Hedging/averaging trades without prediction | Page 49 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Mathematical hedging strategy without a stop loss 22 replies

'Averaging Down Is for Losers' - valid or not? 27 replies

Fast Averaging versus Slow Averaging 1 reply

Averaging 7 replies

Martigale and Averaging Down 4 replies

Attachments: Hedging/averaging trades without prediction
Exit Attachments

Hedging/averaging trades without prediction

  • #961
  • Nov 2, 2022 8:51am Nov 2, 2022 8:51am
Quoting Rfs199
{quote} Hey Birdland, a few questions if you don't mind (don't want to beat a dead horse here and maybe you already answered it, but just to be sure): 1) I see you're entering with both orders at the same price (long & short), but are you doing it randomly for that first trade or do you have a place in the chart where you prefer to go long or short and wait for it? 2) After the first trade hits target, how much room do you give it before placing the next trade/s? 3) Do you still enter long and short at the same time when the remaining trade is underwater?...
1) random, just when i feel good i open this random hedge .

2) i dont understand this question, can you be please more precise, thx.

3) yes i have tried it and it works. but it can be confusing with all the open trades. so i tend to close the whole trade sequence first before entering a new random hedge.
trading is like dancing, don't think and just listen to the music!
  • #962
  • Nov 2, 2022 9:04am Nov 2, 2022 9:04am
Quoting birdland
{quote} 1) random, just when i feel good i open this random hedge . 2) i dont understand this question, can you be please more precise, thx. 3) yes i have tried it and it works. but it can be confusing with all the open trades. so i tend to close the whole trade sequence first before entering a new random hedge.
Sure! I think it's better with an example:

- Let's say you enter long and short at the same price; both with a 3 pip TP.
- Price goes up 3 pips and triggers your TP.
- Now price reverses a bit (say 2 pips) and then goes back up to 5 pips.
- The short trade didn't hit TP and is now 5 pips underwater.

My question is, how much room do you give that short trade to hit the TP before averaging in or placing other trades?
  • #963
  • Nov 2, 2022 9:04am Nov 2, 2022 9:04am
lets do a random trade, because i have some time;-)

hedge@1494, tp4
trading is like dancing, don't think and just listen to the music!
  • #964
  • Nov 2, 2022 9:22am Nov 2, 2022 9:22am
Quoting Rfs199
{quote} Sure! I think it's better with an example: - Let's say you enter long and short at the same price; both with a 3 pip TP. - Price goes up 3 pips and triggers your TP. - Now price reverses a bit (say 2 pips) and then goes back up to 5 pips. - The short trade didn't hit TP and is now 5 pips underwater. My question is, how much room do you give that short trade to hit the TP before averaging in or placing other trades?
now i understand, thx.

in this situation i wait 5-10 minutes, maybe the other side of the hedge hits also TP and i have 2 winners (1 hedge closed)

now we could have a runaway market and the market can in 5 minutes easily make -30 pips on the LONG loss position. then i will have to short again, lets say if the long position is minus 15-20 pips. then i play safe and watch the market.

but we dont know if this is a runaway market, or call it freight train. thats the problem.

so i would rather try to buy again a LONG to get a good average price. probably 7, 10 or 15 pips later. when the averaging is working in my direction, means the 2 LONGS are now rising ill get out if i have a small profit or if i have a bigger profit (it depends on the situation)

when the LONG average is a failure, means the market continues to sink, i will add a short or two to complete the hedge. then i am trying to dig the entire position out of the hole to be breakeven.

i have a similar situation now on my hedge and decided to average;-)
trading is like dancing, don't think and just listen to the music!
  • #965
  • Nov 2, 2022 9:23am Nov 2, 2022 9:23am
Quoting birdland
lets do a random trade, because i have some time;-) hedge@1494, tp4
SHORT +4

LONG@1479 (averaging)
trading is like dancing, don't think and just listen to the music!
  • #966
  • Nov 2, 2022 9:53am Nov 2, 2022 9:53am
Quoting birdland
{quote} SHORT +4 LONG@1479 (averaging)
SHORT@1471, no tp
trading is like dancing, don't think and just listen to the music!
  • #967
  • Nov 2, 2022 9:55am Nov 2, 2022 9:55am
SHORT@1477, no tp
trading is like dancing, don't think and just listen to the music!
  • #968
  • Nov 2, 2022 10:00am Nov 2, 2022 10:00am
SHORT@1471, no tp
trading is like dancing, don't think and just listen to the music!
  • #969
  • Nov 2, 2022 10:09am Nov 2, 2022 10:09am
SHORT@1468, no tp...just going with the flow, or call it wind;-)
trading is like dancing, don't think and just listen to the music!
  • #970
  • Nov 2, 2022 10:28am Nov 2, 2022 10:28am
SHORT@1480, no tp, cancel all tp....now trying to average in the other direction;-)

5short/2long
trading is like dancing, don't think and just listen to the music!
  • #971
  • Nov 2, 2022 10:56am Nov 2, 2022 10:56am
Quoting birdland
SHORT@1480, no tp, cancel all tp....now trying to average in the other direction;-) 5short/2long
position closed. dinner time;-)

SHORT: +4 (from the original random hedge), +14, +17, +8, +5, +9
LONG: -31, -16

+10 for all (see chart)
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDM1.png Size: 31 KB
trading is like dancing, don't think and just listen to the music!
  • #972
  • Nov 2, 2022 1:41pm Nov 2, 2022 1:41pm
Don't try this live. Practice practice practice.
Attached Image (click to enlarge)
Click to Enlarge Name: screenshot.png Size: 21 KB
1.02^200
  • #973
  • Nov 2, 2022 2:08pm Nov 2, 2022 2:08pm
On topic of EA's, this how Millionnaire EA traded, 15tp on 3pip grid.
Attached Image (click to enlarge)
Click to Enlarge Name: screenshot.png Size: 36 KB
1.02^200
  • #974
  • Nov 2, 2022 6:00pm Nov 2, 2022 6:00pm
Quoting birdland
{quote} now i understand, thx. in this situation i wait 5-10 minutes, maybe the other side of the hedge hits also TP and i have 2 winners (1 hedge closed) now we could have a runaway market and the market can in 5 minutes easily make -30 pips on the LONG loss position. then i will have to short again, lets say if the long position is minus 15-20 pips. then i play safe and watch the market. but we dont know if this is a runaway market, or call it freight train. thats the problem. so i would rather try to buy again a LONG to get a good average price....
I love this thread, it's thinking out of the box. It's a nice way to trade.

I experimented it myself a lot. I trade in a similar way (but not exactly the same way) since many years on stocks mostly and some forex.

I have one thing to say : YOU NEED TO DETERMINE A CUTOFF POINT FOR RUNAWAY MARKET.

You're gonna have much less drawdown and your profit factor is gonna be a lot better if you do it.

Another important point, you don't need to hedge.... Just determine a line in the sand over wich you are long and under wich you are short..... Or juste trade long if you want, work great on stock... I am not gonna say anything more, i let you discover the rest by yourself.
You got to strike when the moment is right without thinking
  • #975
  • Nov 3, 2022 1:44am Nov 3, 2022 1:44am
Quoting Vincelev
{quote} I love this thread, it's thinking out of the box. It's a nice way to trade. I experimented it myself a lot. I trade in a similar way (but not exactly the same way) since many years on stocks mostly and some forex. I have one thing to say : YOU NEED TO DETERMINE A CUTOFF POINT FOR RUNAWAY MARKET. You're gonna have much less drawdown and your profit factor is gonna be a lot better if you do it. Another important point, you don't need to hedge.... Just determine a line in the sand over wich you are long and under wich you are short..... Or...
thank you for your valuable contribution!

good point with the cutoff point in a runaway market;-)

when you say you dont need to hedge, do you mean averaging can be enough in a losing position?
trading is like dancing, don't think and just listen to the music!
  • #976
  • Nov 3, 2022 2:19am Nov 3, 2022 2:19am
LONG/SHORT@1362, tp4
trading is like dancing, don't think and just listen to the music!
  • #977
  • Nov 3, 2022 2:23am Nov 3, 2022 2:23am
Quoting birdland
LONG/SHORT@1362, tp4
SHORT+4
trading is like dancing, don't think and just listen to the music!
  • #978
  • Nov 3, 2022 2:25am Nov 3, 2022 2:25am
SHORT@1350, no tp
trading is like dancing, don't think and just listen to the music!
  • #979
  • Nov 3, 2022 2:26am Nov 3, 2022 2:26am
SHORT@1354, no tp
trading is like dancing, don't think and just listen to the music!
  • #980
  • Nov 3, 2022 2:36am Nov 3, 2022 2:36am
closed 2 SHORTS (+16, +11) and 1 LONG (-23), one SHORT +4 at the beginning, makes +8 for the whole transaction

this was a good example of a runaway market and how to handle it;-)
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDM1.png Size: 27 KB
trading is like dancing, don't think and just listen to the music!
3 traders viewing now