DislikedWell, I can speak about it from where I see it but I do not profess to know exactly the way Breeze performs the hedge function.
I do it like this.
1. While I am trading I do not hedge or set any SL unless the market is very volatile then I'll set a disaster hedge way out there 150 to 200 pips.
2. When it is time for me to leave the computer I set a hedge around 50 pips above/below any resistance/support I think price has a possibility to touch while I'm away.
3. When I return, normally no hedge is hit but occasionally when it does get hit then, I sit back, smoke a cig, have a cup of coffee and bless the morning because I don't have to worry about making any quick decision to get unhedged.
Anyways here is the part were most people screw up.
Now that we're hedged, psychology begins to work on the mind. On one hand we know we are completely safe and have literally all the time in the world to get back into the game on a positive note yet on the other hand there is a tendency to feel pressured to hurry and get back in being afraid we might just miss that magic moment were we can unhedge and all will be well.
Speaking from my own standpoint here remember, when I suddenly find myself hedged, I then work out a plan of:
What did I do wrong which landed me in a hedge or was there an unusual condition that got me hedged?
a: If it was an error of judgment regarding correct pivots S/R's or what ever then I simply concentrate harder on my charts and find where the correct entry point should have been that I missed. Then I set a order to unhedge me at that point and begin again.
b: If it was because of a change in market conditions then if the conditions are plain and clear I'll do the same as a: above but if they are not clear then I'll put that trade on the back burner for as long as it takes for market conditions to reveal themselves so I can again stalk the correct timing to enter (re-enter) the position again.
The most important thing anyone can understand about hedging is that once hedged, we must put all urgency to the side and relax, say to ourselves... I'm hedged!!! WONDERFUL! Then work out a trading plan to become unhedged the same as you would work on a plan to take any trade.
Well... I hope this helps some. Again, I really don't know exactly how Breeze does it but I did develop my hedging system based on watching him hedge for quite some time now but Breeze is the final authority on hedging, and he is very very good at it.
It would not be right for me to leave out the common sense fact that anyone wishing to learn how to hedge should practice on a demo account until they feel comfortable with it before implementing anything different such as hedging on their live trading account.Ignored
Thanks for your time to explain this.