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CFTC + NFA: End Of Hedging?

  • #81
  • May 6, 2009 6:20pm May 6, 2009 6:20pm
quote=smittens4212;2717561 Yes, it's a valid argument. Eliminating hedging can screw things up for ticket-trading platforms (Metatrader brokers, and maybe a few others), and hedging may make things more simple than not doing so, depending on the strategy and platform.

Not sure what you expect from the picture though, why not post the actual file so we could see what the trades are and see for ourselves why hedging is or isn't better?

I can post the file. In fact, I thought nobody would be interested. I don't think it is worth the trouble going into my trading history. It doesn't make much sense because I experimented a lot, until I built something that works for me (now threatened by NFA). But I will survive again. (...)
  • #82
  • May 6, 2009 10:57pm May 6, 2009 10:57pm
Seems like the thread is getting repetitive and slightly childish as well as drifting away from the topic. I'm happy to have a rational debate about what some of you think is hedging but simply saying you're making a ton of money and calling people names doesn't really support your argument!

Having equal long and short positions on the same pair means you are flat, you have no exposure and therefore no potential to profit, in fact it's going to cost you money in swap and spread. It's not a complicated concept, all it takes is some logical thinking to understand that a strategy which incurs costs but has no profit potential simply isn't going to make you any money!

lol, I can't believe I'm even having this discussion, it's surreal!
  • #83
  • May 6, 2009 11:54pm May 6, 2009 11:54pm
LOL, here we go again. This whole issue has already been discussed in another thread.

There's a way to replicate "hedging", by only ever being long OR short in the same pair. You'll make exactly the same number of pips, and pay less swap, and - in certain situations - spread.

If the NFA wants to eliminate TP and SL orders, there's a way around that, also.

All of this without having to change your broker!

No tricks, no gimmicks, just highly sophisticated mathematical techniques. 100% proven and guaranteed.

For anybody who wants to learn these amazing, unprecedented, revolutionary secrets, send me a check for just $1 million, and I'll sign you up for my EXCLUSIVE three month seminar. I'll even throw in free lunches on alternate days. But hurry, there's less than 100 places left, and seats are selling fast! Don't miss this once-in-a-lifetime opportunity to learn how to beat the NFA at their own game. I'll show you clearly, step-by-step, how to reduce more than 100 pages of Einsteinian math into a few simple formulae! By the time you've finished the course, both NFA and your broker will be quaking in their boots. Why? Because you'll make at least as much money as you ever did hedging, and it's your broker who'll be paying the difference. I absolutely guarantee this, or I'll refund every cent of your seminar fee. And you can even keep the lunches as my free gift!
  • #84
  • May 7, 2009 12:15am May 7, 2009 12:15am
lol,

Ah, the old 'free lunch' ploy, we're not stooopid everyone knows there's no such thing as a free lunch. I'll have the seminar if it doesn't come with the free lunch otherwise I ain't falling for it!
  • #85
  • Edited 3:27am May 7, 2009 1:51am | Edited 3:27am
Quoting pipmutt
Seems like the thread is getting repetitive and slightly childish as well as drifting away from the topic. I'm happy to have a rational debate about what some of you think is hedging but simply saying you're making a ton of money and calling people names doesn't really support your argument!

Having equal long and short positions on the same pair means you are flat, you have no exposure and therefore no potential to profit, in fact it's going to cost you money in swap and spread. It's not a complicated concept, all it takes is some logical...
I have no desire in explaining to you how offsetting is used profitable , i prefer to let you lose.
hahaha

pipmutt, all succesful hedgers will have a big laugh at your afirmations, use of offsetting are not made simple like you presented ,that's why you losed by offseting , hahahah, you have to have a minimal strategy , grand-pap, i said that here about 8 times, so it's useless to explain to you anything because it's obvious it's a waste of time, you can't comprehend it , pap, you are on a lower level of IQ, ahhahahahah.

And about calling names you are the ones who begun to do it so I'm sorry but all I do is to send those back to you were they belong , grand-pap.

- Even with the real fact that there are successful offsetting circumstances one can use , the proof of existing threads you keep dening so it makes no sense to talk to you or to proof to you anything, pap.

I won't lose my time to explain to you how to use offsetting positions , you could just search the forum , take a pill so your hands won't shiver anymore, so you could use the keyboard hahaahah,grand-pap .

Besides it DOESN'T MATTER if offseting position ARE or not profitable, all it matters is about restricting the possibilities one can do with his earned money and that is claimed as help by NFA.

Lots of people weren't happy about this rule.
Is their own money , they didn't needed a rule which limits the way they can trade with their own money, it doesn't matter if offseting is profitable or not.

Why brokers are still allowed to offset traders positions ? 95 % off hedging orders are done by brokers not by traders ..
NFA was supposed to keep an eye on brokers in the first place : ABOUT THIS is the thread , not about if offseting or hedging is profitable , pap.


Many pips , grand -pap
  • #86
  • May 7, 2009 3:28am May 7, 2009 3:28am
Quoting pipmutt
Having equal long and short positions on the same pair means you are flat, you have no exposure and therefore no potential to profit, in fact it's going to cost you money in swap and spread. It's not a complicated concept, all it takes is some logical thinking to understand that a strategy which incurs costs but has no profit potential simply isn't going to make you any money!
Pipmutt, you're absolutely correct.

It's amazing the number of people - some who claim to be experienced traders - who can't see: why it's preferable to be out of the market, rather than than hedged (in the same pair); that any method of hedging, no matter how complex, can easily be replicated, pip for pip P/L-wise, by using a non-hedging one; the reason being that it's the net position that ultimately determines P/L, and all order types are nothing more than a vehicle for adjusting that position.

My last post was intentionally facetious - the underlying concept is actually very simple. It's one of those scenarios - a bit like Gambler's Fallacy - where people either see it or they don't. The latter will never understand that the restrictions lie not with the NFA ruling, but with their own self-imposed style of narrow minded thought.

Two of the biggest blinkers are: (1) traders become preoccupied with the P/L of their individual positions, instead of the overall bottom line; and/or (2) they fail to take unrealized P/L into account (i.e. they believe that a loss is not a loss until a position is closed).

There is absolutely no advantage, either mathematically or P/L-wise, to be gained from hedging in the same pair. Indeed, no form of MM - in itself - can ever deliver an edge.
  • #87
  • Edited 4:03am May 7, 2009 3:45am | Edited 4:03am
Quoting hanover
Pipmutt, you're absolutely correct.

It's amazing the number of people - some who claim to be experienced traders - who can't see: why it's preferable to be out of the market, rather than than hedged (in the same pair); that any method of hedging, no matter how complex, can easily be replicated, pip for pip P/L-wise, by using a non-hedging one; the reason being that it's the net position that ultimately determines P/L, and all order types are nothing more than a vehicle for adjusting that position.

My last post was intentionally facetious...
It's your and others opinion and i don't mind it , everybody is free to have his own opinion.
Other people have other opinion , you know...


You keep not getting it , it doesn't matter if offseting is profitable or not , it's traders earned money if they want to hedge why limit only traders options they have , what help is that when somebody is limiting the options somebody else has, , is their own earned money ,why not limit also brokers permission to hedge too,

hanover , you keep repeating hedging is not profitable, even so, so what , THAT is not the issue ...the issue is limit traders rights, and not also the right of a broker to hedge, traders were anyway only 5 % in the big scene of hedging, is known brokers are the big offsetters of all traders positions, mister experienced trader

doesn't matter if hedging is or not profitable


About that million you beg after, nobody will give you more than a dime..
keep dreaming

Many pips
  • #88
  • May 7, 2009 4:05am May 7, 2009 4:05am
For dude above who said he sees plenty of opportunities to go long and short throughout the day and wants to exploit them:

First, try this - when you see an opportunity to go long - buy, when you see and opportunity to go short - sell. Set opposite orders of same size at SL and TP values for that entry. Your net position may even remain short when you're going long or long when you're going short, because you made other entries as well, it doesn't matter one little bit. Except that you might consider it simpler to view the result of each entry seperately - as a trade, but then again... is it really simpler to follow all your positions separately ? Aspecially on those occasions when the market is on a run against you and you have to quickly fix things and get out ?

Second, or should I say secondary - as each has his own style of trading, but still as a general advice - fx is a slimy, treachourous b*tch like none you know... So, in your free time, think about it - do you really make as much after all the hard work of that many trades per day as you could make by just waiting for that one or two perfect opportunities, and then go about doing something fun and forget about the market till next time ? More trading does not in general mean more profit (again, barring the more rare exceptions maybe).

Cheers
On the path to Enrichment.
  • #89
  • Edited 4:39am May 7, 2009 4:09am | Edited 4:39am
Quoting Redox77
It's your and others opinion and i don't mind it , everybody is free to have his own opinion.
Other people have other opinion , you know...


You keep not getting it it doesn't matter if offseting is profitable or not , it's traders earned money if they want to hedge why limit only thei roption and not brokers permission to hedge too,

hanover keep repeating hedging is not profitable, so what , THAT is not the issue ...the issue is limit traders rights, and not also the right of a broker to hedge, they were anyway only 5 %...
Fair enough, I totally agree that anybody is free to see things however they wish. But for me, math doesn't lie: 2+2 will always equal 4, no matter what the angle is. I'm not saying "I'm right", just that the math that underlies hedging speaks for itself.

I wasn't targeting you specifically; there seem to be a lot of folk who believe that hedging in itself is profitable.

There are easy ways around the NFA no-hedge ruling if traders want to think outside of the square. There's no need to change brokers, or even open a second account.

Your goals may be different to mine, that's your prerogative. My only goal in forex is profit, and (for better or worse) I have no real interest in discussing anything beyond the math and mechanics of trading. So I'll exit this thread here, and leave everybody to their conspiracy theories.
  • #90
  • May 7, 2009 4:09am May 7, 2009 4:09am
Quoting Redox77
hanover , you keep repeating hedging is not profitable, even so, so what , THAT is not the issue ...the issue is limit traders rights, and not also the right of a broker to hedge, traders were anyway only 5 % in the big scene of hedging, is known brokers are the big offsetters of all traders positions, mister experienced trader
Brokers "hedge" the positions of their traders against each other. They then take a position on the market - in ONE direction, according to the net position that results from it all. Why talk so convinicingly about something you abviously don't know ?
On the path to Enrichment.
  • #91
  • Edited 4:30am May 7, 2009 4:19am | Edited 4:30am
Quoting Jurrasic
Brokers "hedge" the positions of their traders against each other. They then take a position on the market - in ONE direction, according to the net position that results from it all. Why talk so convinicingly about something you abviously don't know ?
LOL
I said the same thing, they hedge traders positions , can't you read ?

I agree , that's exactly what they do .

It is one way position , but still a BIG hedge against traders position, is that " beneficial for the economy" ? , because one of the reason for the rule was that "is not beneficial for the economy"....taking in consideration that what brokers do is a BIG opposite position ...so drawing a line is just a big hedge against the net possition of all traders..


many pips
  • #92
  • Edited 5:39am May 7, 2009 4:33am | Edited 5:39am
Quoting Redox77
LOL
I said the same thing, they hedge traders positions , can't you read ?

I agree that's exactly what they do .

It is one way position , but still a BIG hedge against traders position,
Dude... you've got some serious problems...

The broker doesn't really hedge anything, they take the individual positions of all their traders, calculate the net position they're in and place an order on THAT on the market. Hedging, as defined by: PLACING OFFSETTING POSITIONS ON THE MARKET - NEVER takes place. hedge - means hedge, "hedge" as I put it above - means sum.
On the path to Enrichment.
  • #93
  • May 7, 2009 6:47am May 7, 2009 6:47am
Quoting pqt
Certainly I hope you are jesting, sir.
Following your logic,the National Firearm Association should ban the use of bullets in guns while still allowing you to own guns, since without bullets, the guns are harmless and even kids can own them, right?
Not a great analogy because without bullets the guns are useless to the people who know what they're doing. In forex the people who know what they're doing would never even consider hedging in the way that's been described in this thread therefore it makes no difference to them whether NFA ban it or not, the only people the new rule will affect and protect are the inexperienced. But.....

...if the people who have access to loaded guns are a mixture of those who do and those who don't know which is the dangerous end then yes, in the interest of the ones who might accidentally shoot themselves because of their lack of experience or common sense banning bullets would obviously be the only solution and a typical case of the protection of the minority spoiling it for the responsible majority. Personally I would say let them shoot themselves but then I'm not particularly tolerant of fools!
  • #94
  • Edited 7:26am May 7, 2009 7:15am | Edited 7:26am
pip-mutt-logic , LOL , you better buy another pair of glasses and open your eyes about the overdose requotes,and " invalid prices " errors the broker uses to screw you

We don't needed this no hedge protection we are not children , we know we can lose all in forex , we also know from forums that 95 % lose,..

also:
beginners are warned by forum members they should demo first for a couple of years..

- Traders are not children pipnutt, besides nobody is stupid to jump from beginning with a 100,000 $ account to trade forex, oh you are free to do it if you want , go ahead ahhaha.
..we all usual open a micro-account first .


I didn't need protection against hedging , against what , against a lousy 3 pip spread loss...you are ridiculous pip-logic,


Protection is needed against brokers requotes , artificial spikes,stop hunting , artificial dissconnections , forums are full of complains like that.

I get lots of "invalid prices" when want to fill an order, when ones account is increasing i heard complains brokers begin to delay order execution..

I also saw metatrader plugins screenshots on forums which brokers can control order execution delay with...
and lots of things to screw traders ( YOU, pipmutt-logic ,hahahahah ) hahaha.

Don't needed protection against a lousy 3 pip spread on GBP- USD , which i lose by hedging.


Many pips
  • #95
  • May 7, 2009 7:18am May 7, 2009 7:18am
Quoting pipmutt
Not a great analogy because without bullets the guns are useless to the people who know what they're doing. In forex the people who know what they're doing would never even consider hedging in the way that's been described in this thread therefore it makes no difference to them whether NFA ban it or not, the only people the new rule will affect and protect are the inexperienced. But.....

...if the people who have access to loaded guns are a mixture of those who do and those who don't know which is the dangerous end then yes, in the interest of...
The hedging feature is a tool and the fact you don't or can't use it is irrelevant. If you don't know how to use chopsticks, would you call the 1/3 of the world population who use them fools? After all, you can achieve the same purpose (getting food into your mouth) with different utensils, or even with your bare hands!
If the NFA wants to protect the trader like they pretend, there are other things much more worthy, and they do come up with some good idea like prohibiting the MM to change their prices after the fact.
But frankly, banning hedging is one of the most moronic scheme they have ever thought up.
  • #96
  • May 7, 2009 7:23am May 7, 2009 7:23am
Quoting pqt
The hedging feature is a tool and the fact you don't or can't use it is irrelevant.....
I see we've come full circle and are back to the argument about the (lack of) benefit of this type of hedging. I have no further comment on that subject, I've already said what I think.
  • #97
  • Edited 7:42am May 7, 2009 7:30am | Edited 7:42am
Quoting Redox77

Protection is needed against brokers requotes , artificial spikes,stop hunting , artificial dissconnections , forums are full of complains like that.
I agree, with the exception of requotes if those things are actually happening intentionally and not just a conspiracy theory or technical issues then sure, but how would you suggest NFA write up those rules and how would they police them?

They're fighting the fights they can win first which I think is sensible.
  • #98
  • May 7, 2009 11:56am May 7, 2009 11:56am
Of the 4 or 5 threads floating around on the same general topic, this one was the most recently active so I'll post here.

What is your guess as to what's next on the CFTC/NFA agenda?

My top 2 guesses:

1. Mandatory minimum account size and margin requirements.

2. Mandatory minimum lot sizes, i.e. the end of nano/micro lots.

Sorry if this has already been discussed.
  • #99
  • May 7, 2009 12:50pm May 7, 2009 12:50pm
Quoting opie999
Of the 4 or 5 threads floating around on the same general topic, this one was the most recently active so I'll post here.

What is your guess as to what's next on the CFTC/NFA agenda?

My top 2 guesses:

1. Mandatory minimum account size and margin requirements.

2. Mandatory minimum lot sizes, i.e. the end of nano/micro lots.

Sorry if this has already been discussed.
As well as the ones you mentioned, how about security of deposits to bring this market in line with other markets? SIPC? FDIC?

And an agreed universal reference price to settle disputes, say Reuters? Mind you that won't be so important now that they've limited price adjustments.

Free air miles with every lot traded?

I wish the FSA would take the initiative and introduce some rules, we're still in bandit country here in UK!
  • #100
  • May 8, 2009 7:36am May 8, 2009 7:36am
lol $20000 to $9000? Where did those numbers come from?

Are you a schizophrenic or something?

good trading redox, you're going to need it

countdown until you make another retarded post.... 5.. 4...

P.S. I made 10000% trading yesterday, you see, my strategy... it's in the forums somewhere.. go search for it
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