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[NFA] 4 reasons to ban hedging

  • #21
  • Jul 19, 2009 12:14am Jul 19, 2009 12:14am
Quoting hazelj80
I'm with nanningbob

I have a sell on eur/usd and it starts to go against me, then i close and open buy position according to rules. I win on eur/usd buy trade.

1 win one loss. still profit. maybe or break even.
Pls read NFA QA on rule 2-43.

it now allows you holding a hedge order before the end of day...
which means double roll-over fee on hedge pair is not allowed to collect.

but you can use hedge order to protect against news, glitch and trend reversals of half hour till several hour duration...
and close that by end of day.... hope that covers the needed use mentioned above.

http://www.nfa.futures.org/nfa-faqs/...e-2-43-QA.HTML

CR 2-43(b), Offsetting Transactions
Q. CR 2-43(b) states that an FDM cannot carry offsetting positions. If a customer with a long position executes a sell order or a customer with a short position executes a buy order, does the FDM have to close the position immediately or can it wait until the end of the day?
A. The FDM may wait until the end of the day to offset the positions, but it must do so before applying roll fees.
  • #22
  • Edited 1:08am Jul 19, 2009 1:02am | Edited 1:08am
Quoting billye
The strategy also creates significant potential for abuse. .....
the
practice could be used to disguise losses and inflate the manager’s performance by, for
example, directing the FDM to offset a winning position and then entering into a new
transaction in the same direction while letting the losing position run.
Is this some kind of joke Billye?

Losses incurred by a manager is a historical figure. Hedging cannot eliminate or reduce historical losses.

There is no such thing that can be called "Losing postion" or "Winning Position". You cannot establish a manager's performance based on a prediction about likelyhood of future winning or losing. These are future outcomes.

I would recommend referring to basic accounting principles relating to revenue recognition. Even principle of conservatism doesn't support your argument.

There is cost associated with every benefit. If people are willing to pay certain amount to keep track of their trades rather than closing the position and lose the track who the regulators are to deny their this option?
The Thief of Wall Street
  • #23
  • Edited 3:14am Jul 19, 2009 2:26am | Edited 3:14am
hi chicky...

yes I am talking about individual madoff-mini type of money manager who does not go through legal accounting and book keeping yearly.

let's say it reverse way.
if no-hedging and FIFO is applied.
mt4 can no longer audit trades like what they do now.
the money curve, the win ratio and max drawdown of mt4 now does not include open losing positions.

because you cannot hold a losing E/U trade open and do more 'winning' E/U trade either long or short.
you have to close it, and for those guys gambling with 100x leverage, close a wrong guess means taking a -30% drawdown for -30pips.
and all future clients will run away.

I attached an example here... the person traded 0.7 lot of E/U with 1k usd, and caught in loss.
but he continues trading E/U while holding the loss till nearly blow up... only luckily exit at b/e.... in this report, win ratio or money curve, the loss is hided.
http://www.forexfactory.com/showpost...2&postcount=12

you may find more examples if you go to demo mt4 EA sites like zulu
to see their 95% win EA reports,
most of them is hiding a big loss which cause >50% dynamic drawdown,
but they hold it still s/l at b/e or blow up... if blow up just rename the EA and try again. if it win will create a 100% win 0 drawdown report to sell.
I once looked through zulu in a research here.
one example is autofx, 97% win ratio but holds losing trade open for -5700pips and can continue trade other and growth money curve w/o drawdown
http://www.zulutrade.com/TradeHistor...253&Lang=en-US

all these are possible because mt4 is allowed to open new long or short trade and close it at 'profit', while holding a long term losing position in open tab.
and the closed trades or money cuve will not reflect that.

however this is only 1 guess I have for why hedge and FIFO is not good...
I still trade with stop/limit order and nothing impacts me. (I'm with oanda, fxsol-aus, fxcm-uk... but I don't like the fact that they run away from NFA reg)

I still do profitable hedge trading after deducing broker spread/swap,
but that is not on 1 instrument where we take the trade for nothing but paying broker spread/swap...
in the NFA report FDM admit that no institutional client using hedging on 1 instrument strategy to make money...
it's a illusion we have to allow not close a losing trade.

if rating it, I'd say many of us trading after many many years, still do not want to accept a loss,
on other hand even if 0.1% chance trend leaves your direction for 5% price, most people trading at 10x leverage margin call.
(look at past 2 weeks dow, 'V' curve, 1 month +-5% is very likely to happen and make us margin called instead of exit at b/e.)

that probably is #1 acc killer for traders... and probably why bucketshops like so much for people to not accept loss immediately.

Quoting Chicky
Is this some kind of joke Billye?

Losses incurred by a manager is a historical figure. Hedging cannot eliminate or reduce historical losses.

There is no such thing that can be called "Losing postion" or "Winning Position". You cannot establish a manager's performance based on a prediction about likelyhood of future winning or losing. These are future outcomes.

I would recommend referring to basic accounting principles relating to revenue recognition. Even principle of conservatism doesn't support your argument.

There is cost associated...
  • #24
  • Edited 4:46am Jul 19, 2009 4:43am | Edited 4:46am
Hi Billye,

In recent years, people like Madoff have outsmarted auditors. Not just throgh Ponzi shemes, but also by manipulting accounting rules.

1. I still do not understand a single reason why Madoff was not exposed earlier (please note I used word "was" not "could"). Money is a very dirty game. How it was possible for Madoff to issue trade statements showing trades much more that number of shares traded on the exchanges?

2. There are resident audit applications. All you need it to upload password protected resident audit application to broker's systems. They cannot escape accoutibility.

3. About few years ago International Accounting Standard Board introduced certain changes to curb malpracitices in adjusting / disclosing post balance sheet events. These new rules were introduced to protect shareholders from manipulated financial reporting. But these changes deviate from basic accounting principle of Matching Cost Concept. Then why then introduced these changes? Simply because auditors cannot detect such manipulation. It means now we are destroying accounting just because auditors cannot achieve their objectives. It is really sad.

4. I do not understand what objective regulators want to achieve by introducing new rules that have several by-passes and brokers openly offer such by-passes to thier clients.

5. Fx is an international market. Every pair involves atleast two countries. Isn't it funny that there is going to be significant difference between the fx rules of such countries.

6. When something is not straight, it is not straight.

Quoting billye
hi chicky...

yes I am talking about individual madoff-mini type of money manager who does not go through legal accounting and book keeping yearly.

let's say it reverse way.
if no-hedging and FIFO is applied.
mt4 can no longer audit trades like what they do now.
the money curve, the win ratio and max drawdown of mt4 now does not include open losing positions.

because you cannot hold a losing E/U trade open and do more 'winning' E/U trade either long or short.
you have to close it, and for those guys gambling with 100x leverage, close a wrong...
The Thief of Wall Street
  • #25
  • Edited 5:18am Jul 19, 2009 5:05am | Edited 5:18am
hi chicky:

with regard to your questions. NFA rule 2-43 mainly defines 2 rules.
1. broker cannot edit/cancel order after execution, even if broker claim the price does not match market (which is possibly a product of mt4 back-office control), unless it's requested by trader in the benefit of trader

2. hedge order on the same instrument of same size is not allowed
reason already explained, double spread, double swap, double charge margin, and FDM agree there is no financial benefit (but psych maybe) for the trader.

for example, if someone trades 1k usd acc with a 1 lot E/U long, 1 lot E/U short hedged, within 1 month he will be charged 700 usd just for swap.
we can see this as a pitfall for for people trading small accounts.
doing a hedge order instead of directly close it will also introduce 3pip*28=84 usd additional cost.
also some platform charge double margin for hedged orders.......you can see with the hedge alone, no 1k$ acc could trade hedged 1 lot for long life.

a modification now allow the hedge to be done in a day-trading but must be closed by end of day so that broker cannot charge a roll-over for it.

3. FIFO is not much mentioned, not allow (keeping losing order open running, but still trading same instrument) is my guess...

why I think hedge and FIFO has relationship with mt4 P/L report accounting is that mt4 does not account your dynamic drawdown in it's money curve or win/loss ratio.

so allowing hedging and non FIFO allows a G/U trading only individual money manager to show
fake reports of only his closed profit trades of many many G/U trading, but in reality he holds a big G/U loss in open tab and you cannot see it if he do not close it.

again that is also my guess. (madoff type I mean he is not honest and cheats)

I don't think it would induce to removal of t/p, s/l order,
the idea is that any 1 unit of euro you brought is same regardless of what price it is brought.
again think of buying 100 share citi at 50$ and 100 share at 2.5$, you can still set a t/p at 3$ but accounting will report the 1st bought closed. this prevents keeping losing order running.

lastly, actually the transfer to offshore has been done flawless.
I tried both fxsol-aus and fxcm-uk, they are doing similar thing as if in headquarter.
if we really have mentality acceptance issue regarding losing order, we can still try it it works well.
and for oanda (counts total unit instead of position) and for mbtf(ecn), they can still operate as before.

really I don't see any issue except that mt4 cannot hide open trades away from trader report...
a losing trade has to be closed and reported before next trading could be done...
a lot of fake money manager and EA will be cleaned up I guess... unfortunately majority of money bucketshops make is
by cheating people's money including fake performance reports raising people's expectatoin of high leverage high return no risk.

Quoting Chicky
Hi Billye,

4. I do not understand what objective regulators want to achieve by introducing new rules that have several by-passes and brokers openly offer such by-passes to thier clients.

6. When something is not straight, it is not straight.
  • #26
  • Edited 5:16am Jul 19, 2009 5:15am | Edited 5:16am
Thanks for the explaination Billye,

You are not the first one who sees advantages of these new rules. And I truely respect these opinions. In fact whatever changes announced so far does not affect my trading. I keep only two positions open at a time and that also in two different accounts.

My only fear is that recent wild market fluctuations provided a lot of opportunities to scalpers. These will be taken away from them. I am not a scalper, so have no worries.

Attaching a very interesting statement you would love it.

Thanks again for providing useful insight.

Quoting billye
hi chicky:

with regard to your questions. NFA rule 2-43 mainly defines 2 rules.
1. broker cannot edit/cancel order after execution, even if broker claim the price does not match market (which is possibly a product of mt4 back-office control), unless it's requested by trader in the benefit of trader

2. hedge order on the same instrument of same size is not allowed
reason already explained, double spread, double swap, double charge margin, and FDM agree there is no financial benefit (but psych maybe) for the trader.

a modification now allow...
Attached File(s)
File Type: pdf 1st%20place_aug%202008[1].pdf   32 KB | 458 downloads
The Thief of Wall Street
  • #27
  • Edited 5:35am Jul 19, 2009 5:21am | Edited 5:35am
short answer for scalper is mbtf(ecn) who allows trading 1k unit where I consider safe size.

nfa's position seems to be anything STP or ECN is free from the rules because it happen on an exchange.

when I started off I do scalping with oanda and my understanding is oanda is not impacted as well since they only count how many total units you hold.

thanks I read your sharings chicky, I believe fxcm or fxsol, oanda reports equity to be authenticated and cannot be used to hide open loss.

mt4 is often misused to hide open loss in 2 ways,
1st is to screen capture 'account history' tab to show how many profit/loss taken.
but some indivdual do not like to show the open 'Trade' tab, where equity is shown... this in effect could hide losing orders.
2nd is mt4 does not audit losing orders in the money curve, nor does it report a win-ratio for open losing orders.
example is here, which in effect allow EA to try many times with different names and trade w/o stop/loss to create 95% win, 5% drawdown reports in a demo acc.

I have been working very hard trying to clean these kind of misuses
but bucketshop pays ibs and individual performance actors (not trader) so it works out as a personal attack whenever I point out they hided something.

forex market has been well regulated in US because NFA has the authority to stop misuse... or even kick the broker out of market.
if you try some other part of the world you'll find buckshops are like a money collecting gang and fearless of any law enforcements.
they are fearless of local public security even because their money is not stored locally.

by all means I will still stay with a NFA reg broker even if at it's offshore branch.

Quoting Chicky
Thanks for the explaination Billye,

You are not the first one who sees advantages of these new rules. And I truely respect these opinions. In fact whatever changes announced so far does not affect my trading. I keep only two positions open at a time and that also in two different accounts.

My only fear is that recent wild market fluctuations provided a lot of opportunities to scalpers. These will be taken away from them. I am not a scalper, so have no worries.

Attaching a very interesting statement you would love it.

Thanks again for providing...
  • #28
  • Jul 19, 2009 7:51am Jul 19, 2009 7:51am
Quoting billye
short answer for scalper is mbtf(ecn) who allows trading 1k unit where I consider safe size.

nfa's position seems to be anything STP or ECN is free from the rules because it happen on an exchange.

when I started off I do scalping with oanda and my understanding is oanda is not impacted as well since they only count how many total units you hold.

thanks I read your sharings chicky, I believe fxcm or fxsol, oanda reports equity to be authenticated and cannot be used to hide open loss.

mt4 is often misused to hide open loss...
Which of the US bucketshops do you work for?
  • #29
  • Jul 19, 2009 8:18am Jul 19, 2009 8:18am
Quoting watube
Which of the US bucketshops do you work for?
no, I profit from their loss
  • #30
  • Edited 12:46am Jul 20, 2009 12:04am | Edited 12:46am
thanks to the wide spread forex fraud . I was able to catch a new & live example from a forex mt4 manager's today's monthly disclosure.

1st report at Jun.19 and posted on Jun.21 claim a net profit of 1897.01GBP

2nd report at July.17 and posted on July.20 today disclose a E/U trade
open on Jun.11, E/U long from 1.41, dyn loss to 1.375 (max -350pip)
on Jun.21, it's 1.385, and it's hided from Jun.21 report...i.e. -2500$
if calc that loss, Jun.21 is a net trading loss.

we can see that by disclosing closed trade P/L only (sometimes capture closed P/L from report, sometimes capture acc history tab)
mt4 is being misused by fraud money manager and/or bucketshop hired performance actor to hide real loss (equity) from being seen by potential forex trader and investor.
which lead to greedy/over-trading/over-leverage of newbie trader into bucketshop traps, and fraud of ponzi scheme.

and btw the guy claim to be trading 20k GBP acc, you can see he has a max holding of 5 lot. which is almost 25:1 leverage.
-400pip off of correlated move will wipe off this "real" acc... and he is trading with a +100 t/p and no s/l... which is typical of fraud mt4 manager and EA.

after Aug.1st if he continue trades a NFA regulated broker that does not support hedging and FIFO.
he will not be able to
{
hold a losing trade & open more E/U trade and close 2nd trade at a 'profit'... continue holding losing trade in open
and then possible still post only the closed profits.. and in mt4's final statistics, it will not be calculated as a lose or drawdown, still 100% win 0 drawdown.
}
Quoting billye
thanks I read your sharings chicky, I believe fxcm or fxsol, oanda reports equity to be authenticated and cannot be used to hide open loss.

mt4 is often misused to hide open loss in 2 ways,
1st is to screen capture 'account history' tab to show how many profit/loss taken.
but some indivdual do not like to show the open 'Trade' tab, where equity is shown... this in effect could hide losing orders.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: report1.png Size: 23 KB
Click to Enlarge Name: report2.png Size: 31 KB
Attached Image
  • #31
  • Jul 20, 2009 2:12am Jul 20, 2009 2:12am
For position and swing traders, hedging is an important part of their strategy. You don't have to close out a position just to deal with the inevitable retracement. You trade the retracement as well from a separate account or sub account. In this way, traders keep their long-term positions open to benefit from the bigger moves, but also trade the shorter-time frame moves in order to benefit from those as well.

It is indeed a pity that the NFA did not consult with retail traders before invoking this rule. The intent to prevent brokers from double charging fees, perhaps based on the wrong assumption that traders are too dumb to understand what this involves, was most unfortunate. There are very legimate and beneficial reasons why retail traders hedge. We do this in full cognition of the costs and benefits (the latter far out-weighing the former when done right).

The platform compliance issues are another story altogether, one that should have been adequately researched before the NFA launched Plan A. Do suspect however, that much of this has to do with the competition between brokers, and less to do with retail traders or the hedging issue in itself.
  • #32
  • Jul 20, 2009 2:25am Jul 20, 2009 2:25am
Quoting Jade Gate
For position and swing traders, hedging is an important part of their strategy. You don't have to close out a position just to deal with the inevitable retracement. You trade the retracement as well from a separate account or sub account. In this way, traders keep their long-term positions open to benefit from the bigger moves, but also trade the shorter-time frame moves in order to benefit from those as well.

It is indeed a pity that the NFA did not consult with retail traders before invoking this rule. The intent to prevent brokers from double...
Jade, thanks. I agree that it has some help to mentality though the real financial benefit is hard to be mathematically proven.
in the survey, FDM agreed that there is no financial benefit compard with close the position,
and no institutional customer do that. and it was added per retail customer request.
but trading is about mentality so.. it still helps.

I also agree that the cost of spread will be chosen by trader consciously...
for example jacko choose anti hedge strategy in his 'house' thread, but that stratey also cost 2x spread compared with hedging...
what is the difference? it does not charge a roll-over.

I posted an update from the N web.

it now allows hedging to be done in day-trading,
meaning if you temporarily cover the position against news or market open risk, it is okey, but broker cannot charge the hedging for roll-over fee end of day.

a proposal from some broker has been raised saying if only 1 time margin and 1 time roll-over is charged, is it allow to do hedging? it hasn't been widely agreed.

===================================================
Pls read NFA QA on rule 2-43.

it now allows you holding a hedge order before the end of day...
which means double roll-over fee on hedge pair is not allowed to collect.

but you can use hedge order to protect against news, glitch and trend reversals of half hour till several hour duration...
and close that by end of day.... hope that covers the needed use mentioned above.

http://www.nfa.futures.org/nfa-faqs/...e-2-43-QA.HTML

CR 2-43(b), Offsetting Transactions
Q. CR 2-43(b) states that an FDM cannot carry offsetting positions. If a customer with a long position executes a sell order or a customer with a short position executes a buy order, does the FDM have to close the position immediately or can it wait until the end of the day?
A. The FDM may wait until the end of the day to offset the positions, but it must do so before applying roll fees.
  • #33
  • Jul 20, 2009 2:44am Jul 20, 2009 2:44am
Billye, thanks for the usefull information provided in post #1
Rgd.
  • #34
  • Jul 20, 2009 2:45am Jul 20, 2009 2:45am
Quoting billye
in the survey, FDM agreed that there is no financial benefit compard with close the position,
and no institutional customer do that. and it was added per retail customer request.

a proposal from some broker has been raised saying if only 1 time margin and 1 time roll-over is charged, is it allow to do hedging? it hasn't been widely agreed.
what survey? of whom? added per retail customer request? who and how many customers requested this? how was opinion canvassed? was the research impartial, did it use a proper sample and research methodology?

I can see what the NFA are getting at, but it really does collect the prize for convoluted means of addressing a relatively simple problem that could have easily been fixed by more direct means (adjusting platform compliance). The hullabaloo it has generated could have been avoided if the homework and PR had been done more thoroughly in the first place.
  • #35
  • Edited 4:52am Jul 20, 2009 4:31am | Edited 4:52am
Jade: sorry I was away.
survey I was referring to is the neogotiation between NFA and FDM of forex orders rule.

part (a) says broker cannot abuse to cancel or modify an order after execution which is against a trader's benefit.

for hedging, you can start from page6. Compliance Rule 2-43(b): Offsetting Transactions
http://www.nfa.futures.org/news/PDF/...Adj_112408.pdf

it was too long so I summarized my readings in post#1.
0. no financial benefit for trader (but there may be a strategic or mentality benefit)
1. double spread cost than simply close the position
2. both long and short position has a swap/roll-over
3. cause customer usable margin to drop and potential margin call
4. fund manager (mt4) use hedge order to hide losing order by opening another one that seems to win

you can double check if my understandings were correct.

Compliance Rule 2-43(b): Offsetting Transactions
The other trading practice NFA believes must be addressed involves a
strategy that FDMs refer to as “hedging,” where customers take long and short positions
in the same currency pair in the same account. NFA is concerned that customers
employing this strategy do not understand either the lack of economic benefit or the
financial costs involved.

Ten of 17 FDMs surveyed offer the strategy to their customers, although
for most it is a very small part of their business. Of these ten, six actively promote it on
their web sites, while another one merely indicates that it is available
...........
Several of the FDMs told NFA that they had not offered the “hedging”
strategy until their customers requested it. Although many of the FDMs admit that
customers receive no financial benefit by carrying opposite positions, some FDMs
believe that if they do not offer the strategy they will lose business to domestic and
foreign firms that do.
..................
NFA solicited comments on banning the practice, and two commenters
agreed with the proposal, stating that the practice serves no economic purpose. A third
supported the ban without discussing the reasons behind it. One commenter that
operates an institutional forex platform as well as a retail one indicated that institutional
investors never use this strategy. Most commenters stated that the practice results
from customer demand and generally felt that NFA should not dictate what strategies
customers choose to use. Some were also concerned that customers will simply take
their business to foreign counterparties who can accommodate them.

there are more discussion in page6 of the pdf but it may take 30min to read through.

Quoting Jade Gate
what survey? of whom? added per retail customer request? who and how many customers requested this? how was opinion canvassed? was the research impartial, did it use a proper sample and research methodology?
Originally Posted by billye http://www.forexfactory.com/images/buttons/viewpost.gif
in the survey, FDM agreed that there is no financial benefit compard with close the position,
and no institutional customer do that. and it was added per retail customer request.
  • #36
  • Edited 5:00am Jul 20, 2009 4:41am | Edited 5:00am
Jade:

basically NFA forex order rule 2-43 ask for 2 things:
a) broker cannot cancel or modify trader order after execution, or even upon withdrawal profit
b) broker cannot charge double roll-over swap and double margin for hedged positions.

when I read this 2 I think they make a lot of sense. actually the 1st one is an abuse by broker which is widely used in this under-regulated market.
broker use tons of excuse not to withdraw profit, this one basically shuts door to any excuse.
for 2nd one, if broker charge 0 roll-over swap and 0 margin, I think then no hedging rule is not necessary...
but we as trader do not expect they will give such a favor. => broker ask us to go offshore to still paying that, so I did. (not sure if broker go offshore to be able to edit orders..)

Quoting Jade Gate
I can see what the NFA are getting at, but it really does collect the prize for convoluted means of addressing a relatively simple problem that could have easily been fixed by more direct means (adjusting platform compliance).
when I started off I wasn't aware much of hedging used for mt4 EA hiding losing orders.
I just mentioned it by the way... the pdf also mentioned it by the way.

there has been a few arguments lately saying FIFO=no stop/limit order, I am very confused at that
so I personally invented one explanation where FIFO could be useful...
that is if you hold one E/U long losing and you do another E/U long, then close a long.
the previous losing will be closed and reflected in the transaction report.
that is explained as you refer to platform compliance... I am not sure if FIFO is for that or not...
but I believe we should be still able to do stop/limit order with FIFO... or we can still do offshore if want no change to tools...

I see nothing changed, even brokers can still collect double rollover and double margin offshore, they may still edit..
  • #37
  • Jul 20, 2009 5:21am Jul 20, 2009 5:21am
My understanding is that the NFA have attempted to clarify that themselves re the alleged no stop/limit orders... i.e. that this is factually incorrect. It's one of the things that made them cranky (the misinformation that has been circulating about this). It has it seems, been taken entirely out of proper context and exploited to generate unnecessary fear and concern among traders.

I'd love to be a fly on the wall at the next NFA Board meeting , or listen in to the conversations flying between the CFTC and NFA at present.
  • #38
  • Edited 9:49am Jul 22, 2009 9:10am | Edited 9:49am
Quoting billye
bob:
first of all, posting trades in ff does not warrant proof... it really depend on your discipline and honesty.
like you will post your drawdown of EA honestly, but other people will allow it hide in open trade tabe and show a straight ramp to sky money curve.
mt4 allows that to happen it's questionable why it allow cheating methods to happen,
80-90% EA running in zulu takes advantage of hiding losing trades in open order tab and not report it. the FIFO rule alone will clean them out.

I can do a long and a short of a trending pair at...
I have been traveling some so I was not able to post. Your answers are not very sound because they do not deal with the issue at hand and that is the successful ability of traders to trade with a hedging strategy.

1. "posting trades in ff does not warrant proof" if posting actual trades is not not proof then what is. If a trading system is deemed successful but you do not accept the trades as proof. Then what is proof? Really, this is your first argument out of the box. Again I posted my trades on FF and others were able to use and test the strategy. It works that is why that thread is now 125 pages long.

2. "80-90% EA running in zulu takes advantage of hiding losing trades in open order tab and not report it. the FIFO rule alone will clean them out." The FIFO rules will not clean anything out. Those out to make a fast buck using trading systems are not stopped. They just go on to another strategy. Those who are hurt are those who have used the hedging strategy successfully not the dishonest people. They will continue to exist. It accomplishes nothing of the sort.

3. "only submit winning one for broker's live acc league to win award" I obviously cant speak for all awards and contests but I know the ones I have participated in the losing trades and winning trades both count. In fact I dont know how you could get away in a contest or award of getting away with hiding your losing trades. They count both.

4. The rest of your arguments dont make much sense. If you do a buy trade, you pay a spread, if you do a sell trade, you pay a spread. DUH, of course. What are you arguing? I should not pay a spread if I trade. If both of them are profitable, why should I not pay my spread commission. You have boughten into the argument that you cant win on a hedge. The truth is you can, once you understand this the spread is just the cost of doing business. How can it be any other way? Do you expect the broker to let you trade for free??

Enough for now, the idea that hedging only results in losses, bad margin usage, high leverage, etc. are all bogus arguments. They have nothing to do with hedging as a trading strategy. If you dont understand how you can win with it, just admit, I dont know how you can win with a hedging strategy. That is much better than what you are posting. NFA in my opinion with their recent rulings are not protecting average traders but are protecting the very large market traders who dont want their standard strategies upset so they will want to force us to follow their rules. I could not disagree more.
  • #39
  • Jan 27, 2011 12:28am Jan 27, 2011 12:28am
To avoid the Hedge limitations, you can use CopyTool with Hedge module.
  • #40
  • Mar 29, 2014 12:12am Mar 29, 2014 12:12am
Quoting nanningbob
{quote} I have been traveling some so I was not able to post. Your answers are not very sound because they do not deal with the issue at hand and that is the successful ability of traders to trade with a hedging strategy. 1. "posting trades in ff does not warrant proof" if posting actual trades is not not proof then what is. If a trading system is deemed successful but you do not accept the trades as proof. Then what is proof? Really, this is your first argument out of the box. Again I posted my trades on FF and others were able to use and test...
I agree with most of your arguments. Hedging, as understood in forex trading circle, is in fact Counter Positioning, a tool with multiple uses. It is so sad, authorities are trying to snatch this tool from retail forex traders with all their lame excuses.
The Thief of Wall Street
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