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The Barak Hedging Method 1

  • #21
  • Edited Apr 22, 2006 12:11am Mar 12, 2006 7:32pm | Edited Apr 22, 2006 12:11am
If you wish to see a month's worth of live trade screenshots/br o ker station shots i've posted them at my domain: http://accrete.com/fx_gbp/ I did this live test on the "Midnite Express" as we call it on the Pacific Coast. Basicaly (as stated elsewhere in another thread) you look at the just closed 30min candle at 00:30PT/08:30GMT and take a trade in the direction of the candle. What i did was place a buy entry and sell entry +20/-20 either side of the currency at 08:30GMT. You can see the results. I took a breather from the method for personal reasons but am thinking about starting up another live test month in April. Remember that i was placing orders on both sides just as an experiment in demo...overal it would have been profitable if i had just placed the entry order on the side of the General trend and called it good at believing my homework would pan out for profits.

Cheers
  • #22
  • Mar 21, 2006 3:45pm Mar 21, 2006 3:45pm
Quoting DrRock
This is exactly the same as:

Put a buy stop at 120 and a sell stop at 80. This way you only need 1 account and you don't pay the spread twice.

Simon
I don't believe you understand. Your trading two pairs which requires 2 accounts, one for each pair. Your example of the sell stop at 80 implies a -20 loss. Period. Without the the other pair in some other account in the opposite direction, your out -20 in your 1 account.

Please try to clarify; I'm interested in your perception that this can be done in 1 account, but I don't understand how you think this is possible. Thanks
Profitsee - Knowing the future is not enough.
  • #23
  • Mar 21, 2006 4:39pm Mar 21, 2006 4:39pm
Quoting DrRock
This is exactly the same as:

Put a buy stop at 120 and a sell stop at 80. This way you only need 1 account and you don't pay the spread twice.

Simon
Doesn't your trade assume you know where the price is going to end up? Where the 2 account method does not need to know the points at which to place stop entrys.

thanks SMJones
  • #24
  • Mar 22, 2006 9:56pm Mar 22, 2006 9:56pm
Enter a 10 lot trade using 4-hour period as 1 account, and hedge it with a 1-hour period trade in the other account. The 1-hour trade account would mimic the short term trend. Use trailing stops in the direction of this short-term trend account. THe objective is that the short term account will return to the long term account trend, blowing through the trailing stops in your favor. The profits collected would appear on the short-term account, while you close the long-term account at 0 loss.
Profitsee - Knowing the future is not enough.
  • #25
  • Mar 22, 2006 10:17pm Mar 22, 2006 10:17pm
Quoting Pip-Gandalf
Here is an illustration:


U open the two hedged positions at 100 each:

Buy = 100
Sell = 100

The price goes to 110 - it doesnt affect anything.
The price goes to 90 - it doesnt affect anything .
Than the price jumps to 55 in lieu of the Big Ben Strategy (Frankfurt/London etc...) - than what happens is : the Buy position is stopped at 80 (20 pip loss) - and the sell position catches a 45 pip profit (use Oanda to get a min spread).

In other words - what i am saying is : absent this method there is no way you could atch a radical break from pip 1 - and ride it correctly . In this manner u will catch it and most times you will profit .

And as for losing : well : if u trail your stop wisely/manually (since a trailing stop would not work because of the large delta ) - u could gain almost every time.

And lastly, The whole point of this forum is to post your trading ideas and get ideas to improve it - so - instead of criticising me - please offer ideas to improve this system .
The only improvement would be to establish a trailing stop on both accounts. Using your example:

Long Account Stopped out at 80 (-20 loss)
Short Account = 55 ( +45 profit)
Short Account still has the 120 stop on it. Put a 20 point trailing stop on both accounts.
Short Account's stop now has moved +40: The two 20 pip moves from 100 to 60 has moved the stop from 120 to 80.
You then can manually tighten the stop towards 55 or buy a call option at strike 75
Goes above 75 you profit on the option
Goes further below, the profit pays for the option, still profiting
Buy call option at 50...rinse and repeat.
Profitsee - Knowing the future is not enough.
  • #26
  • Last Post: Apr 22, 2009 1:54am Apr 22, 2009 1:54am
looks good anybody still using this method ?
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