Hedging as a trading strategy | Forex Factory

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Hedging as a trading strategy

  • #1
  • First Post: Jan 20, 2008 5:16am Jan 20, 2008 5:16am
Hello forex experts,

I am a beginner who have been tring to build a trading strategy. I came across a write-up which intoduced hedging, buy nd sell at the same time.
I want to know your views on this. How do I trade this successfull and make profit?

Kenny
  • #2
  • Jan 20, 2008 9:44pm Jan 20, 2008 9:44pm
buy 'n sell in the same time, but in different thing, such as future, option or stock,
there is correlation which is fully specullation, for famous example, there is gold vs $$$
  • #3
  • Jan 21, 2008 12:28am Jan 21, 2008 12:28am
It's possible to make profit with a special hedge but it's not possible
for the random retail forex guy with MT4. You'd have to be able to sell/buy units not lots and have to automate the whole process. These oppportunities don't last long.
  • #4
  • Jan 21, 2008 4:36am Jan 21, 2008 4:36am
So, I have realised that most threads here are against hedging. Now is there any condition for hedging or one should just ignore it from one's trading dictionary?
  • #5
  • Jan 21, 2008 9:57am Jan 21, 2008 9:57am
I like hedging it's the main part of my trading strategy.
  • #6
  • Jan 23, 2008 5:04am Jan 23, 2008 5:04am
Quoting Linus78
I like hedging it's the main part of my trading strategy.
Hello Linus,

Can you share with us your hedging strategy? What about its positive results or drawbacks?
  • #7
  • Jan 23, 2008 6:28am Jan 23, 2008 6:28am
Risk is absoulte zero no draw down but profits are small maybe 6-7 pips.
But you can use high leverage and extrem margin usage.
You'll need a "Non-Bandit" Broker.
Smallest possible spreads and units instead of lots and the ability to
execute 3 orders at once with razorsharp orderexecution when the perfect conditions occure.
So it's impossible with any MT4 Broker because you have to pay for
MT4 with your spread and you're trading lots.
  • #8
  • Jan 24, 2008 4:25am Jan 24, 2008 4:25am
Quoting Linus78
Risk is absoulte zero no draw down but profits are small maybe 6-7 pips.
But you can use high leverage and extrem margin usage.
You'll need a "Non-Bandit" Broker.
Smallest possible spreads and units instead of lots and the ability to
execute 3 orders at once with razorsharp orderexecution when the perfect conditions occure.
So it's impossible with any MT4 Broker because you have to pay for
MT4 with your spread and you're trading lots.

Ok, I'm using an MT 4 broker. But others like FXCM accept hedging
  • #9
  • Last Post: Jan 24, 2008 11:10am Jan 24, 2008 11:10am
It's not that they won't accept hedging.
It's because you pay for MT4 with your spread so they are big and you can't sell exactly 123456$ only 10k or 100k.

http://img132.imageshack.us/img132/1330/hedgezg6.jpg

You can't do that with small bucketshop brokers. Accept it.
You have to adjust at least one currency to a specific amount of
units or you're not fully hedged and exposed to market movements which will make you lose money.
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