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Hedging/averaging trades without prediction

  • #1,561
  • Dec 11, 2022 4:05pm Dec 11, 2022 4:05pm
Quoting Waveskierrob
{quote} You don't have to go LONG and SHORT at the same time, you can pick a direction or just flip a coin, then if trade goes into loss use hedging and averaging to get back in to profit
yeah I’m gona give this a go on demo, cheers.

I’m a very active trader so I will post up my results after a week on demo.
  • #1,562
  • Dec 11, 2022 4:10pm Dec 11, 2022 4:10pm
Quoting dantpm
{quote} If your hedging transaction is a limit order that gets entered into if the market reverses it essentially permits you a stop loss that won't get stop hunted thus essentially protecting the original trade. In this case the market reverses from the stop hunt and the profitable trade that you would not have otherwise had appears !
yes, I like the idea of avoiding those unnecessary losses and have thought about doing this before , it’s just I can tell I will need practise at incorporating this and learning how to survive if a trade trends away from me.

but I suppose if your hedged, and your primary trade is losing badly, the hedge “stoploss” trade could added to at critical points to actually ‘capture’ a profit.


damn you guys! Just when I thought my plan/system was complete

thanks for the comments I’ll be looking into this.
  • #1,563
  • Dec 11, 2022 4:15pm Dec 11, 2022 4:15pm
Quoting PippityPips
{quote} yes, I like the idea of avoiding those unnecessary losses and have thought about doing this before , it’s just I can tell I will need practise at incorporating this and learning how to survive if a trade trends away from me. but I suppose if your hedged, and your primary trade is losing badly, the hedge “stoploss” trade could added to at critical points to actually ‘capture’ a profit. damn you guys! Just when I thought my plan/system was complete thanks for the comments I’ll be looking into this.
That is just great mate! Being an eternal learner has helped me incredibly. No matter what, we end up discovering new things as we try new things. Hedging experiments might even lead to something completely different.

Love to run into such open minds ! Cheers and good luck in your new adventure !
If I don't mention SL and/or TP = longer-term setup possibly in the works!
  • #1,564
  • Edited 5:32pm Dec 11, 2022 4:15pm | Edited 5:32pm
Quoting PippityPips
{quote} yes, I like the idea of avoiding those unnecessary losses and have thought about doing this before , it’s just I can tell I will need practise at incorporating this and learning how to survive if a trade trends away from me. but I suppose if your hedged, and your primary trade is losing badly, the hedge “stoploss” trade could added to at critical points to actually ‘capture’ a profit. damn you guys! Just when I thought my plan/system was complete thanks for the comments I’ll be looking into this.
Hence my comment that an EA that entered a trailed limit order as a hedge would be extremely useful!
  • #1,565
  • Dec 11, 2022 5:29pm Dec 11, 2022 5:29pm
Quoting mtako
{quote} That is just great mate! Being an eternal learner has helped me incredibly. No matter what, we end up discovering new things as we try new things. Hedging experiments might even lead to something completely different. Love to run into such open minds ! Cheers and good luck in your new adventure !
I wish the markets were easy enough for traders to not need constant improvement…. Until that day, and until I have enough capital to retire, I will be a student of the markets
  • #1,566
  • Dec 11, 2022 7:50pm Dec 11, 2022 7:50pm
Quoting dantpm
{quote} Hence my comment that an EA that entered a trailed limit order as a hedge would be extremely useful!
Could you explain what you require a bit more in detail? Perhaps I can whip up something. Not an expert coder but I get by.
Leave the Gun, Take the Armani
  • #1,567
  • Dec 11, 2022 11:51pm Dec 11, 2022 11:51pm
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Here is an example of creating + gaps. Even though my current position has a - gap, I am still in overall profit...
  • #1,568
  • Dec 12, 2022 1:29am Dec 12, 2022 1:29am
Quoting Agro
{quote} Hey mate I have also landed on 1:1 leverage as a comfortable level. Even then though, I feel a little uncomfortable when the price runs a long way against me and I don't get enough hedges on along the way. I think this comes from averaging too close and too frequently though. The way I combat this is by making my average positions further and further out as the price goes against me (obviously this has its drawbacks though). Maybe though my uncomfortableness also comes from many years of risking very small amounts compared to my balance....
unfortunately, it doesn't always work out that i have no more positions at the end of the day, but in principle it is the goal.

i have also learned not to start averaging too early. i try to get as many trades in TP as possible and then start what i call "collecting the bad trades" in the second half of the day. but i have a tendency to take more and more time with this, the bigger the bank account is and the smaller the leverage.
trading is like dancing, don't think and just listen to the music!
  • #1,569
  • Dec 12, 2022 1:42am Dec 12, 2022 1:42am
Quoting Waveskierrob
{quote} Birdland and myself open with LONG and SHORT, although Ithink Bird is now using a different style ...
I have been using heding instead of SL in my old trading for a while and that is an improvement.

i have learned a lot here for my trading, but i don't want to throw what worked well before into the rubbish. but maybe i will go back to hedging@averaging. i am testing...

the markets are increasingly flooded with artificial intelligence, which will not remain without traces and will once again have a lasting effect on price movements, as it did with the advent of internet trading.
when i started trading, i had to call someone and he called the stock exchange and after 30-60 seconds i had a fill.
trading is like dancing, don't think and just listen to the music!
  • #1,570
  • Dec 12, 2022 1:45am Dec 12, 2022 1:45am
Quoting Mr.Moe
{quote} I start around Frankfurt open. Trigger my trades and have an initial TP of 5 pips, no SL. When my TP gets hit I enter a new position in that direction, again with 5 pip TP. Depending on how far the other position is in DD I then mostly start to enter a average trade. Mostly when it ist around 15 to 20 Pips minus. I want to be pretty much out of the market around noon and thats where my average party starts. Mostly around that time, my pairs start to range and I dry to load as much average trades up I need to end the session green. Of course...
good description of everyday work when you combine heding&averaging;-)
trading is like dancing, don't think and just listen to the music!
  • #1,571
  • Dec 12, 2022 3:00am Dec 12, 2022 3:00am
Quoting birdland
{quote} good description of everyday work when you combine heding&averaging;-)
what do you do when your loser is caught in a trend day? And just keeps getting worse and worse, you average and your position is deeper and deeper…then what? Blown account? Or would you hedge again the other direction, take some more 5 pips and wait and hope for reversal?

this all sounds good but I can’t help but think averaging losers all day will eventually lead to a blown account.

ps, good luck with the week fellas! I love Monday trading.
  • #1,572
  • Dec 12, 2022 3:19am Dec 12, 2022 3:19am
Quoting PippityPips
{quote} what do you do when your loser is caught in a trend day? And just keeps getting worse and worse, you average and your position is deeper and deeper…then what? Blown account? Or would you hedge again the other direction, take some more 5 pips and wait and hope for reversal? this all sounds good but I can’t help but think averaging losers all day will eventually lead to a blown account. ps, good luck with the week fellas! I love Monday trading.
you can also average up if the market is running away.
trading is like dancing, don't think and just listen to the music!
  • #1,573
  • Dec 12, 2022 4:35am Dec 12, 2022 4:35am
Quoting PippityPips
{quote} what do you do when your loser is caught in a trend day? And just keeps getting worse and worse, you average and your position is deeper and deeper…then what? Blown account? Or would you hedge again the other direction, take some more 5 pips and wait and hope for reversal? this all sounds good but I can’t help but think averaging losers all day will eventually lead to a blown account. ps, good luck with the week fellas! I love Monday trading.
You can only convince yourself by trying it out on demo
  • #1,574
  • Dec 12, 2022 1:26pm Dec 12, 2022 1:26pm
Quoting Waveskierrob
{quote} You can only convince yourself by trying it out on demo
yeah I tried this on demo this morning but didn’t go well

managed to scalp a few wins at first then the market went against me, started to whip, not good times.
The main issue I found was let’s say I was long and short, my long would hit tp, then my short would be in negative, and wouldn’t come back, then I had three options: either take a loss, hope it comes back or average.
the problem I see here is both of the last two options could potentially wipe my account, unless I take another hedge, but by this stage I was pretty in the red!


tbf I’ve never done this before and it seems it certainly takes alot of skill. On the face of it you think, “ how hard is taking 5pips each way” …actually quiet hard

I’ve just spent the best of the last two years refining my strategy. I’m starting to see progress so I’m not going to switch to this right now as my strategy. Just great to play around with new ideas.
  • #1,575
  • Dec 12, 2022 3:09pm Dec 12, 2022 3:09pm
Quoting PippityPips
{quote} yeah I tried this on demo this morning but didn’t go well managed to scalp a few wins at first then the market went against me, started to whip, not good times. The main issue I found was let’s say I was long and short, my long would hit tp, then my short would be in negative, and wouldn’t come back, then I had three options: either take a loss, hope it comes back or average. the problem I see here is both of the last two options could potentially wipe my account, unless I take another hedge, but by this stage I was pretty in the red!...
I did say at the start of the thread that it wasn't easy and wasn't for everyone, would say demo it for atleast a month maybe you might get something from it
  • #1,576
  • Dec 12, 2022 3:37pm Dec 12, 2022 3:37pm
Quoting Waveskierrob
{quote} I did say at the start of the thread that it wasn't easy and wasn't for everyone, would say demo it for atleast a month maybe you might get something from it

absolutely. been doing this long enough to know the intricacies involved in developing a strategy. i will probably be tinkering with this for much more than a month.
As i say, most of time is spent executing something i know works. but this also serves as a welcome 'break' from the stress of live trading.
its nice to 'play' with ideas under no pressure. ive never used a demo account in all these years... i prefer to lose real money lol

i will report back in due course!
  • #1,577
  • Edited 7:46pm Dec 12, 2022 7:32pm | Edited 7:46pm
evening update... as of 8:30pm, EST... did pick up +50 TP from GBPUSD buy...

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  • #1,578
  • Dec 12, 2022 7:45pm Dec 12, 2022 7:45pm
Quoting sampat
{quote}...Market will find way to move what ever direction it wants.....no body knows much.

Indeed!

Favorite FF quote:

"Then one day I came to understand my folly - price doesn't know nor does it care anything about my mathematical ability or my gift of creativity. It will move where it wants to move..." — Warburg (FF member)
  • #1,579
  • Dec 13, 2022 1:37am Dec 13, 2022 1:37am
Not exactly random. But it's still Hedging and Averaging both Pro-Trend and Counter-Trend.
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Leave the Gun, Take the Armani
  • #1,580
  • Dec 13, 2022 2:15am Dec 13, 2022 2:15am
Flat. That was pretty tiring.
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Leave the Gun, Take the Armani
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