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Proposal to phase out Hedging

  • #181
  • May 10, 2009 10:06am May 10, 2009 10:06am
Quoting Jairo
Maybe the "million dollar strategy" is a grid that I have experimented a few years ago. It is always hedged. All the time. As soon as it closes one position in profit, it opens another, so the position is always net flat. As the market goes up and down, the grid continuously captures profit in both directions. Equity and balance grows continuously while the position is permanently net flat. Looks perfect. But it isn't. It works while the market remains in a range or the range widens gradually. At some point, a strong move out of the range blows the account.
So it's no different than any other similar strategy, any profit it banks is offset by losses, and on top of that it costs in spread and swap. In order to be profitable it needs to have a 'normal' non-hedged one-directional trade to cover losses, it seems like a pointless exercise to me somehow.

If there was potential merit in any of these strategies surely you've got to ask yourself why NFA, institutional investors, and brokers themselves, as well as a whole host of experienced traders say there isn't any financial benefit over trading normally. Apparantly they're all wrong yet there's not one person who has come up with anything of any substance to support that, not even for a million dollars in prize money!

As far as I can see the debate is pretty much over, it's probably best to leave the reader to decide
  • #182
  • Edited 11:17am May 10, 2009 10:14am | Edited 11:17am
Quoting smittens4212
redox,

. If you really have a million dollar strategy,
I didn't won nothing, i don't have a real account
but on demo hedging was an aid for me,
when i losed , i losed due a single unhedged position.

When I hedged , some times both position were winners, so over all , i won by hedging.


Quoting smittens4212
redox,
you should be making money, not spending your time in forums. Time is money brother! I have an excuse to spend time here at least-- a job

Happy trading, let me know how that 'million dollar' system works out LOL
Keep waiting , i won't tell ya..

LOL, hedgers are making money , otherwise they wouldn' have had exist, also their posts wuldn't have had exist,
i was posting while watching the charts anyway , ..

but I agree , it's a loss of time to spend my time on this thread ,I was doing it while watching the charts anyway, , and i''ll do like other common sense traders, did :

leave you here , stucked in this thread

If you count the number of both sides you on hedging threads ,you will see it's like 50 to 10 , for the hedgers so we WON anyway.

More than that , those 10 who are claiming hedging is no profitable , or at least brings no aid to a trader, are more like 3 to 5 which keep saying math is with them , well , sorry it just isn't , hedgers EQUITY accounts proofs it, at least if no profit , by hedging you lose ONLY a spread, but


WHY lose my time here ?

So be it , believe what you want,
I have more better things to do that to talk to you .


Game has ended and we won....
You can keep to play alone .

So there is no sense to lose my time here talking to you .

Quoting smittens
I have an excuse to spend time here at least-- a job
Ahhhhaaaaa, so your job is to post on this thread , ahaaaaa ..............

Keep posting happily

I have more important things to do than losing my time here.
  • #183
  • May 10, 2009 10:28am May 10, 2009 10:28am
Quoting pipmutt
So it's no different than any other similar strategy, any profit it banks is offset by losses, and on top of that it costs in spread and swap. In order to be profitable it needs to have a 'normal' non-hedged one-directional trade to cover losses, it seems like a pointless exercise to me somehow.(...)
You are almost right. In fact, equity grows steadily while the market goes up and down within the range, though you are hedged all the time. The math is simple: you accumulate losing orders in the borders. Those impact negatively on your equity. But you take profits in both directions all the time. The difference (increasingly positive in ranging markets) is accountable for the steadily increasing equity. The fact is that equity grows continuously, though you are fully hedged all the time. Even so, it is illusional, because a strong move will come and blow your account. It looks perfect while you don't see the flaw.

P.S.: my account was demo .
  • #184
  • Edited 11:13am May 10, 2009 10:53am | Edited 11:13am
Quoting pipmutt
Apparantly they're all wrong yet there's not one person who has come up with anything of any substance to support that, not even for a million dollars in prize money!



Why don't you say the truth ? See, it's nonsense to lose my time anymore on this thread

It was jones who was ready to show to Merlin hedging is profitable, but Merlin just didn't sustain LOL his offer:

See it here:

Quote
Apr 19, 2009 9:12pm
jones247
Member
Member Since Aug 2007
228 Posts

http://www.forexfactory.com/images/icons/icon1.gif
Hi Merlin,

I sure do appreciate the gesture. As a matter of fact, if you're willing to make it legally binding, I would absolutely honor your $1M offer.
Such an offer would probably intice me to share my hedging strategy. Afterall, it would be easier to collect $1M than 20% of your future earnings.

A correction to your statement above... IT IS NOT FLAT TO FLAT. The key to hedging against the same currency pair is to increase the lot size on the reversals without closing the open positions. I'm giving away volumes with this statement. If you are willing to agree to the context of the way I hedge, and still offer the $1M. I'm willing to disclose it. There are 3 key components to successfully hedging against the same currency. 1) Ability to have open long & short on the same currency pair at the same time; 2) increase lot size by legging in on the given side of the reversal & at the point of reversal; 3) need for a daily break-out that's a fraction of the daily ATR (although sometimes, depending on the number of progressions need to reach the profit target, it may take as much as 2 days).

Again, it's not "flat to flat". A flat to flat approach would be silly.

Walt
  • #185
  • May 10, 2009 11:52am May 10, 2009 11:52am
Quoting Jairo

P.S.: my account was demo .
Just as well

Demo is great for these types of things, I left an averaging strategy EA running for weeks, woke up one day and it had blown up! Fun to watch while it lasted though!
  • #186
  • May 10, 2009 12:10pm May 10, 2009 12:10pm
Quoting Redox77
See, it's nonsense to lose my time anymore on this thread
Sure is because you're not convincing anyone. Impress us all and shut us doubters up for good, you'll be the hero of all these hedging/nedging threads because no-one has been able to come up with the goods so far, not even for a million dollars....simple, just post one of your nedging trade sequences.

I know, I know, it's a million dollar strategy and you're not going to waste your time telling bozos etc etc etc

At the end of the day you can't argue with math, and math isn't on your side in this one I'm afraid.


I think this thread has probably run it's course and I doubt there's much more to be gained from it to be honest, it's in pain and needs to be put out of it's misery!

I'll leave you with this thought.....in a business where it's alleged the majority lose it's a good thing to be in the minority!


I'm off, c'ya
  • #187
  • Edited 12:45pm May 10, 2009 12:12pm | Edited 12:45pm
Quoting pipmutt
Sure is because you're not convincing anyone.

Like you are LOL
you convinced nobody either.

Besides there are more pro-hedging than a few the same anti hedging .

I lose my time on this no ending debate .

Another deny of truth coming from you, that's why makes no sense to lose my time here.
  • #188
  • May 10, 2009 1:42pm May 10, 2009 1:42pm
LOL

Redox's ONLY "proof" that hedging works is that people on here are complaining about not being able to hedge!



Quote
If you count the number of both sides you on hedging threads ,you will see it's like 50 to 10 , for the hedgers so we WON anyway.

More than that , those 10 who are claiming hedging is no profitable , or at least brings no aid to a trader, are more like 3 to 5 which keep saying math is with them , well , sorry it just isn't , hedgers EQUITY accounts proofs it, at least if no profit , by hedging you lose ONLY a spread, but


Where oh where is this mysterious proof of hedgers' equity accounts proving hedging works? I haven't seen one. The only person who has posted a screenshot of their equity was Jairo, who admits that hedging has a serious fatal flaw after he blew up his (demo) account.

Great "proof"!
  • #189
  • May 10, 2009 2:09pm May 10, 2009 2:09pm
The permanently hedged grid will blow the account, sooner or later and I think the user will not wait too much. Hedging is only an accounting option (costs a little more than the equivalent non hedged methods). Very convenient, depending on the TS used. The idea of increasing size on both sides on each step into the hedge puzzle is interesting, but eats up margin very fast. When you have no more margin to use, you are left with a near 50/50% probability of recovering your initial bet or getting a margin call.
  • #190
  • May 10, 2009 6:12pm May 10, 2009 6:12pm
IBFX had this No Hedge wrong.

I could not place a BUY STOP and SELL STOP now.

I know about the No Hedge thing, I have been trading on ECNs to know this. So tell me, how was the above wrong?

I also opened a BUY position and placed a SELL STOP 20 pips below (ala Stop and Reverse)- also no dice.

According to IBFX, this is exactly what to expect..

They got it all wrong... they screwed it..
  • #191
  • May 10, 2009 6:35pm May 10, 2009 6:35pm
Apparently, the IBFX NO HEDGE means

You cant make money without losing money as well.
ie, in order to make 100%, you need to lose 100% of the account as well.

Hmmm.. isnt that called HEDGE too?
  • #192
  • May 10, 2009 8:29pm May 10, 2009 8:29pm
Really? The "no hedge" thing is applied to stop entries too? Why not just OCO the other stop entry?

That's kindof messed up, I like stop straddles. I mean sure you can write an EA to get a similar effect, but market orders are bigger w/ the slippage.
  • #193
  • May 10, 2009 9:21pm May 10, 2009 9:21pm
I put an stop buy/and sell in oanda - no problems.

Actually, I have an open long order (oanda ) and I just place a stop short order, no problems. That is aside the normal stop/limit order.

Seems like an interbankfx "rule".
  • #194
  • May 10, 2009 9:33pm May 10, 2009 9:33pm
Nod. With Oanda they'll automatically pair things off. So if you've got 100k long and take a 200k short, you'll get the net 100k short if/when the trade is actually taken.
  • #195
  • May 10, 2009 9:47pm May 10, 2009 9:47pm
Quoting Rabid
Nod. With Oanda they'll automatically pair things off. So if you've got 100k long and take a 200k short, you'll get the net 100k short if/when the trade is actually taken.
That's for an OCO?
  • #196
  • May 11, 2009 12:44am May 11, 2009 12:44am
Quoting ragnakore
IBFX had this No Hedge wrong.

I could not place a BUY STOP and SELL STOP now.

I know about the No Hedge thing, I have been trading on ECNs to know this. So tell me, how was the above wrong?

I also opened a BUY position and placed a SELL STOP 20 pips below (ala Stop and Reverse)- also no dice.

According to IBFX, this is exactly what to expect..

They got it all wrong... they screwed it..
The platform orders are seriously primative now, if you're Long you can't place any short orders until the Long trade is closed either by Stop or Limit, same for Short. You can't place a Buy and Sell order at the same time either. Quite obviously that isn't the way things are supposed to work but I'm not sure it's totally IBFX's fault, Metaquotes built and maintain the software so it's really up to them to have a 'fix'.

In a competitive business like marketmaking these companies need to respond quickly to regulatory changes otherwise clients are just going to walk, most traders are a bit more sophisticated than simply wanting to Buy or Sell!
  • #197
  • May 11, 2009 8:10am May 11, 2009 8:10am
I have been an IBFX client for 3 years. I am ready to move my account if they can not fix this ASAP.

I understand the no hedging, but, not being able to place opposing stop orders will kill my trading system.
  • #198
  • May 11, 2009 8:20am May 11, 2009 8:20am
i also IBFX client,what a nonsence NFA hedging policy...
let stay away from IBFX....

a result NFA Compliance Rule 2-43(b) Accounts in a hedged position currently do not have the ability to open any new positions involving the same pair has the hedge. When one part of the hedge is closed the ability to open positions in the same direction as the remaining position shall be restored. Please monitor your account’s message box for all the latest developments. Thank you for trading with IBFX and have a great day.

IBFX

Toll Free: 866-468-3739
Direct: 866-468-3739
International: 1-801-930-6800
Fax: 1-212-884-0609
http://www.ibfx.com
  • #199
  • May 11, 2009 9:25am May 11, 2009 9:25am
Let's stay away from NFA. Trade with FSA broker instead.
  • #200
  • May 11, 2009 9:38am May 11, 2009 9:38am
Stay away from all USA brokers. Some not under NFA, but still under CFTC. Alpari-UK and NorkMarkets (Sweden) look good for me.
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