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Mathematical hedging strategy without a stop loss 22 replies

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Hedging/averaging trades without prediction

Quoting pipcruiser
I tested the EA live and it works fine so far, use on own risk! PC
I don't understand exactly how the pre-trade is intended here. That's why I deactivated it. Otherwise, here are my settings for CAC and ICM today where, according to ICM, a 7.3 point adjustment is to be expected. The chart in the background shows a previous ex-dividend day, 13/05/24, where the CAC was given as 18.64 points. The final gap here was 17.9 points. Close 23:59:59 at 8218.15 and Open at 01:00:00 at 8.200.15.

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Quoting lddd
{quote} I don't understand exactly how the pre-trade is intended here. That's why I deactivated it. Otherwise, here are my settings for CAC and ICM today where, according to ICM, a 7.3 point adjustment is to be expected. The chart in the background shows a previous ex-dividend day, 13/05/24, where the CAC was given as 18.64 points. The final gap here was 17.9 points. Close 23:59:59 at 8218.15 and Open at 01:00:00 at 8.200.15. {image}
I dont know what times ICM uses, but here is my settings this week on CAC with IG:

https://gyazo.com/5eb146b1e9b8aaf44ca1f1d3596fd767

PC
Less is more...
Quoting pipcruiser
{quote} I dont know what times ICM uses, but here is my settings this week on CAC with IG: https://gyazo.com/5eb146b1e9b8aaf44ca1f1d3596fd767 PC
Thanks. I believe ICM (like many other brokers seem to do) adjust for dividends at rollover times. At least that’s what i used for ICM now. Close is at 00:00 and then trading opens at 01:00 again.

As i said i am new to any sort of grid reading. The EA opens multiple positions with no fixed stop loss but will close all positions at the emergency stop loss value defined?

With 99.0% you’re then willing to risk 99.99% of your account.
Quoting lddd
{quote} Thanks. I believe ICM (like many other brokers seem to do) adjust for dividends at rollover times. At least that’s what i used for ICM now. Close is at 00:00 and then trading opens at 01:00 again. As i said i am new to any sort of grid reading. The EA opens multiple positions with no fixed stop loss but will close all positions at the emergency stop loss value defined? With 99.0% you’re then willing to risk 99.99% of your account.
The grids are pending orders. Yes I bet the farm still testing on a small 1000 acc. on IG.

Be carefull around roll over / midnight the spreads can be massive.

Also set down distance point (gap) to ie 50. (5).
PC
Less is more...
  • #3,325
  • Quote
  • May 20, 2024 10:44am May 20, 2024 10:44am
Quoting pipcruiser
{quote} The grids are pending orders. Yes I bet the farm still testing on a small 1000 acc. on IG. Be carefull around roll over / midnight the spreads can be massive. Also set down distance point (gap) to ie 50. (5). PC
Thanks, corrected. Yes, the spread will be a problem. Will probably have to use different time settings. If the positions are opened too early or too late, that's probably not good either. So maybe the whole thing is not working with these brokers at all. Not sure. So far I haven't found a broker similar to IG where the Gap will show up at the end of the official closing time of the underlying index.

Edit: Should have just looked here. Yes, no, then it probably won't work at all if you can't trade again until 9:00 a.m. in the morning. In most cases the gap will have already been closed or the price will be far too high.

ICM times FR40

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  • #3,326
  • Quote
  • May 20, 2024 11:25am May 20, 2024 11:25am
Quoting birdland
if you trade without a prediction, then you can only have the edge from money management. 1. a positive swap fee as already mentioned by lazy trader. 2. a market that favours one direction and you trade in this direction. 3. a market that gives gifts such as divis. points 2 and 3 apply to terry's divi trades. the FTSE, like most equity indices, has a growth component because they tend to go up over the long term and economies are growing. so long FTSE is an edge. and when it rains gifts, in the form of swap fees or divis, that is also an edge. if...
Hey birdland love your posts. I also believe the edge is in money management but in a slightly different way, for example a roulette table at a casino is a losers game no matter the money management strategy implemented you cannot beat the house in the long run ever. trading is similar in that regard that the up and down movement is almost completely random (in my opinion) but our edge comes from the fact that price cannot go in one direction forever and unlike a roulette wheel where every individual spin is a 50/50 chance of red or black EVEN if the wheel had landed on red the past 10 times which is a rare event as a whole the very next spin is still 50/50. but with trading the further price hits red (down) or black (up) the chances of the opposite movement increase the further we go in one direction simply because of the effect of human nature and the impact we have on perceived value. the hard part in all of this is of course knowing when we get the turn, which NOBODY does, this is where money management comes in so we can ride the waves of human perceived value and unpredicableness multiple times without blowing up.

In short I agree with your points
  • #3,327
  • Quote
  • May 20, 2024 11:30am May 20, 2024 11:30am
EA trading live CAC
https://gyazo.com/699b5952d67fea4fd21b04a709754a64
Less is more...
  • #3,328
  • Quote
  • May 20, 2024 11:49am May 20, 2024 11:49am
Quoting pipcruiser
EA trading live CAC https://gyazo.com/699b5952d67fea4fd21b04a709754a64
Will follow that with interest.

I'm in manually to keep your bot company
always learning
  • #3,329
  • Quote
  • May 20, 2024 12:00pm May 20, 2024 12:00pm
Quoting griffc
{quote} Will follow that with interest. I'm in manually to keep your bot company
Ha ha awesome

I also manually bought the futures contract on Interactive Brokers..

PC
Less is more...
  • #3,330
  • Quote
  • May 20, 2024 12:10pm May 20, 2024 12:10pm
EA. IG however. If anyone finds another broker to do this with please let me know.

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Edit: Just no “pre-trade” opened, although activated.
  • #3,331
  • Quote
  • Edited 12:51pm May 20, 2024 12:28pm | Edited 12:51pm
I wouldn't have thought that the prices for index CFDs differ so much from broker to broker.

CAC (FR40) right now:

IG = 8165 Spread: 2 Points
ICM = 8201 (36 points behind IG) Spread: 1 Point
AfterPrime = 8187 (22 points behind IG) Spread: 0,5 Points
Dukascopy = 8192 (27 Points behind IG) Spread: 1 Point

So obviously no solution to buy at time of the Gap with these brokers. Hmm.
  • #3,332
  • Quote
  • May 20, 2024 12:44pm May 20, 2024 12:44pm
Quoting pipcruiser
{quote} Ha ha awesome I also manually bought the futures contract on Interactive Brokers.. PC
Is it the same there as with IG in terms of price/gap? Unfortunately I have no idea about futures. They seem to me to be a little more complicated than the cash/spot markets. Do you get the dividend balanced if you buy before the ex-div date?
CAC is still pooping?
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1.02^200
Quoting lddd
{quote} Is it the same there as with IG in terms of price/gap? Unfortunately I have no idea about futures. They seem to me to be a little more complicated than the cash/spot markets. Do you get the dividend balanced if you buy before the ex-div date?
My backtesting shows that the future moves more or less in parallel with the index. There is no hard drop on futures as the index.

No I get no dividende payment, I just buy around 16.31 and set a TP above.

PC
Less is more...
Quoting d5400
CAC is still pooping? {image}
A bit sloppy for now, but starting to firm up...

uurrgh
Quoting d5400
CAC is still pooping? {image}
Pooping - It can do that if it wishes

If you've done your stats, got your position size correct, have accepted that you may lose this trade before you got in (and hence written off the money, but that is 'ok' as it's money you accepted the risk of losing ... because you position sized it correctly ) then there should be no stress on this.
Yes it is pooping but who know where it will go.

Remember it is Bank Holiday across some of EU (France included)
always learning
Quoting pipcruiser
{quote} My backtesting shows that the future moves more or less in parallel with the index. There is no hard drop on futures as the index. No I get no dividende payment, I just buy around 16.31 and set a TP above. PC
Ah, okay. I just took a look myself and there are also futures on IG. The current price for the CAC 40 futures contract seems to be below that of the spot market. I always thought futures prices were higher. As I said, no idea about futures trading.

Will stick to the CFD/Cash markets but looks like not so easy to find a broker with lower margin requirements for the dividend trade. With IG i could maybe do 30-50 € / Point but I won't be able to do "trading for a living" with that either. That might be enough for a few new shoes here and there.

I don't think I'll ever get any further lol
Quoting lddd
{quote} With IG i could maybe do 30-50 € / Point but I won't be able to do "trading for a living" with thatl
I've not done the stats but cumulatively that should stack up well over a couple of years and open out the higher margins, unless you were looking to retire next week?
always learning
Quoting griffc
{quote} Pooping - It can do that if it wishes If you've done your stats, got your position size correct, have accepted that you may lose this trade before you got in (and hence written off the money, but that is 'ok' as it's money you accepted the risk of losing ... because you position sized it correctly ) then there should be no stress on this. Yes it is pooping but who know where it will go. Remember it is Bank Holiday across some of EU (France included)
I hope to average a lot before it fills.
1.02^200
Quoting griffc
{quote} I've not done the stats but cumulatively that should stack up well over a couple of years and open out the higher margins, unless you were looking to retire next week?
Like said i am looking for a way to trade for a living and not to grow my account slowly over the years. I could buy stocks for that and don’t have to do/look at anything. I look at trading to generate a consistent cashflow.

Terry recommended me to look at the ex dividend trade for the reason of simplicity. He said he knows people making more from that trade alone than many people working 9-5.

I need to make about 5k/month to cover my living expenses and that is why i started trading at all. There are millions of books and people here telling you how to make a living from trading but yet i haven’t found ONE damn thing that actually works for me started 10-15 years ago. It’s a joke.

Meanwhile everyone is making real income every month from working 9-5 while i am wasting hours every day looking at the screen for stupid things where nothing seems to work. I can’t find real help here.
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