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4H Box Breakout

  • #3,821
  • Sep 16, 2009 11:09pm Sep 16, 2009 11:09pm
This may not be appropriate for this thread, or most spot fx threads/forums for that matter... Nonetheless, the whipsaw range action over the last few weeks has been a glaring confirmation to me that dynamic hedging is needed - especially in the spot fx market. Of course, the problem is that most brokers don't offer options with which to dynamically hedge. I think I'll look into Saxobank... if they offer the greeks on their otc options, then I'm gamma scalping with the otc spot fx market. By gamma scalping you'd be able to win whether the market breaks-out or whipsaws. The only time you'd lose is if the market goes completely flat. Also, if you don't know how to properly hedge in a dynamic way, then you can lose pretty badly as well...

This is my attempt at trying to focus the discussion on "think tank" postulates that may spark new profitable discoveries and improvements.

Walt
  • #3,822
  • Sep 17, 2009 12:20am Sep 17, 2009 12:20am
Quoting 11andy11
no offense scanner but all your post sound like gobildy gouck.
According to Fact Finder, it's spelled, "Gobbledigook"

  • #3,823
  • Sep 17, 2009 1:10am Sep 17, 2009 1:10am
Quoting wrenski
I have never seen the phrase "Gobildy Gouck" spelled out in black and white.
Good job 11andy11!
hey thanks, cause it took me a while to figure it out. While I was trying to type it I was thinking the same thing, hmm, I don't think anyone has ever spelled this. I am just being honest, my eyes get crossed reading his posts.
  • #3,824
  • Sep 17, 2009 1:13am Sep 17, 2009 1:13am
Quoting jones247
This may not be appropriate for this thread, or most spot fx threads/forums for that matter... Nonetheless, the whipsaw range action over the last few weeks has been a glaring confirmation to me that dynamic hedging is needed - especially in the spot fx market....
what is a gamma scalp?? By all means let us know how to dynamically hedge as well. FYI if your referring to brokers that are nfa associated not allowing hedging, ibfx does it.
  • #3,825
  • Sep 17, 2009 1:30am Sep 17, 2009 1:30am
Quoting 11andy11
FYI if your referring to brokers that are nfa associated not allowing hedging, ibfx does it.
How they do this, is they keep your trade in their pool until all trades are closed, then they buy/sell the amount, and close the position, all your doing is trading directly with IBFX and not with the LP like true STP and ECN is supposed to. It's more complicated then that, but it is a work around. I just personally wouldn't trust it, kinda brings back the whole dealing desk thing.
  • #3,826
  • Sep 17, 2009 2:50am Sep 17, 2009 2:50am
Quoting Pharoah
How they do this, is they keep your trade in their pool until all trades are closed, then they buy/sell the amount, and close the position, all your doing is trading directly with IBFX and not with the LP like true STP and ECN is supposed to. It's more complicated then that, but it is a work around. I just personally wouldn't trust it, kinda brings back the whole dealing desk thing.
agreed, but I don't have a problem with it.
  • #3,827
  • Sep 17, 2009 8:35am Sep 17, 2009 8:35am
Quoting 11andy11
no offense scanner but all your post sound like gobildy gouck.
Not understand exactly what you mind, but I can resume that you prefer that I'll shut up, so I'll do. Somebodys in the threads has told that they appreciate knowing how the others managed this setup, so I do.

As this one is in demo mode, I don't see why I would have to tell story.

Go on , thread is yours now

  • #3,828
  • Sep 17, 2009 9:59am Sep 17, 2009 9:59am
Quoting 11andy11
what is a gamma scalp?? By all means let us know how to dynamically hedge as well. FYI if your referring to brokers that are nfa associated not allowing hedging, ibfx does it.
I'm talking about delta neutral hedging with options against the spot market, not pairs trading (cointegration or correlation)...
  • #3,829
  • Sep 17, 2009 5:07pm Sep 17, 2009 5:07pm
Where did everyone go?
  • #3,830
  • Sep 17, 2009 5:34pm Sep 17, 2009 5:34pm
I think Yen's jokes have cleared the room.
  • #3,831
  • Sep 17, 2009 5:57pm Sep 17, 2009 5:57pm
Naw, it's depression, people are depressed about the market actions over the past 4 weeks. Nobody wants to talk about something that's failed them multiple times consecutively. 2 weeks, people can handle, notice on the 3rd week, people started tapering off, then on the 4th week, there's next to no action at all in the thread. Once the market goes back to it's normal self (assuming it does) then you'll find this thread becomming more and more active again.
  • #3,832
  • Sep 17, 2009 6:01pm Sep 17, 2009 6:01pm
Quoting penfield
Where did everyone go?
I think everybody is hard at work to change SL`s, TP`s, position size etc. to not only survive this ranging period, but to even make money in it instead of just waiting for next week.

or so they should if they want to thrive in this business.
  • #3,833
  • Sep 17, 2009 6:02pm Sep 17, 2009 6:02pm
Quoting wrenski
I think Yen's jokes have cleared the room.
Very good, Wrenski!

Usually I work faster than that, but this group was a little harder to chase away.
Greetings from Guanajuato, Mexico
  • #3,834
  • Sep 17, 2009 6:06pm Sep 17, 2009 6:06pm
Quoting yonnie
I think everybody is hard at work to change SL`s, TP`s, position size etc. to not only survive this ranging period, but to even make money in it instead of just waiting for next week.

or so they should if they want to thrive in this business.
This depends on the level of knowledge and experience in Forex. If you're new to forex, wait, or use a demo account to try to devise a workaround for these types of conditions.

Here's one, Don't place any pending orders at all at the beginning of the week, when the price breaks out of the box (short) place a buy order at the low of the box, and vice versa for long. Will this work perfectly? no, definitely not, no system does, but it helps with these ranging conditions, the only problem is when the market returns to normal, you have to recognize it, and alter the system to it's original rules. But that's an existing problem with the current system, we have to be able to recognize a ranging market to alter the original rules to allow for ranging.
  • #3,835
  • Sep 17, 2009 6:23pm Sep 17, 2009 6:23pm
Maybe its just me, but after 3 weeks of losses (a sure sign of a ranging market) in a row, surely somebody would alter something or stay out of the market until volatility is there again and trade other systems in the meantime.
  • #3,836
  • Sep 17, 2009 6:45pm Sep 17, 2009 6:45pm
Quoting yonnie
Maybe its just me, but after 3 weeks of losses (a sure sign of a ranging market) in a row, surely somebody would alter something or stay out of the market until volatility is there again and trade other systems in the meantime.

Some don't understand the market enough to be able to effectively alter a system, and one of the main reasons this system is so popular is because a cat could do it in it's sleep. Very simple and very effective system, given the proper market conditions. Alot of other systems are very busy, which becomes an eyesore and is in alot of cases, too much to take in in a short amount of time.

Someone new to forex could literally come to FF, check out the thread, and immediately start trading successfully as long as they understand the concept of buy and sell and understand the heavy risk involved, AND as long as the market favors the system. Ther are what, 8-10 people that post regularely in this thread, and it's apparent that each of these people know what their talking about when it comes to forex and system alterations, but we have to think, just because we know doesn't mean the other 80% of users that read this thread know and understand the aspects of forex that we all take for granted and consider to be common sense, such as proper money management and the like. The only thing we can do to ensure that these other readers know and understand is to post our experiences, and possible alterations to turn a 4 week loosing streak into a winning streak.
  • #3,837
  • Edited 7:15pm Sep 17, 2009 7:04pm | Edited 7:15pm
Pharoah you`re right that newbies would find it difficult to adjust to market changes.

so for them I would say to stay out of this market and demo trade to gain experience and trade again after a couple of wins with a small position.

also newbies watch the few people that are still trading this market and even sometimes profitable and look on your chart how they manage to eke out a profit.

the only way forward is to be almost a fanatic and work, work, work until you know your chart inside out and find even more clever ways to make money than is outlined in this thread. They are there, but its YOU that got to find them and gain experience at the same time. I cant repeat that enough
  • #3,838
  • Sep 17, 2009 7:06pm Sep 17, 2009 7:06pm
Quoting Pharoah
Some don't understand the market enough to be able to effectively alter...

A cat...in his sleep? Where do you come up with these analogies?
  • #3,839
  • Sep 17, 2009 7:32pm Sep 17, 2009 7:32pm
Quoting wrenski
A cat...in his sleep? Where do you come up with these analogies?
lol, they just come to me, you have to admit, this is one of the simplest systems out there for trading forex. This is why I used the analogy, this is one of the only system that you can actually sit, make your pendings, and leave for a number of hours, not even thinking about the trades. The time required to use this system is fantastically low, the rewards are exceedingly high considering the risk involved on a per trade basis, all of this spells easy money with very little effort, which is what you would find in a cat, maximum reward, for very little effort, even dogs have to do tricks for rewards, cats just have to be.
  • #3,840
  • Edited Sep 18, 2009 12:11am Sep 17, 2009 10:43pm | Edited Sep 18, 2009 12:11am
Quoting wrenski
A cat...in his sleep? Where do you come up with these analogies?
Don't try it, Wrenski. I taught the *@!* cat to trade, then left him in charge of the computer and all he did was eat the mouse.

Plus, he forgot to put in a Stop Loss. The loss is coming out of his rations for the next 6 years.
Greetings from Guanajuato, Mexico
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