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Hedging/averaging trades without prediction

  • #3,161
  • May 13, 2024 6:44am May 13, 2024 6:44am
Quoting pipcruiser
CAC trade gap filled
Well done

I was on it aswell. My only observation was the interest payment over the w/e. Quite high, for me any way.

I think with trading this prior to the w/e , you have to assume the gap wont be filled until the Monday / Tuesday.

As Mr T has said, its trading this strategy with small amounts until you understand how all the different components work ( or don't work ) for your type of trading , especially if you look to trade all dividends on through the week

Cheers
  • #3,162
  • May 13, 2024 7:00am May 13, 2024 7:00am
Quoting bigbadbarry
{quote} Well done I was on it aswell. My only observation was the interest payment over the w/e. Quite high, for me any way. I think with trading this prior to the w/e , you have to assume the gap wont be filled until the Monday / Tuesday. As Mr T has said, its trading this strategy with small amounts until you understand how all the different components work ( or don't work ) for your type of trading , especially if you look to trade all dividends on through the week Cheers
to offset the weekend interest i take more positions in morning
  • #3,163
  • May 13, 2024 7:41am May 13, 2024 7:41am
Quoting pipcruiser
I just got deducted from IG “correction dividend” aprox 65% of the FTSE dividend I got credited yesterday… Did you guys experience the same!? PC {image}
Here is the response from IG support (does not really makes sense if I was the only one who got this charge back deducted from my account) :

"Thanks for reaching out to us regarding the dividend adjustment done on your account.

On the 8th of May 2024, we posted dividend adjustments for the FTSE100 of 19.23points when we should have posted 6.57 points.

This is because there were a mix of regular and special dividends on the FTSE. For our cash products (which you traded on your CFD account), we need to exclude any special dividends from our standard dividend adjustments, and we accounted for only one of the special dividends but not the other.

Therefore, we posted a ledger correction on the 9th of May 2024 to correct this dividend posting to 6.57 points.

However, it is important to note that these are simply adjustments for the dividend, and not a direct debit/credit to and from your account. When you trade on leverage, you do not actually own the underlying asset, so you will not be able to realise a profit or loss when the index you are trading pays dividends, as this is a planned public event.

When constituents of an index declare dividends, there are two legs of adjustments that IG usually have to make:

(I) The price of the index will fall as a result of the dividends declared. In such a situation, your running profit and loss will be affected. Hence, if you have a long position, your position will reflect a less positive P&L or a negative P&L (as you are now selling at a lower price). On the other hand, if you have a short position, your position will reflect a positive P&L or a less negative P&L (as you are now buying back at a lower price).

(II) If you have a long position, you will receive the dividends provided you hold the position past the market-day closing prior to the ex-dividend date. If you have a short position and held the position past the market-day closing prior to the ex-dividend date, you will have to pay the dividends.

Essentially, the above adjustments in (I) and (II) will net off and your resulting impact at that point of dividend declaration is NIL.
You can also refer to the below link for more information:
How do dividend adjustments affect my position? | IG AE "

PC
Less is more...
  • #3,164
  • May 13, 2024 7:45am May 13, 2024 7:45am
Quoting pipcruiser
{quote} Here is the response from IG support (does not really makes sense if I was the only one who got this charge back deducted from my account) : "Thanks for reaching out to us regarding the dividend adjustment done on your account. On the 8th of May 2024, we posted dividend adjustments for the FTSE100 of 19.23points when we should have posted 6.57 points. This is because there were a mix of regular and special dividends on the FTSE. For our cash products (which you traded on your CFD account), we need to exclude any special dividends from our...
which you traded on your CFD account

get a spreadbet account not contract for difference
  • #3,165
  • May 13, 2024 7:45am May 13, 2024 7:45am
Quoting gian97
{quote} If the schedule and dividend distribution has remained the same for a few years, I can easily create the expert advisor and do a backtest and get all these statistics and share them with the forum, for manual trading. The gap not present in the history it's not a big deal, it's not for testing the dividend, but the after retrace for filling
Good idea, I manually did some last week for 2020 and every one returned but it was a very quiet year evidently for dividends, covid i guess.

Just remember daylight savings in the UK:

United Kingdom clocks are now on: Daylight Saving Time

  1. Daylight Saving Time ends: 27 October 2024 01:00 GMT. Clocks go back one hour.
  2. Daylight Saving Time began: 31 March 2024 01:00 GMT. Clocks went forward one hour.


2021 28 March > 31 October
2022 27 March > 30 October
2023 26 March > 29 October
2024 31 March > 27 October

Cheers

F

  • #3,166
  • May 13, 2024 7:59am May 13, 2024 7:59am
Quoting T721
{quote} which you traded on your CFD account get a spreadbet account not contract for difference
I traded CFD on MT4 with IG.

PC
Less is more...
  • #3,167
  • May 13, 2024 8:01am May 13, 2024 8:01am
They got this wrong:

"(II) If you have a long position, you will receive the dividends provided you hold the position past the market-day closing prior to the ex-dividend date."

I mean you just have to have the long position a few secs before div time, not the day before

PC
Less is more...
  • #3,168
  • May 13, 2024 8:36am May 13, 2024 8:36am
Quoting pipcruiser
They got this wrong: "(II) If you have a long position, you will receive the dividends provided you hold the position past the market-day closing prior to the ex-dividend date." I mean you just have to have the long position a few secs before div time, not the day before PC
They mean pre market day close at 1630 hrs GMT next "Day" is 1630.01 (although technically closed)
  • #3,169
  • May 13, 2024 9:05am May 13, 2024 9:05am
Quoting T721
{image}
I stare in the mirror but it cracked
My thoughts are that people believe in these "Guru" quotes but forget the" hard work" bit
every Saint has a past. Every Sinner has a Future
  • #3,170
  • May 14, 2024 12:36am May 14, 2024 12:36am
Quoting lrn2trade23
{quote} hold it long it is not just to think about the buy the sell or the clear direction etc. wont you need also to be sure not to be hit by a tripple swap whammy sometimes along the line???
Yes, it happens and one has to deal with this too. Part of the game
Dreams don't work unless you do
RealDeal All Time Return: -73.9%
  • #3,171
  • May 15, 2024 7:55am May 15, 2024 7:55am
Quoting birdland
{quote}
Birdland, i hope you are doing fine! I'm in the process of reading the whole theard. I'm at about page 40 at the moment.
I have been looking in to averaging and hedging in the last months to make my trading more stress-free and less intense. And i really like how wave combined the two. I also trade GU. I saw on another theard how exceptionally consistent you have been. Kudos and well deserved.

Does it also have to do with the walks to the forest you mentioned? I think i have to do that now as well

Just wanted to as you if you still hedge and average the way wave outlined in the first pages and if yes, has it evolved over the last couple of months/years?
Do you still go for 4 to 5 pips and start averaging after the hedge?

I hope it's ok to ask in here.
  • #3,172
  • Edited 11:58pm May 15, 2024 8:29am | Edited 11:58pm
Quoting Mojoloto
{quote} Birdland, i hope you are doing fine! I'm in the process of reading the whole theard. I'm at about page 40 at the moment. I have been looking in to averaging and hedging in the last months to make my trading more stress-free and less intense. And i really like how wave combined the two. I also trade GU. I saw on another theard how exceptionally consistent you have been. Kudos and well deserved. Does it also have to do with the walks to the forest you mentioned? I think i have to do that now as well Just wanted to as you...
So yes, I trade, hedge&average 95% GU.

and I am constantly improving this way of trading, I am my own AI;-)

yes, it's not easy to explain. i have many different templates that i use. but the best one is still pure price action. this is a fulltime job. or rather a calling.

so i don't do the 5pips TP anymore. i try to reach +20TP or what the market gives.

going into the woods is really important because you need to have good nerves to achieve these results like a top athlete.

hope to have helped a little (or caused confusion)
trading is like dancing, don't think and just listen to the music!
  • #3,173
  • May 15, 2024 9:11am May 15, 2024 9:11am
Quoting pipcruiser
On the 8th of May 2024, we posted dividend adjustments for the FTSE100 of 19.23points when we should have posted 6.57 points.
Maybe that explains why there was a much smaller gap with other brokers. I haven’t bought before 4:30 so i didn’t receive a dividend. You actually don’t get paid any dividend at all, it‘s just a cashflow adjustment to your P&L. It’s not like investing in the underlying and getting a dividend. Do you even get a 100%? I couldn’t find any information by IG but most other brokers only seem to adjust by 80-90%.

I will try again today. I do have a CFD account opened with them. Spread betting is only for the strange people from the island.

Not sure how to trade it with other brokers. And can anyone explain why there is actually no prove adjustment in the underlying market it self like the FTSE index? Shouldn’t you see a drop in price there too if it gets adjusted for dividends? I don’t see any gaps on the ex-dividend days or the day after.
  • #3,174
  • Edited 10:32am May 15, 2024 10:20am | Edited 10:32am
Hedging, the way I'm testing/using it in demo and in back-tests is a type of money management system. Its basically to get out of a losing position with a profit or at break even. Its doable, but it has its pro's and con's.

One 'con' is that, so far, it does not seem to be a 'get rich quick' type of strategy. Although I'm still trying making it into one by exploring different strategies and trying to find the best lot size/risk per trade for optimal account growth. Currently, you can only make a living off of it if you have like a 40k or 50k size account.

Also, I haven't gone through the entire thread, (only skimmed through the first 25 or so pages) so I'm not sure if its the same method that I'm testing. One problem I'm facing is that sometimes I'll end up holding hedged positions for weeks at a time. I'm able to end up at break even 90% of the time but the problem here is loss of time and limitations on margin (caused by my money being held in the market, forcing me to scalp that pair with smaller positions).


Its work in progress, but here are some early results:
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  • #3,175
  • May 15, 2024 10:37am May 15, 2024 10:37am
Quoting Pippard
Hedging, the way I'm testing/using it in demo and in back-tests is a type of money management system. Its basically to get out of a losing position with a profit or at break even. Its doable, but it has its pro's and con's. One 'con' is that, so far, it does not seem to be a 'get rich quick' type of strategy. Although I'm still trying making it into one by exploring different strategies and trying to find the best lot size/risk per trade for optimal account growth. Currently, you can only make a living off of it if you have like a 40k or 50k size...
Yes, scalping against main position is the way to go.
1.02^200
  • #3,176
  • May 15, 2024 10:46am May 15, 2024 10:46am
FTSE in play......
  • #3,177
  • Edited 11:52am May 15, 2024 11:07am | Edited 11:52am
Quoting Fagin
FTSE in play......
I bought futures contracts (Z) on Interactive brokers.

It has 15 min delay in quotes, feels like pissing in the dark haha - makes it more exciting!

But the price action seems to mirror the CFD...

Cheers

PC
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Less is more...
  • #3,178
  • May 15, 2024 11:54am May 15, 2024 11:54am
Quoting d5400
{quote} Yes, scalping against main position is the way to go.
It’s one way to do it
Sounds like a lot of screen time to me.
  • #3,179
  • May 15, 2024 11:55am May 15, 2024 11:55am
Quoting pipcruiser
{quote} I bought futures contracts (Z) on Interactive brokers. It has 15 min delay in quotes, feels like pissing in the dark haha - makes it more exciting! But the price action seems to mirror the CFD... Cheers PC {image}
Do you get the dividend adjustment with them?
  • #3,180
  • May 15, 2024 12:01pm May 15, 2024 12:01pm
Quoting Pippard
Hedging, the way I'm testing/using it in demo and in back-tests is a type of money management system. Its basically to get out of a losing position with a profit or at break even. Its doable, but it has its pro's and con's. One 'con' is that, so far, it does not seem to be a 'get rich quick' type of strategy. Although I'm still trying making it into one by exploring different strategies and trying to find the best lot size/risk per trade for optimal account growth. Currently, you can only make a living off of it if you have like a 40k or 50k size...
Keep going with the thread, think I must have read it at least 5 times (but it was certainly shorter then). I’d agree it’s not get rich quick and you need capital in the real world but it’s far less stressful when you get it down. I wouldn’t necessarily say it’s a get out of a losing position strategy, at least for me. I’m more in the camp of not handing my money over so easily with stoplosses, today was a great example.
Sounds like a lot of screen time to me.
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