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Hedging/averaging trades without prediction

  • #1,281
  • Nov 11, 2022 7:54am Nov 11, 2022 7:54am
Fight against the trend and still win
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Pip Student
  • #1,282
  • Nov 11, 2022 9:28am Nov 11, 2022 9:28am
Quoting birdland
{quote} sold all 3 LONGS for +44 (-2, +16, +30), daily pips already +100. now i trade for aprox. 1 month demo and turned 100 into more than 600, so thinking about to trade live next week. it depends how i feel;-) thank you waveski for the intellectual stimulus once again, if you make the effort to learn these techniques presented here by wave, a little tip: do it! how? just enter a random LONG/SHORT hedge with 2-5 pips TP and observe. you will learn a looooooooooooooooot. and every theoretician or academic will say "that's not...
Good effort Mr Bird!

As you know when you trade live it will feel different... I have all sorts of ways of trading averages this is an example ( I normally trade max 5% DD before I either close all at a loss or begin rebalancing the biggest loss, depends what I need to achieve at the time) but you can get the idea if you haven't thought of it already:

Really good to get your ideas on excel before you trade live... also a small edge I have is to allow a spread gap between hedge fills, sometimes they don't get filled and you get away without a hedge at the top/bottom of your averages, worth a play..

This sort of thing is what I'm talking about but it is important to create your own with formulas rather than download mine. You own your own plan
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  • #1,283
  • Nov 11, 2022 9:54am Nov 11, 2022 9:54am
Also worth mentioning, even though on here we are scalping you can trade like this using bigger gaps and TPs over months/years.

If you wanted to just trade positive swaps for the next year or so, you have everything here..
  • #1,284
  • Nov 11, 2022 2:49pm Nov 11, 2022 2:49pm
Quoting birdland
{quote} sold all 3 LONGS for +44 (-2, +16, +30), daily pips already +100. now i trade for aprox. 1 month demo and turned 100 into more than 600, so thinking about to trade live next week. it depends how i feel;-) thank you waveski for the intellectual stimulus once again, if you make the effort to learn these techniques presented here by wave, a little tip: do it! how? just enter a random LONG/SHORT hedge with 2-5 pips TP and observe. you will learn a looooooooooooooooot. and every theoretician or academic will say "that's not...
Thanks for the post ....it doesn't feel right does it, going against everything you have learnt over the years but somehow it works ....good luck going live ...
  • #1,285
  • Nov 12, 2022 2:38am Nov 12, 2022 2:38am
Quoting Fagin
Also worth mentioning, even though on here we are scalping you can trade like this using bigger gaps and TPs over months/years. If you wanted to just trade positive swaps for the next year or so, you have everything here..
"just trade positive swaps"...that sounds interesting!

I will deal with this in more detail later;-)
trading is like dancing, don't think and just listen to the music!
  • #1,286
  • Nov 12, 2022 2:42am Nov 12, 2022 2:42am
Quoting Fagin
{quote} Good effort Mr Bird! As you know when you trade live it will feel different... I have all sorts of ways of trading averages this is an example ( I normally trade max 5% DD before I either close all at a loss or begin rebalancing the biggest loss, depends what I need to achieve at the time) but you can get the idea if you haven't thought of it already: Really good to get your ideas on excel before you trade live... also a small edge I have is to allow a spread gap between hedge fills, sometimes they don't get filled and[/highlight]...
excel can be a good friend for statistics, i used to use it a lot.

the above orange sentence i dont understand. can you explain it in more detail? thx.
trading is like dancing, don't think and just listen to the music!
  • #1,287
  • Nov 12, 2022 2:46am Nov 12, 2022 2:46am
Quoting Waveskierrob
{quote} Thanks for the post ....it doesn't feel right does it, going against everything you have learnt over the years but somehow it works ....good luck going live ...
exactly, that's how i feel too!

what i also notice is that i no longer feel like analysing charts of my past trades on weekends.

this way of trading has made me freer to concentrate on the here and now.

simply magical;-)
trading is like dancing, don't think and just listen to the music!
  • #1,288
  • Nov 12, 2022 5:29am Nov 12, 2022 5:29am
Quoting birdland
{quote} excel can be a good friend for statistics, i used to use it a lot. the above orange sentence i dont understand. can you explain it in more detail? thx.
Which bit? I can’t see your highlight?
  • #1,289
  • Nov 12, 2022 5:32am Nov 12, 2022 5:32am
Quoting birdland
{quote} "just trade positive swaps"...that sounds interesting! I will deal with this in more detail later;-)
Now the rates are moving again it’s worth looking at. $3+ per day per lot selling euro against dollar.. while collecting hedge scalps
  • #1,290
  • Nov 12, 2022 8:26am Nov 12, 2022 8:26am
Quoting Fagin
{quote} Which bit? I can’t see your highlight?
ah sorry...next post ill show it
trading is like dancing, don't think and just listen to the music!
  • #1,291
  • Nov 12, 2022 8:28am Nov 12, 2022 8:28am
Quoting Fagin
{quote} also a small edge I have is to allow a spread gap between hedge fills, sometimes they don't get filled and you get away without a hedge at the top/bottom of your averages, worth a play..
that orange one i dont understand, thx.
trading is like dancing, don't think and just listen to the music!
  • #1,292
  • Nov 12, 2022 11:39am Nov 12, 2022 11:39am
Quoting birdland
{quote} that orange one i dont understand, thx.
Say you are now short with a hedge long with tp and pending short no tp: my gap is 10 pips I’ll have a pending sell limit at 10 and put the buy stop at a gap of 12 pips (if my spread is about 1 pip). Sometimes you get away without the hedge filling (often the high or low of the day).

When I get a fill on the hedge and it goes to tp I’ll then replace it with a pending order now at the same price as the sell order (no spread gap).

Of course the flip side is if your hedge doesn’t hit the TP you have to wait a bit longer to fill the extra couple of pips.

Hope this makes sense, whilst it appears a small edge if it works out you have made a gap profit on the trade which can add up to a fair amount. I did this on Thursday (edit sorry meant Wednesday) on EG, it caught the very top of the move and added significant profit to the overall trade when it reversed back down.
  • #1,293
  • Nov 12, 2022 12:50pm Nov 12, 2022 12:50pm
Quoting Fagin
{quote} Say you are now short with a hedge long with tp and pending short no tp: my gap is 10 pips I’ll have a pending sell limit at 10 and put the buy stop at a gap of 12 pips (if my spread is about 1 pip). Sometimes you get away without the hedge filling (often the high or low of the day). When I get a fill on the hedge and it goes to tp I’ll then replace it with a pending order now at the same price as the sell order (no spread gap). Of course the flip side is if your hedge doesn’t hit the TP you have to wait a bit longer to fill the extra couple...
ah i see, now i think i understand. you start to think differently and that takes a while until you understand the relations of the individual orders to each other.

what you describe I have already done intuitively, without your awareness as described above.

exciting...
trading is like dancing, don't think and just listen to the music!
  • #1,294
  • Nov 12, 2022 1:05pm Nov 12, 2022 1:05pm
Quoting birdland
{quote} ah i see, now i think i understand. you start to think differently and that takes a while until you understand the relations of the individual orders to each other. what you describe I have already done intuitively, without your awareness as described above. exciting...
Yes! Trading is now like riding a bike or flying a plane. Take it where you want and leave everyone else behind
  • #1,295
  • Nov 12, 2022 2:16pm Nov 12, 2022 2:16pm
Hi Waveskierrob,

Inspired by this thread, I understand "No hard/fixed rule, just make a profit".

So last Friday I went my way on DAX aggressively with the lowest lot limit buy & limit sell with tp 200 points. First saw the drawdown increase with less profit. Then increased tp 500 points and the drawdown remain within $200. When profit crossed $500 and tic volume is also reduced then I stopped placing orders and tried to average the floating. After a couple of hours could able close all.

My 95% of orders were limit buy & limit sell with tp. 4% were market buy & sell with same tp. Only 1% were market buy & sell without tp. But could not manage well in margin amount, at one point it increased up to 7-8 thousand dollars.

Sorry to say I used some indicators (zigzag, fractals, daily candle, open line & volume) to keep an eye on the market behavior and how far it is going. Here is the reference picture. Thanks to all.
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Kibria
  • #1,296
  • Nov 12, 2022 3:00pm Nov 12, 2022 3:00pm
Quoting randu
For whom want to try this strategy (in demo first please) here the EA (put this in "Expert" folder, not Script). source : https://www.mql5.com/en/code/14371 @Rob you could put this EA on first page if you want. R. {file} {file} {image}
Randu,

I have an idea that could help mitigate the risk associated with trading the Hedging/Averaging strategy. I call it "Averaging the Spread". Could you add the following capability to your buysell EA?:

1) Add the ability to trade 2 or more pair at the same time
2) The lot sizes (hedge ratio) for each pair will be locked so that we are effectively trading the spread of the 2 (or more pairs) instead of naked pairs. This means the lot size multiplier will maintain the multiplier ratio for each pair as we average in deep and deeper.
3) TP will close all pairs included in the spread.
4) Our goal is to "average" the losing side spread until TP
5) Trading the spread between correlated/cointegrated pairs (or group of pairs) will dramatically shrink the trading "range" as opposed to trading naked pairs.

Umberleigh
  • #1,297
  • Nov 14, 2022 10:52am Nov 14, 2022 10:52am
Not a bad for one day.

Thanks to all for showing new way of thinking.
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Kibria
  • #1,298
  • Nov 14, 2022 7:44pm Nov 14, 2022 7:44pm
Quoting Fagin
{quote} Good effort Mr Bird! As you know when you trade live it will feel different... I have all sorts of ways of trading averages this is an example ( I normally trade max 5% DD before I either close all at a loss or begin rebalancing the biggest loss, depends what I need to achieve at the time) but you can get the idea if you haven't thought of it already: Really good to get your ideas on excel before you trade live... also a small edge I have is to allow a spread gap between hedge fills, sometimes they don't get filled and you get away without...
Hey, this looks interesting, really like that way of putting the ideas into a spreadsheet and using a max %DD when things don't work out. I'm trying to get what you're writing down there but I'm having a hard time understanding it all (some columns aren't entirely clear to me), so a few questions if you don't mind and have some time

1) I get the $/% risk, but what do you mean by 'global'? Does it represent something else regarding to equity?
2) Pip TP I assume is just that, the 'regular' TP of your intitial order.
3) Is 'Hedge distance pips' the distance at which point you place your subsequent trades or something else?
4) Is 'Average trade #' the average amount of trades per "set"?
5) Then there's one last thing, as the trade # increases, you're also increasing the position size (by 0.08, 0.09, 0.12, 0.20, etc.). Does that mean every trade you're opening after the first, you're doing so with larger size?

Thanks again!
  • #1,299
  • Edited 2:20am Nov 15, 2022 2:05am | Edited 2:20am
Quoting Rfs199
{quote} Hey, this looks interesting, really like that way of putting the ideas into a spreadsheet and using a max %DD when things don't work out. I'm trying to get what you're writing down there but I'm having a hard time understanding it all (some columns aren't entirely clear to me), so a few questions if you don't mind and have some time 1) I get the $/% risk, but what do you mean by 'global'? Does it represent something else regarding to equity? 2) Pip TP I assume is just that, the 'regular' TP of your intitial order. 3) Is 'Hedge...
Hi RFS

It's pretty simple when you understand the logic. Once set up its based on an overall max drawdown for the total positions, the red boxes are for inputs only so I dont touch the rest of the spreadsheet, here is one I am working with now based on 4% overall DD:

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Answer to your questions:

1) I get the $/% risk, but what do you mean by 'global'? Does it represent something else regarding to equity?
Global is the max risk of all positions
2) Pip TP I assume is just that, the 'regular' TP of your intitial order.
Yes
3) Is 'Hedge distance pips' the distance at which point you place your subsequent trades or something else?
Yes, it's the GAP in pips for my next trade and hedge so in the sheet above I have set it to 10 pips
4) Is 'Average trade #' the average amount of trades per "set"?
Yes
5) Then there's one last thing, as the trade # increases, you're also increasing the position size (by 0.08, 0.09, 0.12, 0.20, etc.). Does that mean every trade you're opening after the first, you're doing so with larger size?
Yes but each trade has the same $% risk but a different pip amount(stop loss). All stop out at the same point as the 1st trade, in this instance trade 1 will be -110 and trade 10 would be -10 pips

I have to point out that i use this for fading "trends" and if you use this with waves method of random entries you may run out of equity before time so be careful. Having said that you can put in as many trades you need and you will be able to work out how much equity/DD you need.

This works very well when the price turns and you can trail mulitple entries from DD into profit whilst picking up the hedge profits along the way....
  • #1,300
  • Nov 15, 2022 5:53am Nov 15, 2022 5:53am
Quoting birdland
{quote} good info fagin, thx! yes shawn could have blown today. but have you watched him taking the FOMC challenge live? it was similar to today and he came out good in the end. https://www.youtube.com/watch?v=HysIBKjNbQA i think he "wobbles" or averages and hedge, always with small TPs and knows what he is doing. but would love to see new videos about him. i think he is authentic.
This youtube guy is busted if there is a bigger move. He almost lost 2.5% on his account on a 70 Pip drop. He was invested 25 of 163 lots max in peak, starting with 0.1 lot. This is a raise of 250 times of his initial position on a loss of 70 pips. That is, sorry, ridiculous. I would never lend money to this person.
I would have traded that better, no joke. If he would used a normal martingale he would have been in with less positions! So His trading at that FOMC was even worse than a normal martingale. I also saw where he made the mistakes. Anyway.

By the way, the guy is broke today as I can see . His approach was good but too greedy. He broke his financial neck because of overleverage and not sticking to his rules: get out at a certain point (or hedge). He also made mistakes in entering the trades at FOMC. And as Waveskierrob said: AVOID News time. Why? Well because of possibility of volatility in one direction! Volatility yes, but not in just one direction. Never trade with normal size news events with such an approach.

But thanks for the link, was fun to watch.
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