening thread.
  • #31
  • Oct 16, 2022 8:20am Oct 16, 2022 8:20am
Quoting dantpm
{quote} Pat, as I understand it, using this method you have to recover 2x the bid/ask spread before you start to make a profit plus the stop loss. Definitely not a scalping strategy!
Hedging is tool to use with your strategy, its not stand alone.
  • #32
  • Oct 16, 2022 8:31am Oct 16, 2022 8:31am
Quoting newbiforever
Sir , so far , how much % max drawdown you ever experienced ? and how long have you trade using this system ? thanks
Never really notice as my lots are small in comparison to my bank, been using hedging and averaging for a couple of years now, these are the wrong questions as I can just tell you anything, need to follow this thread and do it for yourself to find all your answer...
  • #33
  • Oct 16, 2022 8:37am Oct 16, 2022 8:37am
Quoting Pat Chiko
{quote} There are numerous different trading strategies that are designed around hedging in Forex. For this thread we only use "Direct Hedging" Method for a start. It's up to OP to expand to other Hedging Method in future. Direct Hedging method is to take both a long and short position on the same pair of currency. Whichever direction the currency moves, you’ll have your bases covered. One trade will be taken out (SL), the others will be your continuation bias trade. Start building up and add position to target The example is the previous chart...
The silver bullet is to bring both positions to the finish line.
only one Example: Open FDAXlong&short from 08:50 CEST, ideally areboth positions in the goal until 11:00.
  • #34
  • Oct 16, 2022 8:45am Oct 16, 2022 8:45am
Quoting Isabella_D
{quote} The silver bullet is to bring both positions to the finish line. only one Example: Open FDAXlong&short from 08:50 CEST, ideally areboth positions in the goal until 11:00.
Tying it back, the piece of the script that is missing from Pat's presentation is that in the course of the day he expects to see the price hit both supply and demand during the day and will profit from both moves, roughly 1,200 up and 1,200 down.
  • #35
  • Oct 16, 2022 8:55am Oct 16, 2022 8:55am
Quoting dantpm
{quote} Tying it back, the piece of the script that is missing from Pat's presentation is that in the course of the day he expects to see the price hit both supply and demand during the day and will profit from both moves, roughly 1,200 up and 1,200 down.
One more detail, supply and demand move during the day. I have no idea how much, how often and so on. I have been looking for way to identify it with an indicator or plugin but haven't found one in my budget yet.
  • #36
  • Edited 9:07am Oct 16, 2022 8:56am | Edited 9:07am
Quoting Pat Chiko
Before we begin, just to let you know that "I come from the future." - PAT Chiko Lets start with very simple things first before getting deeper into discussion. Here's the chart. Simple chart. {image}
Very straightforward explanation. The best strategy we can use is the direct hedging method before a major economic data release.

Risking 0.5% one each side(long&short) instead of 1% on only one side is still better than 1% gone and got nothing from the move due to the unexpected release.

Thanks bro, got my strategy to build around the data release move.
More time in the market, does not mean you trade better!
  • #37
  • Oct 16, 2022 9:04am Oct 16, 2022 9:04am
Quoting dantpm
{quote} One more detail, supply and demand move during the day. I have no idea how much, how often and so on. I have been looking for way to identify it with an indicator or plugin but haven't found one in my budget yet.
That's something that you have to find out yourself on other threads, I'm not here for any of that, I will trade live trades the way I trade, take from it what you will
  • #38
  • Oct 16, 2022 9:20am Oct 16, 2022 9:20am
Quoting Fardeen1209
{quote} Sehr einfache Erklärung. Die beste Strategie, die wir verwenden können, ist die direkte Hedging-Methode vor einer Veröffentlichung wichtiger Wirtschaftsdaten. Das Risiko von 0,5 % auf jeder Seite (Long&Short) statt 1 % auf nur einer Seite ist immer noch besser als 1 % weg und nichts aus der Bewegung aufgrund der unerwarteten Veröffentlichung. Danke, Bruder, ich habe meine Strategie, um die Datenveröffentlichung herum aufzubauen.
From my point of view, there are mostly unclear, long-term opportunities to hedge important news.
Trading before news you have to have staying power
- tp has to be far away (tp of the opposite too),
- little profit in case of hidding tp because enormous widening spread
- possibly af long wait for a win (oposite sidex2 and gamechanging of underlying

Its not my recomendation to use hedge in case of red news.
  • #39
  • Oct 16, 2022 9:30am Oct 16, 2022 9:30am
Quoting Isabella_D
{quote} From my point of view, there are mostly unclear, long-term opportunities to hedge important news. Trading before news you have to have staying power - tp has to be far away (tp of the opposite too), - little profit in case of hidding tp because enormous widening spread - possibly af long wait for a win (oposite sidex2 and gamechanging of underlying Its not my recomendation to use hedge in case of red news.
My interpretation of what Waveskierrob is proposing is offsetting 'bets', and waiting for a swing to an extreme position where he would close one of the bets while waiting for the price to swing back, taking his 'real profit' somewhere along the swing back. Just a guess.
  • #40
  • Oct 16, 2022 9:39am Oct 16, 2022 9:39am
Quoting dantpm
{quote} My interpretation of what Waveskierrob is proposing is offsetting 'bets', and waiting for a swing to an extreme position where he would close one of the bets while waiting for the price to swing back, taking his 'real profit' somewhere along the swing back. Just a guess.
Yes, I agree. And ... hedge is interesting, indeed. Lets see what Waveskierrob means. In reality.
Wish nice weekend.
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