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Hedging/averaging trades without prediction

  • #2,741
  • Apr 1, 2024 11:48am Apr 1, 2024 11:48am
Quoting jimsxxl
{quote} hello Lazy! when i say ”alot of strategies” - its spread over ~10years If my bankroll is big enough? I dont know i need to backtest. I just wonder if you guys working with the same ”framework”, or are you trading totally different ? the strategy im testing atm (demo), is trading way too frequently i think, drawdown is too big ($1000 account).
Hi Jim, +/- 10 years is probably enough time to work out most of the silly mistakes and mind traps we've all suffered from, not necessarily though . In my opinion backtesting is fine to a point but any rigidity to your approach may be detrimental in the long run (counter-intuitive I know). You sound like you have a handle on things when you say your current strategy produces an uncomfortable level of DD. It is vital to cut and move on at the first sign of trouble in any trading framework, no matter how profitable it appears in a given timeframe, or find a way to overcome the problem. If I only had a $1000 bankroll I would need a broker that offered $0.01 position sizes @ 30:1 or better margin, I'm no expert on all the margin maths but I need £30 available margin for every 0.01p trade I open.

I would say many on the thread share a similar mindset but the trading styles probably differ quite a bit. I currently only trade positive swap pairs, as I like to get paid on my overnight positions, and for weeks now I've been averaging in to (shorting) EURUSD & USDMXN. At the moment these two are negatively correlated pretty well so I'll maintain a pretty flat hedge and just favour the pair that's shorting the best. When one pair pulls away I'll either TP or add to the hedge then wait, some trades I'll close in minutes, others may take days. With positive swap I get paid more as the position grows, I might close at a small loss if I don't like the look of it (very rare), or wait until the swap out-performs the loss.

Other pairs pay positive swap but I prefer red to green at the mo, hope it helps.
Sounds like a lot of screen time to me.
  • #2,742
  • Apr 1, 2024 12:18pm Apr 1, 2024 12:18pm
Quoting Waveskierrob
{quote} "Rob's patience is probably only limited by his life expectancy"...brilliant line...
"Hedge hard or die trying"
Sounds like a lot of screen time to me.
  • #2,743
  • Apr 1, 2024 1:44pm Apr 1, 2024 1:44pm
Quoting LazyTrades
{quote} Hi Jim, +/- 10 years is probably enough time to work out most of the silly mistakes and mind traps we've all suffered from, not necessarily though . In my opinion backtesting is fine to a point but any rigidity to your approach may be detrimental in the long run (counter-intuitive I know). You sound like you have a handle on things when you say your current strategy produces an uncomfortable level of DD. It is vital to cut and move on at the first sign of trouble in any trading framework, no matter how profitable it appears...
Thanks Lazy!
I will continue to work on my strat, until im comfy enough with the risk.
Like i said, happy that i found this thread to maybe share some thoughts with someone else than my own head
  • #2,744
  • Apr 1, 2024 1:46pm Apr 1, 2024 1:46pm
Quoting jimsxxl
{quote} Thanks Lazy! I will continue to work on my strat, until im comfy enough with the risk. Like i said, happy that i found this thread to maybe share some thoughts with someone else than my own head
No problem, we are all learning here.
Sounds like a lot of screen time to me.
  • #2,745
  • Apr 2, 2024 3:32pm Apr 2, 2024 3:32pm
Good evening gentlemen, little update on my experiments. The hedge EA had a long time in DD, then just today closed for 1k profit the month. Doomed to fail? Let's see when

The average EA instead took a hit during the last FOMC, but is already recovering. Sure, in a real account I would have opted to close the EA during the FOMC, but since it is an experiment, it must be put under stress.
Cheers
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  • #2,746
  • Apr 3, 2024 3:01pm Apr 3, 2024 3:01pm
Whilst the EA has had a good today, my USDMXN and EURUSD live trades have generated my first 2% DD scenario, have closed all the UM shorts in profit (1%) and will now send in the rescue troops. These guys are very patient and are going to use EURJPY to do their dirty work if necessary. In all seriousness, wanted to post on the days/weeks when things go against me and will update on the progress.
Sounds like a lot of screen time to me.
  • #2,747
  • Apr 5, 2024 1:21am Apr 5, 2024 1:21am
Quoting Thomas.
{quote} I like your mindset and your longterm approach, i View it very simular, i See your point. But honestly 1% a week is not impressive. For example i have closed every single trading day profitable since the 20th December 2023. Out of those 68x trading days, 13x where above 1% gain for the day. There are Advantages to building a profit Buffer and only using those profits to make more profits with no risk on the actuall own deposit (balance). This is calculated, you can see the slow and safe start and then bigger and bigger gains from there....
great result Thomas!

now i have a question: do you enter your trades randomly or do you use a certain technique like price action, chart technique or indicators?



to the others: i hardly write here anymore but i read along attentively, interested and quietly.

the main reason is that i always use a technical signal for my trading decisions.

and that would actually be off-topic in this thread;-)
trading is like dancing, don't think and just listen to the music!
  • #2,748
  • Apr 5, 2024 6:25am Apr 5, 2024 6:25am
Quoting birdland
{quote} great result Thomas! now i have a question: do you enter your trades randomly or do you use a certain technique like price action, chart technique or indicators? to the others: i hardly write here anymore but i read along attentively, interested and quietly. the main reason is that i always use a technical signal for my trading decisions. and that would actually be off-topic in this thread;-)

Thanks, no i dont enter my trades randomly and the trade managememt is not random as well.
I Call it Vix and dxy cycles, based on those cycles i create a higher timeframe bias for my trades on US indicies.
Even my trade management is variable based on each setup (vix cycle). For example if im 1lot short and i notice im too early, i Cover it with 0.70x long, i reduce drawdown, but i still have 0.30lot net short exposure, Menaing even if price falls, i come out profitable, if price goes agains me i can close the 0.70lot buy from a higher price and Open up my short exposure again From higher better prices.
This is price averaging without adding into the trade, i dont add risk, i cut net short exposure and Open it up at better prices while taking a profit for the buy side, which allowes me to take a small loss on the sell side and still come out overall profitable.

In terms of my entrys, i use price action, quarter Levels and even just a stochastic too, but in the end my entrys are strongly based on the vix and dxy cycle. I have about 76-77% winnrate and my average risk reward ratio is close to 1:1 (2.72 profit factor).

My profitability comes more from my trade Management, i would say thats a bigger part.
But still the entry quality is Key to Not have to average trades up and risk some drawdowns.
To increase my profitability from here, i have to work more on entry quality, getting my winnrate up towards 80%
1k to 100k Copy Trading All Time Return: 367.9%
  • #2,749
  • Edited 3:16pm Apr 5, 2024 2:20pm | Edited 3:16pm
Quote: "My live swap/hedge trading is just ahead (in % wise) per week over the EA, which is obviously a good thing, and so far is yet to have a losing week overall, although this has to happen sooner or later."

See what happens when you make predictions (3 weeks ago), so this has been the first losing week in 11 with a -2% floating DD (not closed yet so not a loss in my book). Live trading 2 pair (EU & EJ) with positive swap -2.09% this week, so after 11 weeks +6.39% profit. Fully auto EA had a positive week so after 23 weeks +16.09%. Have a good weekened all.
Sounds like a lot of screen time to me.
  • #2,750
  • Apr 5, 2024 2:58pm Apr 5, 2024 2:58pm
Great EA
MQA Approved FX Trainer -
  • #2,751
  • Apr 6, 2024 3:14am Apr 6, 2024 3:14am
Quoting Thomas.
{quote} Thanks, no i dont enter my trades randomly and the trade managememt is not random as well. I Call it Vix and dxy cycles, based on those cycles i create a higher timeframe bias for my trades on US indicies. Even my trade management is variable based on each setup (vix cycle). For example if im 1lot short and i notice im too early, i Cover it with 0.70x long, i reduce drawdown, but i still have 0.30lot net short exposure, Menaing even if price falls, i come out profitable, if price goes agains me i can close the 0.70lot buy from a higher price...

very interesting, i have similar figures: my profit factor is 3.50, the risk/reward ratio is also 1:1 and the win rate is 76%.

my target is 2% per day or 10% per week and that's what i get.
so i accept large DD of 30% or more.
and since i also assume that i will get a margin call, i keep siphoning off money.

but of course i do this full time, so i invest a few hours a day.

and as i said before i also use techniques like support&resistance and everything i have learnt in the last years.

the longest trade so far has lasted 3 days, then a hedge or an accumulated average chain is closed.

so far i have only traded GU and recently added EU because it is very similar and there is hardly any slippage.

it's also interesting that you use different lot sizes for hedging. that's new to me, or rather i tend to mix things up and that's why all positions have the same size.



one thing i wanted to ask you: what software do you use to display the track record? i always enter everything in an excell list, which is a bit tedious.

and what i wanted to ask you, how do you deal with your current DD, which can be seen on your explorer?
trading is like dancing, don't think and just listen to the music!
  • #2,752
  • Apr 6, 2024 5:14am Apr 6, 2024 5:14am
Quoting LazyTrades
Quote: "My live swap/hedge trading is just ahead (in % wise) per week over the EA, which is obviously a good thing, and so far is yet to have a losing week overall, although this has to happen sooner or later." See what happens when you make predictions (3 weeks ago), so this has been the first losing week in 11 with a -2% floating DD (not closed yet so not a loss in my book). Live trading 2 pair (EU & EJ) with positive swap -2.09% this week, so after 11 weeks +6.39% profit. Fully auto EA had a positive week so after 23 weeks +16.09%....
Same here, down over £400 this week, funny that we both have the same losing week after so many profitable ones, we both trade different pairs at different times in different directions, something to think about...
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  • #2,753
  • Apr 6, 2024 6:30am Apr 6, 2024 6:30am
Quoting Waveskierrob
{quote} Same here, down over £400 this week, funny that we both have the same losing week after so many profitable ones, we both trade different pairs at different times in different directions, something to think about... {image}
Hi pal, you should try the ftse dividend trade every Wednesday @4.29 and 55seconds... If you want me to explain it let me know. its like having your own atm
  • #2,754
  • Apr 6, 2024 6:50am Apr 6, 2024 6:50am
Quoting T721
{quote} Hi pal, you should try the ftse dividend trade every Wednesday @4.29 and 55seconds... If you want me to explain it let me know. its like having your own atm
Please feel free to explain, anything that makes money, I've learnt over the years to have many different trading ideas running at the same time with different accounts, that way you don't put all your eggs in one basket...
  • #2,755
  • Apr 6, 2024 7:08am Apr 6, 2024 7:08am
Quoting Waveskierrob
{quote} Please feel free to explain, anything that makes money, I've learnt over the years to have many different trading ideas running at the same time with different accounts, that way you don't put all your eggs in one basket...
Ok, every Wednesday the FTSE has a dividend, you need to go to a 3min timeframe to spot the drop. Depending on the dividend which can be 6points to 30points. Dividend will be posted from the Monday session - go to IG community and you will see the dividend there. This is an easy money trade.

So, let me give you an example ------ lets say the dividend is 10points. at exactly 4.29 and 55 seconds (no later or you will miss it) You buy ftse .

Now at exactly 4.30pm and 1second your buy position will be minus 10points x your size. So lets say you bought ftse @£10 your trade will be minus £100
But you get £100 directly paid into your account within 30seconds ish. Then you buy again @£10 and hold till the gap fills. Its easy money

Go look at the last 8 - 12 Wednesdays any use a 3min tf or 1min then you will see how it works

2 examples for ya These really are bread and butter trades. NB---- if the dividend is big ie 20points or more sometimes it wont fill till next day
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  • #2,756
  • Apr 6, 2024 7:11am Apr 6, 2024 7:11am
the timing of this trade is very important. YOU MUST BUY @4.29pm and 50-55 seconds or you will miss it
  • #2,757
  • Apr 6, 2024 7:14am Apr 6, 2024 7:14am
Quoting Waveskierrob
{quote} Please feel free to explain, anything that makes money, I've learnt over the years to have many different trading ideas running at the same time with different accounts, that way you don't put all your eggs in one basket...
Just try it at £1 then add after it drops. Practice for a month or two
  • #2,758
  • Apr 6, 2024 7:27am Apr 6, 2024 7:27am
One more example for you guys --- this is from 28th Feb this year
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  • #2,759
  • Apr 6, 2024 7:28am Apr 6, 2024 7:28am
Quoting T721
{quote} Ok, every Wednesday the FTSE has a dividend, you need to go to a 3min timeframe to spot the drop. Depending on the dividend which can be 6points to 30points. Dividend will be posted from the Monday session - go to IG community and you will see the dividend there. This is an easy money trade. So, let me give you an example ------ lets say the dividend is 10points. at exactly 4.29 and 55 seconds (no later or you will miss it) You buy ftse . Now at exactly 4.30pm and 1second your buy position will be minus 10points x your size. So lets say...
Excellent, where on the IG community can you find the dividend and will the dividend always be between 6 and 30 points...
  • #2,760
  • Apr 6, 2024 7:32am Apr 6, 2024 7:32am
Quoting Waveskierrob
{quote} Excellent, where on the IG community can you find the dividend and will the dividend always be between 6 and 30 points...
No worries just found it...
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