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Three Pairs Hedging

  • #1,201
  • Jul 10, 2024 12:58am Jul 10, 2024 12:58am
Hi, I'm still a newbie tho I was asking wat if I hedge two negatively correlated pairs instead of adding the third one, how wud that come out??
  • #1,202
  • Aug 28, 2024 1:49am Aug 28, 2024 1:49am
An old but very interesting thread. Gone through the whole thread in the last couple of days. Without commenting on what I read, my understanding of the strategy is that we need to figure out when to go for BBS and when for SSB for a particular triangular combination. Did anyone get any breakthrough in figuring that out?

Thanks
  • #1,203
  • Oct 4, 2024 9:17am Oct 4, 2024 9:17am
I find the concept of hedging interesting. I have tried this particular strategy and have found that it is profitable, if you are on the right side of a trend. If you are on the wrong side, losses are great. There are times when all 3 pairs can be either be + or -, therefore not truly showing a correlation. The issue of identifying the trend and therefore purposely choosing BBS or SSB would be the answer - but then one would ask, if you identified the trend, why not just trade that pair directly?
  • #1,204
  • Edited 11:11am Nov 29, 2024 10:40am | Edited 11:11am
Quoting karthik11128
Hello to all, I read all 59 pages of this thread and so many people are given their best effort. My fund manager doing same concept like 3 pair hedging last 3 years successfully, but I don't know the strategy. But, I can share my trading statement, if someone dig the statement, can discover the strategy. All the best. Thank you,{image}
Did u find out, anything about the strategy?

does someone have any idea of what the strategy could be from the statement uploaded...
  • #1,205
  • Feb 16, 2025 8:14am Feb 16, 2025 8:14am
Hi
I have redone the Idea with many hours work for MT5. For the moment, until we found working setups, for Demo Accounts only.
Happy testing.

I recomends and hints:
default settings are already not so bad.
Avoid *USD* they jumps because the indices US30, NQ etc.
you can try only 2 pairs as well.
you can try US30&NQ an be surpriced.
from my experience, time matters. work with tradewindows.
General: many setups and strategies working only in small tradewindows
Attached File(s)
File Type: ex5 threePairs.ex5   48 KB | 295 downloads
  • #1,206
  • Feb 22, 2025 10:18am Feb 22, 2025 10:18am
I improved some code. Please use this Version.
Feedback is welcome.
Attached File(s)
File Type: ex5 threePairs.ex5   49 KB | 331 downloads
  • #1,207
  • May 4, 2025 3:22pm May 4, 2025 3:22pm
It does not hedge...
As you can see here from MT5 Strategy Tester, it opens 3 positions... Buy USDCHF, Sell GBPUSD, Sell GBPCHF, which equals USD + USD + CHF.
The correct order is either Buy USDCHF, Buy GBPUSD, Sell GBPCHF, OR the opposite Sell USDCHF, Sell GBPUSD, Buy GBPCHF.
Attached Image (click to enlarge)
Click to Enlarge Name: screenshot.png Size: 19 KB
  • #1,208
  • May 13, 2025 8:26am May 13, 2025 8:26am
I have coded ea for this.. if anyone can test this.. and show us results good.
Attached File(s)
File Type: ex4 pairhedging.ex4   13 KB | 339 downloads
  • #1,209
  • May 21, 2025 12:04am May 21, 2025 12:04am
seems like this thing work so far.. even with very low balance. but it will take its on time and like OP said use same pairs and same method he recommend. use my ea it works so far since I posted. it will take it own time to recover profit. will update you once I have something.
  • #1,210
  • May 21, 2025 10:19am May 21, 2025 10:19am
hi guys , my approach is gathering all rings buy&sell under a basket trading with least fixed lot conducting by an EA.
Have somebody any experience about this level of work?
We can add XAUUSD, gathering with two proper correlated Fx pair too (I will explain how further)
  • #1,211
  • Jul 21, 2025 9:40am Jul 21, 2025 9:40am
Sorry but agree with SkyzerFX, i also codd my own EA like a year ago and this doesn't work long term, i've tested with 18 combinations in both directions (sell sell buy and buy buy sell) and no combination survived more than 2 years (i usually do 15-20 years backtest, 1-2 years is nothing to be profitable long term.)
Correlations doesn't last forever, spikes occurs, gaps occurs, even with a raw account and super low latency (because YOU HAVE to add latency, swaps and spreads on the backtest, otherwise you're lying to yourself) it just doesn't work, i'm sorry, best wishes.
SPB All Time Return: 4.6%
  • #1,212
  • Last Post: Dec 9, 2025 8:51am Dec 9, 2025 8:51am
Quoting GotyMetal
Sorry but agree with SkyzerFX, i also codd my own EA like a year ago and this doesn't work long term, i've tested with 18 combinations in both directions (sell sell buy and buy buy sell) and no combination survived more than 2 years (i usually do 15-20 years backtest, 1-2 years is nothing to be profitable long term.) Correlations doesn't last forever, spikes occurs, gaps occurs, even with a raw account and super low latency (because YOU HAVE to add latency, swaps and spreads on the backtest, otherwise...
brother
no need to test
it is easy to judge using only paper and pencil for 1 min ..
it is a math issue . .
this semi-hedging will never win, wil never loss, except swaps+spread losses . .

for example:
GBPUSD B
USDCHF B
GBPCHF S

compound pair is GBPCHF=GBPUSD*USDCHF . .
.
therefore from this equation, we ensure in advance impossibility of profit
no need to held tests .. it is basics
each day 10%,,,, https://www.forexfactory.com/thread/1371538
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