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Mathematical hedging strategy without a stop loss 22 replies

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Attachments: Hedging/averaging trades without prediction
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Hedging/averaging trades without prediction

The DIVI trades been a bit slack of late...
Will try me a DIVI trade today me thinks......FTSE 3.7 worth a punt
  • #3,763
  • Quote
  • Jul 31, 2024 11:30am Jul 31, 2024 11:30am
buy 8357 FTSE
...close 8361 +4 ...plus 6 pip DIVI...
  • #3,764
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  • Jul 31, 2024 11:36am Jul 31, 2024 11:36am
Saw a drop to around 8348 on my feed but no gap, climbing nicely as usual now.
Sounds like a lot of screen time to me.
Hi guys,

This is a question for the ones who trade without specific entry criteria. What is your exit strategy? Is it support/resistance, fixed TP or Price action? I am testing different approaches and wish to hear your opinion/experience.
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Dreams don't work unless you do
RealDeal All Time Return: -57.6%
Quoting Kodzhamanov
Hi guys, This is a question for the ones who trade without specific entry criteria. What is your exit strategy? Is it support/resistance, fixed TP or Price action? I am testing different approaches and wish to hear your opinion/experience. {image}
I close my trades when in profit on the 5 minute...
  • #3,767
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  • Edited 3:39pm Aug 3, 2024 4:34am | Edited 3:39pm
Quoting Kodzhamanov
Hi guys, This is a question for the ones who trade without specific entry criteria. What is your exit strategy? Is it support/resistance, fixed TP or Price action? I am testing different approaches and wish to hear your opinion/experience. {image}
One example: I’ll start with a buy and sell stop order either side of a candle (as I’m no druid and have no fortune telling skills), if one side hits profit I’ll close and repeat, if I get hedged I’ll close the profit side, reduce the other side slightly and put another stop order in place. Never have more than 4 orders in place once hedged and keep reducing the losing side with profits from winning side.
Sounds like a lot of screen time to me.
Quoting LazyTrades
{quote} 1 example: I’ll start with a buy and sell stop order either side of a candle (as I’m no druid and have no fortune telling skills), if one side hits profit I’ll close and repeat, if I get hedged I’ll close the profit side, reduce the other side slightly and put another stop order in place. Never have more than 4 orders in place once hedged and keep reducing the losing side with profits from winning side.
What is your take profit? Also how far away is the hedge order?
  • #3,769
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  • Edited 10:27am Aug 3, 2024 10:14am | Edited 10:27am
Quoting zola
{quote} What is your take profit? Also how far away is the hedge order?
Nothing set in stone but I’m conscious when trading this way that every new order has to beat the spread, I also keep the hedge orders behind swing highs/lows and support/resistance levels as protection. My biggest issue with this style is it’s quite subjective and therefore hard/impossible to make into an EA; when I trade this way it requires a lot of screen time as I’m constantly adjusting positions. Definitely needs practice beforehand and a good head for maths.
Sounds like a lot of screen time to me.
  • #3,770
  • Quote
  • Edited Aug 7, 2024 3:25am Aug 6, 2024 10:54pm | Edited Aug 7, 2024 3:25am
You bros and bro-ettes going to enter the FTSE adjustment tonight or give it a miss due to volatility?

I'm getting back into trading after several weeks out for family reasons.

While I've made some divi gap trades unhedged and they've worked out, I'm of the view that if there is validity to the price behavior that the position should be hedged with another instrument, otherwise its just luck that stocks haven't had a downturn.

If anyone hedges their FTSE divi trades, what instruments are you using? DAX index? Mix of DAX and CAC? US500 with currency hedge?
Traded the FTSE div yesterday, hedged with CAC40 and GBP/EUR. IG estimating an adjustment of 19 points.

FTSE actual drop was 8165.6 => 8146.4 = 19.2 points = 0.236% gain needed to close gap

Watched it for a bit, entered (long) after it dropped more to 8139.1

Hedged via short CAC at 7259.4.

The hedge was a good call because as I write this FTSE is 8085 = 0.665% down from entry of 8139.1.

Closed a couple of hrs later at FTSE 8090.1 (down/loss 0.602%) and CAC at 7202.1 (down/profit 0.789%) for net 0.187%.

I could have closed at higher net profit - what I actually did was close the CAC in profit -0.789% and look at the FTSE chart - I thought FTSE would recover a little so left it open - was 0.46% loss at the time, but dropped more and closed for 0.60% loss for net described above.

Also hedged the currency exposure - GBP/EUR. Movement was 1.16246 / 1.16383 - added 0.118% to the trade.

So, netted 0.305%. If hadn't let the FTSE long run unhedged could have been 0.516%.

No hedging at all would mean position still open at down 0.665%.

Anyone else still trading in this volatility?
Quoting samgribbles
Traded the FTSE div yesterday, hedged with CAC40 and GBP/EUR. IG estimating an adjustment of 19 points. FTSE actual drop was 8165.6 => 8146.4 = 19.2 points = 0.236% gain needed to close gap Watched it for a bit, entered (long) after it dropped more to 8139.1 Hedged via short CAC at 7259.4. The hedge was a good call because as I write this FTSE is 8085 = 0.665% down from entry of 8139.1. Closed a couple of hrs later at FTSE 8090.1 (down/loss 0.602%) and CAC at 7202.1 (down/profit 0.789%) for net 0.187%. I could have closed at higher net profit -...

Sounds very complicated...
Anyway, after a while the FSTE gap has been filled.
Quite a big one for the FTSE next Wednesday.
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Quoting zola
Quite a big one for the FTSE next Wednesday. {image}
Great, missed this weeks DIVI...
Quoting Waveskierrob
{quote} Great, missed this weeks DIVI...
Roll on 16:29 uk time tomorrow, built up enough confidence to go BIG this time....
  • #3,776
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  • Aug 14, 2024 11:46am Aug 14, 2024 11:46am
Quoting Waveskierrob
{quote} Roll on 16:29 uk time tomorrow, built up enough confidence to go BIG this time....
Are you in Rob? (I am)
always learning
  • #3,777
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  • Aug 14, 2024 12:51pm Aug 14, 2024 12:51pm
Quoting griffc
{quote} Are you in Rob? (I am)
No missed it, good drop, hope it's closes sooner rather than later for anyone who's taken the trade...
  • #3,778
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  • Aug 14, 2024 12:55pm Aug 14, 2024 12:55pm
Quoting Waveskierrob
{quote} No missed it, good drop, hope it's closes sooner rather than later for anyone who's taken the trade...
It's still on.
Quoting zola
{quote} It's still on.
your right, may go LONG if price hits original drop price before gap closes....
Couldn’t play today but good luck to those who did.
Sounds like a lot of screen time to me.
3 traders viewing now, 1 is a member:
sakimer