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Hedging/averaging trades without prediction

  • #2,761
  • Apr 6, 2024 7:37am Apr 6, 2024 7:37am
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...
Hi pal, Dividend is poste in IG community and should be there on Mondays latest Tue.... Sometime the dividennd is only 1 - 2points so not worth taking.... but anything 4points and above is better.

PS, i trade the dividend @£500 per point and i add more on the drop ----- So the most important thing here is your size. Lets say the Dividend is 20points or more. If you went Ballsdeep with size could you sleep like a baby all night if it didnt fill till next day. So size is important and so is your add positions
  • #2,762
  • Apr 6, 2024 7:42am Apr 6, 2024 7:42am
Hope i explained it well enough for you all. Just go back for 6months or more and you will see how effective it is
  • #2,763
  • Apr 6, 2024 7:52am Apr 6, 2024 7:52am
This ones from May last year
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  • #2,764
  • Edited 8:30am Apr 6, 2024 8:09am | Edited 8:30am
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}
I guess it's probably when we have those weeks when the markets do something incongruous, I always try to remember they normally return to normal shortly afterwards, regression to the mean.

For me I think it was the EUR news which threw the correlation sync out temporarily, I suppose it's just one of the risks we take and have a 50/50 chance of being on the wrong/right side, DD was still relatively small and I've recovered around half of it already. I remember losing a chunk one day some time ago but all I had to do was apply some patience and all turned out well. I'm focused more on keeping any DD to a minimum these days, and scaling up, rather than stellar performance in the short term. Both would be nice though.
Sounds like a lot of screen time to me.
  • #2,765
  • Apr 6, 2024 8:48am Apr 6, 2024 8:48am
Quoting LazyTrades
{quote} I guess it's probably when we have those weeks when the markets do something incongruous, I always try to remember they normally return to normal shortly afterwards, regression to the mean. For me I think it was the EUR news which threw the correlation sync out temporarily, I suppose it's just one of the risks we take and have a 50/50 chance of being on the wrong/right side, DD was still relatively small and I've recovered around half of it already. I remember losing a chunk one day some time ago but all I had to do was apply some patience...
Low DD is my aim, markets are like the tide " in and out", close for profit when in and hold and apply patience went out...
  • #2,766
  • Apr 6, 2024 9:10am Apr 6, 2024 9:10am
Quoting T721
Hope i explained it well enough for you all. Just go back for 6months or more and you will see how effective it is
One more thing, will this work with "spread betting" accounts?, cheers ...
  • #2,767
  • Apr 6, 2024 10:45am Apr 6, 2024 10:45am
Quoting Waveskierrob
{quote} One more thing, will this work with "spread betting" accounts?, cheers ...
Perfect for spread bet
  • #2,768
  • Apr 6, 2024 10:49am Apr 6, 2024 10:49am
Quoting T721
{quote} Perfect for spread bet
FANTASTIC....hopefully another little weapon to add to my arsenal to beat the markets...
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  • #2,769
  • Apr 6, 2024 11:09am Apr 6, 2024 11:09am
Quoting Waveskierrob
{quote} FANTASTIC....hopefully another little weapon to add to my arsenal to beat the markets... {image}
I have 6 friends who only ever trade the ftse dividend and make a helluva good living from that trade alone. They never trade anything else and have no idea how to trade. I showed them the dividend trade around 7yrs ago and they have never looked back
  • #2,770
  • Apr 6, 2024 12:13pm Apr 6, 2024 12:13pm
Quoting T721
{quote} I have 6 friends who only ever trade the ftse dividend and make a helluva good living from that trade alone. They never trade anything else and have no idea how to trade. I showed them the dividend trade around 7yrs ago and they have never looked back
I've been trying to undo all my trading knowledge for years now, ignorance is my best indicator...
  • #2,771
  • Apr 6, 2024 5:33pm Apr 6, 2024 5:33pm
Hi guys, amazing thread. I am still reading the first pages of it. I already found a lot of helpful info.
I have been playing with hedging for a long time. Right now I am using it as a stop loss /I am open counter trade when I am wrong/ or around the news.

I saw there are different methods of hedging or types of open and closing trades.
I like to close one in profit /if I use the same lot size/ and wait for the open trade which is on loss to get back a little so I can close it or open another one in the same direction so I end up with even smaller lose or without a lose at all.

The question here is how you manage a trade if you hedge, take profit on one side but the price never comes back
I have this case from last week EUR/USD. I opened 2 short trades at the very bottom at the start of the week and opened later 2 longs to cover them. Later I managed to get fair profit from the longs, but decided to leave the open shorts. During the week I managed to get almost 5% in profit from all other trades I had.
The data is mixed for the next week and I am wondering how to manage these two.

I can open a long trade to hedge and stabilize the current loss while meanwhile waiting for clear direction or placing other orders.
I am also thinking of continuing trading and when I have a profit trade to start partially closing the the losing trade. The thing is that if we continue in the opposite direction even the parts I am going to close will start to become bigger.

I really don't think to close these 2, because sooner or later the price will come back, the thinking is that this is not a sustainable strategy
How do you manage your trades if you are in the same situation?
Dreams don't work unless you do
RealDeal All Time Return: -73.9%
  • #2,772
  • Apr 6, 2024 6:10pm Apr 6, 2024 6:10pm
Hello Ko, welcome,

Just my thoughts but it's difficult to know the whole picture as so much depends on your personality, bank size, patience levels, available trading time and more. Please don't take this the wrong way but I hear my early demons in comments like "clear direction" and "sooner or later price will come back". Whilst a returning price is a fundamental aspect of what we do, if things get too separated I'm either relying on other profits, positive swap payments or a shutdown of the basket when acceptable (even if it means a loss). There are times when all manner of circumstances will put you in a bind and, in my opinion, it's best to cut and assess then on to the next set of trades.

I see hedging as a means to protect my bank and put trades in places in case things go wrong, ultimately you can't just sit on the fence to make money so general direction and market structure determines my bias (higher highs, lower lows and breaks of SR).

I believe the mindset is key here, zero assumptions and not relying on anything other than yourself and the minimum amount of information possible, hope it helps.
Sounds like a lot of screen time to me.
  • #2,773
  • Apr 6, 2024 6:19pm Apr 6, 2024 6:19pm
I think what pissed me off the most last week is the fact my stupid EA, which just chucks out trades at relatively random places 24/7, out performed me for the first time in 11 weeks

Edit: Perhaps I shouldn't be rude to EA, he has made £1600 profit; which now makes me realise who was the stupid one last week.
Sounds like a lot of screen time to me.
  • #2,774
  • Apr 7, 2024 1:33am Apr 7, 2024 1:33am
Quoting LazyTrades
I think what pissed me off the most last week is the fact my stupid EA, which just chucks out trades at relatively random places 24/7, out performed me for the first time in 11 weeks Edit: Perhaps I shouldn't be rude to EA, he has made £1600 profit; which now makes me realise who was the stupid one last week.
Haha! Dont be too harsh on yourself Lazy!
  • #2,775
  • Apr 7, 2024 3:07am Apr 7, 2024 3:07am
Quoting LazyTrades
Hello Ko, welcome, Just my thoughts but it's difficult to know the whole picture as so much depends on your personality, bank size, patience levels, available trading time and more. Please don't take this the wrong way but I hear my early demons in comments like "clear direction" and "sooner or later price will come back". Whilst a returning price is a fundamental aspect of what we do, if things get too separated I'm either relying on other profits, positive swap payments or a shutdown of the basket when acceptable (even if it means a loss). There...
Thanks for your reply. Basically, I can leave these two orders open orders even if the price goes to 1.09 or 1.10 of course it will start to hurt if this happens and kind of prevent me open new orders because of the less margin available. Also, I don't think is reasonable because even if I close the two now and write off the losses, in the next weeks and months the recover is possible. If I leave them forever the option for completely blowing my account is also on the table


Maybe I will hedge again the orders only to be sure this is the maximum possible loss I will take if everything goes completely wrong. I also will start opening new trades and when I have a profitable one will close partially some of the losing trades, this way I will cut losses. This is the plan for now.
Dreams don't work unless you do
RealDeal All Time Return: -73.9%
  • #2,776
  • Apr 7, 2024 4:05am Apr 7, 2024 4:05am
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...
Hi mate, cheers for sharing this, this a very interesting strategy, I've gone back and had a look at the history. I am going to give it a go this week with low stake to get a feel for it. Wondering where you would tend to cut your loss on this trade? I think I will try with a 2-3x dividend stop to start. Also have you tried this with any other indexes?
  • #2,777
  • Apr 7, 2024 5:12am Apr 7, 2024 5:12am
Quoting 1qaz2wsx33
{quote} Hi mate, cheers for sharing this, this a very interesting strategy, I've gone back and had a look at the history. I am going to give it a go this week with low stake to get a feel for it. Wondering where you would tend to cut your loss on this trade? I think I will try with a 2-3x dividend stop to start. Also have you tried this with any other indexes?
I only use it on ftse but no reason not to try on any index with a decent dividend just forward test to see how it goes
  • #2,778
  • Edited 4:57pm Apr 7, 2024 4:10pm | Edited 4:57pm
Quoting Kodzhamanov
{quote} Maybe I will hedge again the orders only to be sure this is the maximum possible loss I will take if everything goes completely wrong. I also will start opening new trades and when I have a profitable one will close partially some of the losing trades, this way I will cut losses. This is the plan for now.
This sounds like the better option to me but I don't have all the information so can't say it's defintely what I would do, it's one of the reasons I only trade positive swap pairs one-way, at least you get something holding the positions overnight. It's surprising how much swap can add up, especially when you have big margin in the pot, equally how much it can cost the other way forcing you to make bad decisions at times (at least for me). It makes up 10-15% of my profit at times.
Sounds like a lot of screen time to me.
  • #2,779
  • Apr 8, 2024 2:22am Apr 8, 2024 2:22am
Quoting T721
One more example for you guys --- this is from 28th Feb this year {image}
Cool, nice to learn something new. Cheers
  • #2,780
  • Apr 8, 2024 2:26am Apr 8, 2024 2:26am
Quoting Fagin
{quote} Cool, nice to learn something new. Cheers
Just paper trade it going forward before jumping in live. There are literally 100s of ways to trade the dividend. practice for 3mnths first to understand what i mean pal
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