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Hedging/averaging trades without prediction

  • #1,021
  • Nov 4, 2022 5:58am Nov 4, 2022 5:58am
LONG@1257, no tp
trading is like dancing, don't think and just listen to the music!
  • #1,022
  • Nov 4, 2022 5:59am Nov 4, 2022 5:59am
LONG@1265, no tp
trading is like dancing, don't think and just listen to the music!
  • #1,023
  • Nov 4, 2022 6:01am Nov 4, 2022 6:01am
LONG@1259, no tp
trading is like dancing, don't think and just listen to the music!
  • #1,024
  • Nov 4, 2022 6:04am Nov 4, 2022 6:04am
LONG@1274, no tp
trading is like dancing, don't think and just listen to the music!
  • #1,025
  • Nov 4, 2022 6:18am Nov 4, 2022 6:18am
Quoting birdland
{quote} change to tp5, and i will later come back after NFP to try to close the hedge
done! a lot of averaging up and down...

the transaction was again successful, good for +24 pips, makes +51 for the day.
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDM1.png Size: 25 KB
trading is like dancing, don't think and just listen to the music!
  • #1,026
  • Nov 4, 2022 6:52am Nov 4, 2022 6:52am
Quoting birdland
{quote} done! a lot of averaging up and down... the transaction was again successful, good for +24 pips, makes +51 for the day. {image}
Excellent, I also begin to add an extra hedge after maybe 4 or 5 average entries, so it kind of vibrates at the top of the move before it corrects down (in an up move) and zero's out the average, (so if it is going up and my hedges have closed out at previous TP levels on the 4th or 5 th I'll add an extra and close it out at the tp). I'll also hold out for a net positive to cover costs plus one position on the average. Hope that makes sense? ADR is your friend as well as a pip counter.
  • #1,027
  • Nov 4, 2022 7:27am Nov 4, 2022 7:27am
I'm having some trouble regarding the first hedges. Not sure how to get them out of the hole (without doubling). This might be hard to explain but I'll try with an example that happened yesterday and again today

Assume the set starts with a long and a short at the same price, both with a 5 pip TP.

Price runs 15 pips to the long; so the long hit tp, and the short is -10.

Now, if I place another long, the position is effectively 'frozen'. So there's 10 pips I need to overcome, all good.

Then, price keeps moving up, so we add another long (5 pips above the last long). We now have 1 short, and 2 longs (average between them 12 pips apart).

So, for the position to get to at least breakeven it should move another 10 pips to the long. And if it reverses, I'd need to hedge again and I'd need to overcome that one, which would require a larger move (which also means asking more from the market which might not happen).

I'm not a naysayer, I know it works. Just want to understand how the process of getting the positions from being underwater works . Or am I missing something where we need to double or start stacking or something (but wouldn't that get dangerous very quick)?
  • #1,028
  • Nov 4, 2022 8:03am Nov 4, 2022 8:03am
Quoting Rfs199
I'm having some trouble regarding the first hedges. Not sure how to get them out of the hole (without doubling). This might be hard to explain but I'll try with an example that happened yesterday and again today Assume the set starts with a long and a short at the same price, both with a 5 pip TP. Price runs 15 pips to the long; so the long hit tp, and the short is -10. Now, if I place another long, the position is effectively 'frozen'. So there's 10 pips I need to overcome, all good. Then, price keeps moving up, so we add another...
"Then, price keeps moving up, so we add another long (5 pips above the last long). We now have 1 short, and 2 longs (average between them 12 pips apart)."

..if any you have 2 SHORTS and 1 LONG
  • #1,029
  • Nov 4, 2022 8:03am Nov 4, 2022 8:03am
Quoting Rfs199
I'm having some trouble regarding the first hedges. Not sure how to get them out of the hole (without doubling). This might be hard to explain but I'll try with an example that happened yesterday and again today Assume the set starts with a long and a short at the same price, both with a 5 pip TP. Price runs 15 pips to the long; so the long hit tp, and the short is -10. Now, if I place another long, the position is effectively 'frozen'. So there's 10 pips I need to overcome, all good. Then, price keeps moving up, so we add another...
I would add in both long and short as it goes up, taking profits on the longs until there is one left at the top, then close out our after price begins to drop at a nett +5 on the shorts... be creative with it
  • #1,030
  • Nov 4, 2022 8:04am Nov 4, 2022 8:04am
Quoting birdland
{quote} done! a lot of averaging up and down... the transaction was again successful, good for +24 pips, makes +51 for the day. {image}
Hmm, looking at this one maybe the trick is in adding to get the whole thing to a positive position within a smaller move.
Do you guys look at ATR or something to have a better understanding of how much to add to get to some sort of expected move?

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  • #1,031
  • Nov 4, 2022 8:07am Nov 4, 2022 8:07am
Quoting Fagin
{quote} I would add in both long and short as it goes up, taking profits on the longs until there is one left at the top, then close out our after price begins to drop at a nett +5 on the shorts... be creative with it
Ah that makes sense! I'll keep testing like that to see how it plays out

(Thanks for the replies everyone, it helps! )
  • #1,032
  • Nov 4, 2022 8:15am Nov 4, 2022 8:15am
Quoting Rfs199
{quote} Ah that makes sense! I'll keep testing like that to see how it plays out (Thanks for the replies everyone, it helps! )
No probs, keep practicing and it will click.
  • #1,033
  • Nov 4, 2022 8:33am Nov 4, 2022 8:33am
Quoting Fagin
{quote} No probs, keep practicing and it will click.
thats the main point. we are in an academic world or better, the academics want to to rule the world. but in the end the practitioners are superior to the theorists and find the solution.
trading is like dancing, don't think and just listen to the music!
  • #1,034
  • Nov 4, 2022 8:38am Nov 4, 2022 8:38am
Quoting birdland
{quote} thats the main point. we are in an academic world or better, the academics want to to rule the world. but in the end the practitioners are superior to the theorists and find the solution.
100%
  • #1,035
  • Nov 4, 2022 8:38am Nov 4, 2022 8:38am
TRADE 51 ....FTSE SHORT and LONG @ 7340 no sl +3tp
  • #1,036
  • Nov 4, 2022 8:39am Nov 4, 2022 8:39am
Quoting Waveskierrob
TRADE 51 ....FTSE SHORT and LONG @ 7340 no sl +3tp
SHORT tp hit + 3
  • #1,037
  • Nov 4, 2022 8:40am Nov 4, 2022 8:40am
Quoting Waveskierrob
{quote} SHORT tp hit + 3
now just waiting a while to see if LONG tp get hit
  • #1,038
  • Nov 4, 2022 8:52am Nov 4, 2022 8:52am
Quoting Waveskierrob
{quote} now just waiting a while to see if LONG tp get hit
ok left it a while price going against my LONG so will place LONG @ 7323 and a pending SHORT @ 7318
  • #1,039
  • Nov 4, 2022 8:53am Nov 4, 2022 8:53am
Quoting Waveskierrob
{quote} ok left it a while price going against my LONG so will place LONG @ 7323 and a pending SHORT @ 7318
LONG no sl no tp and pending SHORT no sl tp+3
  • #1,040
  • Nov 4, 2022 8:57am Nov 4, 2022 8:57am
Quoting Waveskierrob
{quote} LONG no sl no tp and pending SHORT no sl tp+3
Closed 2 x LONGS @ 7327 + 4, -3 = +1...cancelled pending SHORT
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