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Simple Hedging System

  • #1
  • First Post: Apr 14, 2011 1:00pm Apr 14, 2011 1:00pm
This is a very simple system that uses two Non Correlated currencies, using an Indicator that monitors the profit/loss of the Trade.

Keep adding to position if Basket Profit Indicator shows a loss.

The Lot size is determined by using Multi Hedge Calculator( Excel).


So far The results have been quite good.

I am posting this system so that it can be forward tested.( I don't believe in Back Testing).

Indicator is Basket Profit 2 Pairs Sq. This Indicator was created by Squalou, Hence credit entirely Goes to him
Attached File(s)
File Type: mq4 Basket Profit 2 Pairs sq.mq4   17 KB | 2,314 downloads
File Type: zip multihedge_calculator_144.zip   2 KB | 2,987 downloads
  • #2
  • Apr 14, 2011 1:02pm Apr 14, 2011 1:02pm
The currency pair I use are AUDUSD and EURAUD.

Buy AUDUSD
SELL EURAUD.

Reason: Both gives positive Swap in case it has to be carried overnight.
  • #3
  • Apr 14, 2011 1:09pm Apr 14, 2011 1:09pm
Chart and Indicator

I have been testing it on 1 hr chart
Attached Image (click to enlarge)
Click to Enlarge Name: basket profit.gif Size: 20 KB
  • #4
  • Apr 14, 2011 1:14pm Apr 14, 2011 1:14pm
I want to convert Basket Profit Indicator to Display as Histogram and not as a line. Can some one help.
  • #5
  • Apr 14, 2011 1:22pm Apr 14, 2011 1:22pm
Quoting ES Trader
I want to convert Basket Profit Indicator to Display as Histogram and not as a line. Can some one help.
Hi EsTrader,

Thanks for sharing. And when do you enter/exit? And how much loss do you have before adding positions?

Thank you
  • #6
  • Apr 14, 2011 1:29pm Apr 14, 2011 1:29pm
Quoting ES Trader
I want to convert Basket Profit Indicator to Display as Histogram and not as a line. Can some one help.
add this line
SetIndexStyle(0,DRAW_HISTOGRAM);

anywhere within the init() Function
that should do the trick
  • #7
  • Apr 14, 2011 1:30pm Apr 14, 2011 1:30pm
Quoting Caillou
Hi EsTrader,

Thanks for sharing. And when do you enter/exit? And how much loss do you have before adding positions?

Thank you
Glad you are here. I like to add at St Dev 1.0.
I don't put Stop Loss. I use one of Steve's Money management EA.
  • #8
  • Apr 14, 2011 1:31pm Apr 14, 2011 1:31pm
Quoting iwjw
add this line
SetIndexStyle(0,DRAW_HISTOGRAM);

anywhere within the init() Function
that should do the trick
Let me try. Thanks
  • #9
  • Apr 14, 2011 1:38pm Apr 14, 2011 1:38pm
Quoting ES Trader
Glad you are here. I like to add at St Dev 1.0.
I don't put Stop Loss. I use one of Steve's Money management EA.
Thanks,

Will try it.....
  • #10
  • Apr 14, 2011 1:55pm Apr 14, 2011 1:55pm
Try useing this indi, I use it on about 6 different pair, the point you have to get to is the pivit point. you could go negative if you chose to buy or sell the wrong pair. I am not sure what you hedging method is, but I would like to know more.
Attached File(s)
File Type: ex4 OverLayChart.ex4   9 KB | 1,017 downloads
File Type: mq4 OverLayChart.mq4   9 KB | 1,116 downloads
  • #11
  • Apr 14, 2011 2:01pm Apr 14, 2011 2:01pm
Quoting jrushing
Try useing this indi, I use it on about 6 different pair, the point you have to get to is the pivit point. you could go negative if you chose to buy or sell the wrong pair. I am not sure what you hedging method is, but I would like to know more.
I already use it. But here I am trying to just look at Profit/Loss of the Pair and add to position.
  • #12
  • Apr 14, 2011 2:05pm Apr 14, 2011 2:05pm
Quoting jrushing
Try useing this indi, I use it on about 6 different pair, the point you have to get to is the pivit point. you could go negative if you chose to buy or sell the wrong pair. I am not sure what you hedging method is, but I would like to know more.
Can you please explain wht you mean by" Get to the pivot point"
Attached Image (click to enlarge)
Click to Enlarge Name: basket profit 2.gif Size: 29 KB
  • #13
  • Apr 14, 2011 2:12pm Apr 14, 2011 2:12pm
This has been attempted many times before and usually leads to implosion. What happens if AUD gets very weak? Even with positive swap, you will be in a severe drawdown for a long long time. Unless you do microscopic lot sizes, but then whats the point of even wasting so much time if you have to wait forever to make a small profit? Keep in mind that time is opportunity cost and should be factored into any investment.

Quoting ES Trader
I am trying to post the results (which so far is pretty good) here.
But I am not able to delete personal info from the statement. I am trying to figure out how to do it. I will post once I know how to do it.
Of course the results recently have been good. AUD has been strengthening. You could say the same thing about any other currency that has done well recently. Doesn't mean it's a good currency to trade now.
  • #14
  • Apr 14, 2011 2:23pm Apr 14, 2011 2:23pm
Quoting ES Trader
Can you please explain wht you mean by" Get to the pivot point"

You have to look for the crossing of the pairs (the Pivot), but the problem will be if for example you sell the AUDUSD and then it goes up your at a loss, at the same time you BUY the EURAUD and it goes down you have just compiled your losses. I trade them off the 4 hour most of the time once I get a daily and weekly RSI conformation of direction however I only use a small lot size. Most of the time I let it run for 2 or 3 days at most, here lately it has worked very well, but from experience most of the time the trades do not last more than a day or so.
  • #15
  • Apr 14, 2011 2:32pm Apr 14, 2011 2:32pm
Quoting jrushing
You have to look for the crossing of the pairs (the Pivot), but the problem will be if for example you sell the AUDUSD and then it goes up your at a loss, at the same time you BUY the EURAUD and it goes down you have just compiled your losses. I trade them off the 4 hour most of the time once I get a daily and weekly RSI conformation of direction however I only use a small lot size. Most of the time I let it run for 2 or 3 days at most, here lately it has worked very well, but from experience most of the time the trades do not last more than a day...
I get it.
I also sometimes use AUDUSD, EURAUD and EURUSD

SELL AUDUSD
SELL EURAUD
BUY EURUSD

A synthetic Hedge. I use Basket Profit 3 pairs indicator again by Squalou.
There is a positive swap in this strategy as well even though it is not much.

safer strategy than 2 pair trade.
  • #16
  • Apr 14, 2011 2:54pm Apr 14, 2011 2:54pm
Another Useful Indicator by SwingMan for this strategy
Attached Image (click to enlarge)
Click to Enlarge Name: basket profit 4.gif Size: 28 KB
  • #17
  • Apr 14, 2011 2:55pm Apr 14, 2011 2:55pm
http://www.forexfactory.com/showthre...t=85097&page=8
  • #18
  • Apr 16, 2011 10:47pm Apr 16, 2011 10:47pm
Basket profit 2 pairs has a huge potencial . . . Suscribed
Humble & Kalcker CLO2 = Covid killer
  • #19
  • Apr 24, 2011 2:55am Apr 24, 2011 2:55am
Quoting ES Trader
Can you please explain wht you mean by" Get to the pivot point"
I saw the histogram chart, that you fixed accoeding WIWI's help.

I think that it is much more understandable.

Can you please attach the fixed indicator?. Since I tried to fix - without success.

Thanks.

Y.
  • #20
  • Apr 24, 2011 8:22am Apr 24, 2011 8:22am
Quoting ES Trader
I get it.
I also sometimes use AUDUSD, EURAUD and EURUSD

SELL AUDUSD
SELL EURAUD
BUY EURUSD

A synthetic Hedge. I use Basket Profit 3 pairs indicator again by Squalou.
There is a positive swap in this strategy as well even though it is not much.

safer strategy than 2 pair trade.

Hi Es Trader,

I'm also working around the dynamics of hedges. I'm not able to find the Basket Profit 3 Pairs of Squalou, can you post it. Thanks

Referring to your method in post 1, I noticed that the pairs can move very far from the zero line, also if they are higly correlated, if you simply add positions as the Delta go far from the zero you risk to blow the account soon or late.

Good Easter
"If you want something go down, let it go up first" Lao-Tzu
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