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Cable Update (GBPUSD)

  • #727,281
  • Feb 8, 2023 7:14am Feb 8, 2023 7:14am
Quoting knkie
{quote} Here is ChatGpt's answer. Please pay me 1 million dollars Closing out a position refers to the process of liquidating an investment, either by selling it or offsetting it with an opposing position, in order to exit a trade or reduce exposure to market risk. Hedging, on the other hand, involves taking an offsetting position in order to reduce the risk of an existing investment, without necessarily liquidating it. So while closing out a position can be a form of hedging, hedging can also be achieved without completely closing out a position....
Looks like a million dollars heading your way...US I hope...
  • #727,282
  • Feb 8, 2023 7:18am Feb 8, 2023 7:18am
Quoting knkie
{quote} Here is ChatGpt's answer. Please pay me 1 million dollars Closing out a position refers to the process of liquidating an investment, either by selling it or offsetting it with an opposing position, in order to exit a trade or reduce exposure to market risk. Hedging, on the other hand, involves taking an offsetting position in order to reduce the risk of an existing investment, without necessarily liquidating it. So while closing out a position can be a form of hedging, hedging can also be achieved without completely closing out a position....
Where exactly is the answer? The question was:

I buy 1 unit of something, and then i sell 1 unit of the exact same thing. How is this "hedging" any different from closing out a position?

and check this out:

Quoting knkie
{quote} The goal of hedging is to manage risk, while the goal of closing out a position is to exit a trade.
Kind of what i'm trying to say. When you are doing offseting trades you close out, you're not hedging. Two different things.
  • #727,283
  • Feb 8, 2023 7:18am Feb 8, 2023 7:18am
Quoting Waveskierrob
{quote} Looks like a million dollars heading your way...US I hope...
Yay
im looking at travel brochures as we speak
haha
in wondering about yourself, you forgot what you came here to be part of
  • #727,284
  • Feb 8, 2023 7:19am Feb 8, 2023 7:19am
Quoting Waveskierrob
{quote} Looks like a million dollars heading your way...US I hope...
Seriously?

YOU really believe that having 2 opposite trades open is any different than having no position at all? Ok, thanks for that
  • #727,285
  • Feb 8, 2023 7:20am Feb 8, 2023 7:20am
Good idea! And still peak at my latest post
  • #727,286
  • Feb 8, 2023 7:21am Feb 8, 2023 7:21am
Quoting knkie
{quote} Here is ChatGpt's answer. Please pay me 1 million dollars Closing out a position refers to the process of liquidating an investment, either by selling it or offsetting it with an opposing position, in order to exit a trade or reduce exposure to market risk. Hedging, on the other hand, involves taking an offsetting position in order to reduce the risk of an existing investment, without necessarily liquidating it. So while closing out a position can be a form of hedging, hedging can also be achieved without completely closing out a position....
You haven't liquidated an investment by offsetting it. You still have two transactions to settle if the investments are offset. The simple explanation is that different people/parties may hold the other side of the transactions.
  • #727,287
  • Feb 8, 2023 7:22am Feb 8, 2023 7:22am
Quoting catch22
{quote} Where exactly is the answer? The question was: I buy 1 unit of something, and then i sell 1 unit of the exact same thing. How is this "hedging" any different from closing out a position? and check this out: {quote} Kind of what i'm trying to say. When you are doing offseting trades you close out, you're not hedging. Two different things.
i literally put your question to the devine AI bot:

I buy 1 unit of something, and then i sell 1 unit of the exact same thing. How is this "hedging" any different from closing out a position?

The key difference between hedging and closing out a position is the motivation behind the trade. When you buy and then sell the exact same thing, you are effectively cancelling out your position, which is considered closing out a position. Closing out a position is used to exit a trade and eliminate exposure to market risk.
On the other hand, hedging involves taking a second offsetting position with the intention of reducing risk in an existing investment. So in a hedging scenario, you might buy 1 unit of an asset as a long-term investment, and then sell a futures contract on that same asset as a hedge against price changes. The goal of hedging is to limit potential losses, while the goal of closing out a position is to liquidate an investment.
In your example, you have closed out your position and have no remaining exposure to market risk, whereas in a hedging scenario, you would still have an ongoing investment, but with reduced market risk.


Not only are you arguing with some of the best traders on this thread, you are also taking on the AI God



I take bitcoin and also have a paypal account so just tell me how you would like to transfer the million $$
in wondering about yourself, you forgot what you came here to be part of
  • #727,288
  • Feb 8, 2023 7:23am Feb 8, 2023 7:23am
Quoting Waveskierrob
The GU ATM, SHORT 1.2095 no sl no tp
Closed SHORT 1.2060 +35 monies...
  • #727,289
  • Feb 8, 2023 7:23am Feb 8, 2023 7:23am
Quoting Waveskierrob
{quote} Loads of examples on my thread ....
Let's do it this way.

Have two accounts. One is this "hedging" account and the other one is just netting. And let's do the same trades on both accounts. In this hedge account you do your hedges and the other account has same trades but since it doesn't have hedging allowed, it just nets everything out. Show me please, that your hedging account makes more money with the same trades
  • #727,290
  • Feb 8, 2023 7:25am Feb 8, 2023 7:25am
Quoting catch22
{quote} Seriously? YOU really believe that having 2 opposite trades open is any different than having no position at all? Ok, thanks for that
Not only believe but proved it time and time again, you're welcome
  • #727,291
  • Feb 8, 2023 7:28am Feb 8, 2023 7:28am
Quoting knkie
{quote} i literally put your question to the devine AI bot: I buy 1 unit of something, and then i sell 1 unit of the exact same thing. How is this "hedging" any different from closing out a position?

The key difference between hedging and closing out a position is the motivation behind the trade. When you buy and then sell the exact same thing, you are effectively cancelling out your position, which is considered closing out a position. Closing out a position is used to exit a trade and eliminate exposure to market risk. On the other...
Wow, i'm arguing with interesting people. Can you actually read what you posted? It literally says that it's closing out a position, lol.
  • #727,292
  • Feb 8, 2023 7:28am Feb 8, 2023 7:28am
Quoting Pat Chiko
{quote} run on algo to lock better price
Can you share it publicly with us all? Or is it private?
  • #727,293
  • Feb 8, 2023 7:28am Feb 8, 2023 7:28am
Quoting catch22
{quote} Wow, i'm arguing with interesting people. Can you actually read what you posted? It literally says that it's closing out a position, lol.
wheres my money
in wondering about yourself, you forgot what you came here to be part of
  • #727,294
  • Feb 8, 2023 7:36am Feb 8, 2023 7:36am
Quoting catch22
{quote} This isn't hedging, this is LITERALLY closing out your existing position. Whoever thinks differently, please explain me HOW exactly is it different? They even say this themselves but because they don't want to accept the fact that it's just closing out a trade, they construct this sentence: "While you could just close your initial trade, and then re-enter the market later, using a hedge means you can keep your first trade on the market, and make money with a second."
Hedging is really just a method to limit your directional risk, the whole point of hedging is about reducing the net directional exposure value.
There are various ways to do achieve this, the easiest is to simply close all or part of your positions (e.g. stop loss), then there are derivatives like options that you can use, you can also achieve this by opening a trade in the opposite direction (which is essentially also a stop loss), all these methods achieve the goal of a hedge which is to limit your directional exposure .

So they are not really wrong by saying that opening a trade in the opposite direction is a hedge. The question really is if that is a good method of hedging, and I would agree with you that it is kind of a silly way to trade / hedge, since buying both directions mean paying twice the spread, and for pairs that have very low interest rate differential with low swap from the broker, you would lose more on swap too.

You normally see this being used for those that do not accept loses, they use the positions in the opposite direction to bring their net exposure to zero, locking in the unrealized loses, wait for the next entry opportunity, close their hedge positions, enter in the original direction again in the hopes that they get it right this time, so that they make a little from the hedge position, and if it really goes their way this time, their original losing position becomes break even or profitable due to cost averaging. That's the ideal, but what usually happens is that they get the second entry wrong again, and is forced to hedge again, locking in an even bigger unrealized loses, and the repeat this process until they have no more margin available and force to blown the account over one trade that they got wrong. Might as well keep it simple and just go martingale to achieve the same result.
  • #727,295
  • Feb 8, 2023 7:39am Feb 8, 2023 7:39am
Quoting catch22
{quote}

Attached Image (click to enlarge)
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in wondering about yourself, you forgot what you came here to be part of
  • #727,296
  • Feb 8, 2023 7:39am Feb 8, 2023 7:39am
I'm a keen gardener if anyone wants there Hedges done?
  • #727,297
  • Feb 8, 2023 7:39am Feb 8, 2023 7:39am
Quoting Han2019
{quote} Hedging is really just a method to limit your directional risk, the whole point of hedging is about reducing the net directional exposure value. There are various ways to do achieve this, the easiest is to simply close all or part of your positions (e.g. stop loss), then there are derivatives like options that you can use, you can also achieve this by opening a trade in the opposite direction (which is essentially also a stop loss), all these methods achieve the goal of a hedge which is to limit your directional exposure . So they are not...
$1,000,000 hedging your way...
  • #727,298
  • Feb 8, 2023 7:40am Feb 8, 2023 7:40am
order block indicator , looks good
Attached Image (click to enlarge)
Click to Enlarge Name: dx1.png Size: 18 KB
yes yes yes
  • #727,299
  • Feb 8, 2023 7:46am Feb 8, 2023 7:46am
Quoting Han2019
{quote} Hedging is really just a method to limit your directional risk, the whole point of hedging is about reducing the net directional exposure value. There are various ways to do achieve this, the easiest is to simply close all or part of your positions (e.g. stop loss), then there are derivatives like options that you can use, you can also achieve this by opening a trade in the opposite direction (which is essentially also a stop loss), all these methods achieve the goal of a hedge which is to limit your directional exposure. So they are not...
THANK YOU!

Can't say any better than that.

And yes, they can call it a hedge all they want if it makes them feel any better. The real reason for doing this is exactly what you said - fear of realizing a loss.
  • #727,300
  • Feb 8, 2023 7:47am Feb 8, 2023 7:47am
Quoting Waveskierrob
{quote} $1,000,000 hedging your way...
are you on drugs?
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