Hedge Trading

So they are NOT correlated huh?

http://www.shareapic.net/preview3/007476326.gif http://www.shareapic.net/preview3/007476328.gif http://www.shareapic.net/preview3/007476331.gif http://www.shareapic.net/preview3/007476332.gif http://www.shareapic.net/preview3/007476333.gif

Also i dont think that people have properly understood what Bazza is saying (while very simple)..he's not saying you can enter when one retraces on the other side or stuff like that..he said you enter in both pairs in the same direction..since one will usually go one way and one the other, the two opened positions should balance themselves without risking big losses...so you just wait for a "disparity" that gives you a small gain and close both positions...

very simple, and honestly i think it could work.
i'll try for sure..

omg what's that hedging/gridding madness ?

using 50% of the account ?!? u r gonna be in deep trouble, u are the 2443587345-th trader i've seen doing this "hedging". and if u "know" where the market will move, why don't u trade only one pair, instead of two? to make some profit from 2 trades, u should predict correctly what's gonna happen in each of the pairs. of course the cross-rate EUR/CHF would be helpful, but this "system" won't save anybody from his onw bad analysis and MM.

This is bullsh*t, sometimes i even think that brokers start threads like these unfortunately, newbies are too naive and easily believe in nonsense like that.

yes, i'm paranoic and i'm deeply convinced that brokers' interests are invloved in some of the threads

Did you even read the thread? The only advantage of this strategy is that you dont need to know where the market will go, or at least you need it a lot less.

So. If you don't need to predict the direction, you depend on market luck. Well, well ...

CLOSE your eyes WIDE, trade this "hedge"-system for 6 months and show us the results. And then come again and lighten us about this great system . that has blown thousands of accounts.

Maybe missing something kiddie?
I never said this sistem would work..i think it theoretically can..but between theory and reality a lot changes..so noone knows, you being one of us.

But again if you think anyone here is saying all you have implied, its quite obvious that you havent understood anything.

however, i quarantee you this "system" wont do anything positive to anyone's account. I've seen 1,2,3 ... 34 321 similar trials of taking opposite positions in currency pairs, which are incorrectly supposed to move mirror-like, just because they are USD-pairs.

don't take it personally, this method just doesn't work.

Its ok, it may not work in a real market condition.
but i dont see anyone being "naive" just because he is willing to have fun with some wacky method on a demo account.

Today I tested Bazza's "naive" system for the first time on 2 demo accounts...
i opened one long on eurusd and one long on usdchf..i opened those 2 orders contemporarely but at random times.

First couple of "random" operations were done on a demo account..i closed them manually at +16$ in gains when i woke up..the second and third couple o random orders were done on a completely different platform and broker, always in demo..they resulted in +10$ and +5$..this time closed automaticly by an EA that simply closes all positions when the equity reaches your defined point.

In the end my balance went up of 31$ this means ABOVE the 6 paid spreads.

3 wins out of 3 tries on first day AND WITHOUT ANY KIND OF ATTENCION about what was going on in the market.

Here's my update since 4/06/08 with a $1K increase setting for closing all positions. Starting balance was $50K. I also did a few scalps when in profit for a few hundred dollars. How does one go about attaching the closed and open transaction history report? It says that it is an invalid file type.

thx icfx.. is this Ea you posted another version of the "CloseAllAtEquityLevel" EA? it seems to have the exact same number of settings..

Is this better for some reason?

It could be the same EA. You enter the specified dollar amount for all positions to close. I really like this, however, I don't know how deep the draw down can get. Will need to forward test and see what happens. Good luck!

buddy i've tried this and many other combinations of "hedge" trading and i can honestly tell u, u'll blow up ur account someday in the future.
well, having said that, u may enjoy profiting for the time being, if so, take money out if u happen to make 30% profit, ur luck wont continue for long after u make that much.
if u really wanna do this kinda "heding" (it's not truely hedge though), u have to study the long term trend of eur/chf, 'coz basically u r buying eur/chf. and then besides pip value, u also have to consider spread difference and average daily range, especally ADR 'coz the two pairs walk different distance everyday. as for now, the eur/usd ranges 20pips more than usd/chf, so to minimize risk, u actually need to buy more lots of usd/chf, this will reduce risk but also reduce profit, so it's your call.
Doing this kinda "hedging" is not recommended in the long term. to share some of my experience, i once gained over 30% on gbp/jpy, gbpusd, usd/jpy "hedge", i calculate pip value, spread difference, average daily range, analyse the trend of the 3 currencies, put them in a basket so i can make swap profit everyday besdies luck of making trade profit, then i calculate total lots so that the margin level will be more than 300% after the new basket is in, and i formulate it to compound every 3% profit, I made an EA to do all that so my emotion wont influence the trade...i do a lot more homework than you my friend, but guess what? it BLOWED UP MY ACCOUNT in the end!
I analyzed my final loss and the No. 1 killing reason is: NO STOP LOSS! u think u r hedging so u won't put stop loss, if your luck fades, ur drawdown grows, because u think u r hedging and u believe (or hope) one day it'll turn to profit again, u'll just let the drawdown run, and as it grows, it'll from time to time back to the positive, for example, from -10% to +3%, then from -12% to +2%, -15% to +2%, then u'll think next time when it reaches +3% again i'll close it...my friend, don't let it fool u, it will never come back! it will only go deeper and deeper and finally it'll suck out all you pocketed previously and only much more!
So, if luck is on your side now, and if you make 10% in a month or whatever better than bank interest rate p.a., stop for a while, you already made huge profit. If you insist to continue and later incur a same drawdown, definitely STOP it! Don't rely your hard earned money on pure hope. Stop your loss even you think u r "hedging". (it's really not hedging)
Good luck!

Hey Boos..thanks for your answer.
Dont worry..i'm just testing on a couple demo accounts, for the time being i'll receive no harm from this.
While i appreciate your thoughts and believe your words, i also know that i'm a really really prudent and creative person..

even IF i'll ever decide to try this live, wich may not ever happen, it will be in maximum security and with expendable money..

However i'm just into Forex froma few months, i'm just experimenting around and learning things from various perspectives. I'll not go kamikaze into the market, that's for sure..

Bazza, Thank you for posting this message.
This type of tradding is called Pseudo-Hedge. Yes it is possiable to make money on this, but there are many rules you have to follow. Please contact me direct and I will share what I know privatly.

Pip Grabber

Hi Pip Grabber,

i already pm you.

Thanks.

Zu

Bazza: You should take a look at this post: http://www.forexfactory.com/showthread.php?t=85097

A little more constructive thread on "the hedge"

Dear Thread,
Check out:
http://www.forexfactory.com/showthread.php?t=95721
It seems to be the most constructive eurusd/usdchf thread so far.

Enjoy.

Lenoxer

well for what its worth i can confirm it doesn't work. I did everything possible i would calculate the corelation between the pairs on a daily and hourly timeframe I'd only enter if the corelation was atleast 90% on the houlies else i'd stay out, I checked trends with indicators and statistics and went long or short depending on which pair had higher volatility. In short I tried everything possible. Worked like a charm on my demo I went live with a$100. I'd aim for just 15 pips profit between the two which would translate to 0.5% of my account. Worked like a charm sometimes I'd hit the profit within an hour and sometimes it would take a day or two. My unrealiosed drawdown used to vary but never exceeded a 100 pips I was never worried coz i believed the hedge would keep it in check. Tripled my account sometimes 6% a day!!

One fine day the drawdown just went on increasing i calculated the corelation to be around 88% and entetred as usual but it decoupled in the wrong direction and just went on going in that direction (maybe some news or something) it went so far apart I finally panicked and pulled the plug with $32 left in my account.

Guys just trust me on this it won't work. If it was so easy lots of ppl would be rich. Save your money try something else.