Hedge trading

Let's say I open two orders at the excact same time. One buy position and one sell position.

I believe that my buy signal is strong so I open 3 mini lots in a long position and 1 mini lot in a short position to hedge my trade.

I use 15 pip stop loss and 15 pip take profit for both of them.

What happens if there is a news events when I have my two orders open and my broker increases their spread to 30? Will I loose both trades or will one trade hit the 15 pip stop and one hit the 15 pip take profit?

Yes.

Yes I will loose both trades? or Yes one order will hit 15 pip take profit and one order will hit 15 pip stop?

Yes, you will lose both trades, or one order will hit 15 pip take profit and one will hit 15 pip stop.

I'm being a smartass. It would depend on what price your trades were filled at, and exactly where price was when the broker chose to spike their spread.

There's no way to answer the question. I wouldn't suggest trying it, you're likely to end up unhappy.

Thanks for the reply...

What I want with my trade is to hedge the trade by opening 1 buy and 1 sell postion at the same time.

When there is no news coming out and the spread is the normal 1-2 will it be a problem to trade 1 buy and 1 sell position both with 15 pip take profit and 15 pip stop at the same time?

When there is a news coming out what will you recommend to do? simply remove the take profit and stop before the news is coming out and enter them again when the spread is normal again or close the trade before the news?

Thank you for taking your time to help me out

Some brokers won't let you have an open long and open short at the same time. If you try to hedge in Oanda, they just close the side that's open, i.e. you're long 1000 EUR/USD and then put in a sell for 1000 EUR/USD thinking another position will appear. Surprise! The one you had disappears and you have 0 positions instead of 2.

I won't ask about your strategy, although I don't understand it. For that matter, I don't understand hedging. You just end up with 2 trades you don't know what to do with instead of just one moving against you. You're left with the same tough decisions, but twice, and pay the spread twice.

Anyway, I can't answer your question. It depends on your trading timeframe and what the news release is. It depends on how wide your broker opens spreads on that news release, and that may vary from one time to the next on the same release.

I try not to be in a trade when news is coming out that has a red rating, unless it is a longer term trade with a wide stop. An hour before the release, I'll not enter a trade as a rule, until the news is over.