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  • #1,541
  • Feb 16, 2008 11:50am Feb 16, 2008 11:50am
Geppy mirrors the Dow quite a bit.
  • #1,542
  • Feb 16, 2008 11:52am Feb 16, 2008 11:52am
Oh, and what RSI period is your QQE?
Mine's at 14 and it's not like yours.
When I change to 9 It's much more like yours, you have 9?
  • #1,543
  • Feb 16, 2008 11:56am Feb 16, 2008 11:56am
Quoting SimonJ
Thanks kujo I appreciate your input .

I'll think about increasing my stop loss to max 70 pips maybe.

To answer your question, these trades where taken on.
1. You among people here had predicted points where price would reach.
2. My pivot and fib indicators had lines at these points.
3. This made me expect a turn at these prices, it did and I entered.
4. qqe on 15m was in the direction of my first trade.

Problem is that I entered on retraces and then it turned again.
Thanks again anyway.
Ok.
You posted a 30M chart and all indicators on that chart were up at the Short trade entry.

I looked at the 15M chart, at your entry point.
QQE, Stoch were pointed down, but above the 50 line.
The CCI, one of my new indicators, was still above 0.

I think the biggest tell tale here was the Indecision bar just before your entry.
Followed by another Bullish bar close.

When the market is in such indecision, with such tight SL's, DO NOT ENTER.

I don't use SLs, because it just means one thing.... A LOSS.

If you remain patient and wait for ALL the indicators to tell you it's Down, enter short.......

NO trade, is better than a lost trade !

Hope this helps bud.
  • #1,544
  • Feb 16, 2008 5:16pm Feb 16, 2008 5:16pm
Quoting SimonJ
Here's my only and losing trades for last 2 days.
Any advice what I could have done not to lose these trades?

I think the second loss could have been avoided if I used a trailing stop EA. Or I could have closed it out at profit manually while I had the chance.
Or, I could also have respected my initial stop loss of 70 pips and it would have went for profit again.

What do you think?
Simon,
Can I recommend a 100 pip stop loss at least with this pair. Also did you ever think about hedging? Does you broker offer it? I find that price goes your way ""eventually" so you make money going both ways. And if price does truly breakout then you take the loss of your hedge .... think of it as being stopped out.
  • #1,545
  • Feb 16, 2008 5:43pm Feb 16, 2008 5:43pm
Quoting ultimate
Simon,
Can I recommend a 100 pip stop loss at least with this pair. Also did you ever think about hedging? Does you broker offer it? I find that price goes your way ""eventually" so you make money going both ways. And if price does truly breakout then you take the loss of your hedge .... think of it as being stopped out.
This is good advice, but I stayed away as hedging should be simple, and is if done right, but most I talk to don't do it right and end up losing too much, as they get frustrated and clear the decks taking a loss on both ends.

But, this is what I do, as I don't use SLs.
  • #1,546
  • Feb 16, 2008 5:50pm Feb 16, 2008 5:50pm
Quoting kujo17
This is good advice, but I stayed away as hedging should be simple, and is if done right, but most I talk to don't do it right and end up losing too much, as they get frustrated and clear the decks taking a loss on both ends.

But, this is what I do, as I don't use SLs.
If the market is ranging as it was the last 2 weeks there is absolutely no reason to use stop losses. I had a 500 pip drawdown on a long at 213 that became profitable after 2 weeks and I made interest and also 400 pips going down. I changed the way I trade (not using SL) and i am making mucho more money. I agree, most traders do not know how to do it right. Instead of a SL just put a hedge I say.
  • #1,547
  • Feb 16, 2008 6:57pm Feb 16, 2008 6:57pm
Quoting ultimate
If the market is ranging as it was the last 2 weeks there is absolutely no reason to use stop losses. I had a 500 pip drawdown on a long at 213 that became profitable after 2 weeks and I made interest and also 400 pips going down. I changed the way I trade (not using SL) and i am making mucho more money. I agree, most traders do not know how to do it right. Instead of a SL just put a hedge I say.
What is a good way to hedge? When to start/stop? Your method? Or any on other FF threads?

Thanks,
Dan
  • #1,548
  • Edited 7:37pm Feb 16, 2008 7:20pm | Edited 7:37pm
Quoting kalldan
What is a good way to hedge? When to start/stop? Your method? Or any on other FF threads?

Thanks,
Dan
Hi Dan,
There is no method really ... I go by feeling. Let me elaborate.

Many times there is alot of market noise that temporarily interferes with your trade and after the "disturbance" your trade goes your way and becomes profitable.

For example :
You enter a trade LONG at the 50% fib of a move. The pair keeps going down you’re your entry and you postulate the it could hit the 68% or 100% and then bounce back above your entry price.

You bet that there is no good reason for it to go down and it WILL BOUNCE BACK UP. So you place a hedge 100? pips below entry for example. The Pair goes to the 100% retrace (300 pips below entry price for example) and bounces back violently above your original entry price. It goes without saying that you place a trailing profit stop on your hedge.

So you made money on the way down and also made money from your original trade.

Now this is where most people fail at this strategy.
If there is a BREAKOUT downwards andthe trader has already taken profit from their hedge they are gonna lose big.

The trick with hedging is that the pair has to bounce back towards your original entry price and your trailig stop on your hedge has to get hit. HOWEVER, The pair can hit your trailing stop on your hedge and shoot down afterwards.

As you can see it is not an exact science but in ranging markets, it is a good way of maximizing your profits.

While GBP/JPY is on a rampage in any one direction outside of the recent RANGE I go with the trend and use stops.

If the pair does break out the range and there is no sign of it bouncing back then close your hedge and take your 100 pip loss. In this case it was just like you got stopped out.

Alot of traders cannot handle lingering hedges as it is a constant thorn at your side and rightly so :-)
I have learned to live with this pain because it makes me more profits.
To each his own. You gotta trade the way that feels right for you.

Hope this helps!


Danny
  • #1,549
  • Feb 17, 2008 1:15am Feb 17, 2008 1:15am
Danny, well said.

It's all about patience with hedging.

I have 3 short hedges from last week going.
3 shorts from the 209 area, that were well into profit at 207.5, on the way to TP out around 206.8, when Buffett offered up the Bond Ins. help, I was asleep, being in PST and got boned...... hence me wanting it to hit 209.

I hedged long at 200 pips up, so 211.
Rode that long up to 213.... profit, 200 pips.
Went short at 213, 212 and 211 and have been riding it down ever since.

I'll wait for it to hit 209 this week.
I'll be out of my shorts, which i hedged and sat on for a week.

And, in the process added about 800 pips to my account, while still taking some scalp trades in the mix.

It's all about patience, patience and more patience.....

100 pips as a hedging point is good.
I usually do 200, as this pair moves so much, you're bound to get out with profit with some patience.

This is really only the 2nd time in the last two months, I've done it though.

kj
  • #1,550
  • Feb 17, 2008 1:39am Feb 17, 2008 1:39am
Quoting kujo17
Danny, well said.

It's all about patience with hedging.

I have 3 short hedges from last week going.
3 shorts from the 209 area, that were well into profit at 207.5, on the way to TP out around 206.8, when Buffett offered up the Bond Ins. help, I was asleep, being in PST and got boned...... hence me wanting it to hit 209.

I hedged long at 200 pips up, so 211.
Rode that long up to 213.... profit, 200 pips.
Went short at 213, 212 and 211 and have been riding it down ever since.

I'll wait for it to hit 209 this week.
I'll be out of my shorts, which i hedged and sat on for a week.

And, in the process added about 800 pips to my account, while still taking some scalp trades in the mix.

It's all about patience, patience and more patience.....

100 pips as a hedging point is good.
I usually do 200, as this pair moves so much, you're bound to get out with profit with some patience.

This is really only the 2nd time in the last two months, I've done it though.

kj
Kujo Do you trade ey at all....
  • #1,551
  • Feb 17, 2008 1:41am Feb 17, 2008 1:41am
Very interesting discussion on hedging...thanks guys.

I like the idea of using hedges in lieu of a Sl. Would love to hear more about how people use this.
  • #1,552
  • Feb 17, 2008 2:18am Feb 17, 2008 2:18am
Quoting kujo17
Danny, well said.

It's all about patience with hedging.

I have 3 short hedges from last week going.
3 shorts from the 209 area, that were well into profit at 207.5, on the way to TP out around 206.8, when Buffett offered up the Bond Ins. help, I was asleep, being in PST and got boned...... hence me wanting it to hit 209.

I hedged long at 200 pips up, so 211.
Rode that long up to 213.... profit, 200 pips.
Went short at 213, 212 and 211 and have been riding it down ever since.

I'll wait for it to hit 209 this week.
I'll be out of my shorts, which i hedged and sat on for a week.

And, in the process added about 800 pips to my account, while still taking some scalp trades in the mix.

It's all about patience, patience and more patience.....

100 pips as a hedging point is good.
I usually do 200, as this pair moves so much, you're bound to get out with profit with some patience.

This is really only the 2nd time in the last two months, I've done it though.

kj
What if price doesn't reach 209 and heads for 214-217? hedge again?
Trade what you see, not what you think.
  • #1,553
  • Feb 17, 2008 6:09am Feb 17, 2008 6:09am
Quoting ultimate
For example :
You enter a trade LONG at the 50% fib of a move. The pair keeps going down you’re your entry and you postulate the it could hit the 68% or 100% and then bounce back above your entry price.

You bet that there is no good reason for it to go down and it WILL BOUNCE BACK UP. So you place a hedge 100? pips below entry for example. The Pair goes to the 100% retrace (300 pips below entry price for example) and bounces back violently above your original entry price. It goes without saying that you place a trailing profit stop on your hedge.
This makes sense but if you instead close your long position after 50-100 pips loss. You enter the same short as in your example. And when it hit's the bottom and bounces back up, you go long at that bottom. Even more profit .

After some thought though I realize that in the case of hedging you can add lots to your position at the bottom there instead.

Only problem with both methods is that you don't know exactly where it will bounce.

I think hedging can be quite dangerous for a newbie like me, but I can try and learn it on demo of course
  • #1,554
  • Feb 17, 2008 9:10am Feb 17, 2008 9:10am
Quoting karmostaji
What if price doesn't reach 209 and heads for 214-217? hedge again?
If price does not reach 209 and it reaches 210 for example ... and you see that it does not want to budge a pip below and all factors point to movement up then you go LONG the number of lots of your shorts and take profit at 100 pips up or higher. That way you just broke even.

What I do is I go long TWICE the number of lots of my shorts and if the price goes up 100 pips I just made money also.

The way I see it is that the market moves in waves 100 pips up , 200 pips down etc ... By trading this way you make money in both directions and you do not try to "guess" which way the pair will go.

"The market eventually corrects itself" is constantly in the back of my head.
Keep in mind also that the pair is now in a downtrend heading for 200 at least. With all the problems in the US any event can spark a huge downmove.
  • #1,555
  • Feb 17, 2008 9:16am Feb 17, 2008 9:16am
Quoting SimonJ
This makes sense but if you instead close your long position after 50-100 pips loss. You enter the same short as in your example. And when it hit's the bottom and bounces back up, you go long at that bottom. Even more profit .

After some thought though I realize that in the case of hedging you can add lots to your position at the bottom there instead.

Only problem with both methods is that you don't know exactly where it will bounce.

I think hedging can be quite dangerous for a newbie like me, but I can try and learn it on demo of course
Very good! That is exactly what I do. Like you said I double up at the bottom. I think of it as a separate trade. I was wrong the first time going long and there is LESS chance of me being wrong the second time (super overbought, second strong support etc ...)
  • #1,556
  • Feb 17, 2008 9:26am Feb 17, 2008 9:26am
Quoting kujo17
Danny, well said.

It's all about patience with hedging.

I have 3 short hedges from last week going.
3 shorts from the 209 area, that were well into profit at 207.5, on the way to TP out around 206.8, when Buffett offered up the Bond Ins. help, I was asleep, being in PST and got boned...... hence me wanting it to hit 209.

I hedged long at 200 pips up, so 211.
Rode that long up to 213.... profit, 200 pips.
Went short at 213, 212 and 211 and have been riding it down ever since.

I'll wait for it to hit 209 this week.
I'll be out of my shorts, which i hedged and sat on for a week.

And, in the process added about 800 pips to my account, while still taking some scalp trades in the mix.

It's all about patience, patience and more patience.....

100 pips as a hedging point is good.
I usually do 200, as this pair moves so much, you're bound to get out with profit with some patience.

This is really only the 2nd time in the last two months, I've done it though.

kj
The range for this pair in the next few weeks should be 203 - 217 (Auslanco VS Karmo). Of course we should try to buy around 203 and short at 217. When it reaches those outer edges that is when hedging become dangerous. Going long near 217 is a nono and short around 203 is a nono.

kj, post is directed at the thread and hope I am not intruding Sith Lord as this is the QQE thread not a hedging thread.
  • #1,557
  • Feb 17, 2008 9:30am Feb 17, 2008 9:30am
Quoting ultimate
If price does not reach 209 and it reaches 210 for example ... and you see that it does not want to budge a pip below and all factors point to movement up then you go LONG the number of lots of your shorts and take profit at 100 pips up or higher. That way you just broke even.

What I do is I go long TWICE the number of lots of my shorts and if the price goes up 100 pips I just made money also.

The way I see it is that the market moves in waves 100 pips up , 200 pips down etc ... By trading this way you make money in both directions and you do not try to "guess" which way the pair will go.

"The market eventually corrects itself" is constantly in the back of my head.
Keep in mind also that the pair is now in a downtrend heading for 200 at least. With all the problems in the US any event can spark a huge downmove.
That's risky and dangerous and it will work only in normal market conditions, what if you suddenly get a panic selling and BOOM, then what?
Trade what you see, not what you think.
  • #1,558
  • Feb 17, 2008 10:00am Feb 17, 2008 10:00am
Quoting karmostaji
That's risky and dangerous and it will work only in normal market conditions, what if you suddenly get a panic selling and BOOM, then what?

What if the price explodes upwards after the panic? You just do not know. I let price trip my limits

Scenario 1:
You have a short 1 lot at 209. Price come down from the heavens until 210 and you go long 2 lots. Price then goes to 211 and starts falling past 209. Your breakeven limits or trailing stops get tripped on the 2 lots at 210 long.
Your 209 short starts being profitable.

Scenario 2:

You have a short 1 lot at 209. You go long at 210 but price instantly blows past 210 and goes under 209. Set your breakeven at 209 and your trailing stops. If price starts falling below 208 for example and you can see that it is going to 206 short another lot.

The trick is the the price has to be above 210 or below so you can set your break evens or trailing stops.
You have to let price action decide which way your limits get tripped.

It is an unorthodox way of trading but it works very well for me because of the whipsaws in price. I used to get stopped out all the time and now I know better.
  • #1,559
  • Edited 1:30pm Feb 17, 2008 12:56pm | Edited 1:30pm
Quoting karmostaji
What if price doesn't reach 209 and heads for 214-217? hedge again?
Karmo,

No. The hedge of 200 pips is still in place. As it falls and hits BE, it comes off.
Then, if it turns around at 210, I'll double the hedge trade and at BE take it off.

There are many ways to handle it.

I know that the trend is UP.
So, I put the long hedge on, and then added another trade for the ride up to 213 area.

I then cash that out on the turn around.

I'll ride this down, as low as it'll go, which I think will be 208.0 area by Tuesday NY session, if not sooner.

Cash out the shorts and ride her up to 217 area.

I'll never remove the hedge until the trades that are against the trend are done and then let the trend take me back to BE/Profit on the hedge trade.

Mind you, this is NOT how I normally trade.
Buffett boned me last week.........
  • #1,560
  • Feb 17, 2008 12:59pm Feb 17, 2008 12:59pm
208, which will just be a poke down to that area should be the low, going from Daily charts.

208.9 is a 61.8 retrace from this last move up.
WE should probably see a spike below that, but not a close below.

IF the Dow tanks on Tuesday due to Options Expiration, then we could see 205.

I'd be shocked if we see 203, but I will have NO problem if that is the case.
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