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LMAX = revolution?!?

  • #241
  • Oct 18, 2011 5:16am Oct 18, 2011 5:16am
They recently delisted all fixed income products - probably not due to overwhelming success. I have to say their index and commodity products arent really competitive either - the spreads are just too high, books are very thin. FX is still very good.

Will be interesting in what direction they will go. Initially they said that they are going to offer stocks and ETFs too at some point. Maybe they will just go FX only?
  • #242
  • Oct 18, 2011 7:43am Oct 18, 2011 7:43am
IMO LMAX has a serious design flaw: hedging is not possible. And the API does not even handle discrete positions (for the same instrument). That makes two design flaws, precisely. Two too many.
  • #243
  • Oct 18, 2011 7:45am Oct 18, 2011 7:45am
Quoting m.m.m.
IMO LMAX has a serious design flaw: hedging is not possible. And the API does not even handle discrete positions (for the same instrument). That makes two design flaws, precisely. Two too many.
Can you give us an example of your hedging position?
"I made all my money by selling too soon"
  • #244
  • Oct 18, 2011 7:52am Oct 18, 2011 7:52am
Quoting Bleek
Can you give us an example of your hedging position?
Suppose there is an uptrend in an instrument and you are long; as the price does not rise linearly (strictly speaking), one or several small corrections may occur, which you could exploit by going short without affecting your long position. But (with LMAX) you can not.
  • #245
  • Oct 18, 2011 7:52am Oct 18, 2011 7:52am
This is no design flaw. When i buy 1 and then sell 1 i am flat - everything else is bullshit. Its the way it works on every exchange(futures, stocks, what have you), except some MT4 niche players.
  • #246
  • Oct 18, 2011 9:28am Oct 18, 2011 9:28am
Quoting m.m.m.
Suppose there is an uptrend in an instrument and you are long; as the price does not rise linearly (strictly speaking), one or several small corrections may occur, which you could exploit by going short without affecting your long position. But (with LMAX) you can not.
That's common practise, in fact isn't it an FSA (UK) requirement these days?

I used to hedge on a separate platform but now I avoid hedging entirely and just reverse my position and then reverse again.
"I made all my money by selling too soon"
  • #247
  • Oct 19, 2011 10:17am Oct 19, 2011 10:17am
Quoting shrike
This is no design flaw. When i buy 1 and then sell 1 i am flat - everything else is bullshit. Its the way it works on every exchange(futures, stocks, what have you), except some MT4 niche players.


hedging is indeed pure BS introduced by forex bucketshops to make more money of the spread
  • #248
  • Oct 21, 2011 8:38am Oct 21, 2011 8:38am
In case someone is jealous and wants MultiCharts, I've created a template that resembles MC "look" on MT4.

X)
Attached Image (click to enlarge)
Click to Enlarge Name: reamchart.gif Size: 18 KB
Attached File(s)
File Type: tpl mc_ream.tpl   < 1 KB | 300 downloads
I found a penny today. That's +100 pips for me.
  • #249
  • Oct 21, 2011 8:42am Oct 21, 2011 8:42am
Quoting Cocoflanel
hedging is indeed pure BS introduced by forex bucketshops to make more money of the spread
Actually, I pay more spread and commissions with broker that does not have hedging, because I would need to close the existing position, then trade one in opposite, then reopen previous.

"Hedging" made me switch a broker (it was painful to leave Oanda for a big bucket shopt). I don't really "hedge", I just have positions open two different ways, two completely different strategies that don't have anything to do with each other. One is longer term, one is intraday. Leaving out signals is SUICIDE.

Unlike you, I think only old farts at cftc who were beaten in their childhood could come up with such bullshit not allowing hedge. What is it to you that it is there or not? I need it.
I found a penny today. That's +100 pips for me.
  • #250
  • Oct 21, 2011 11:49am Oct 21, 2011 11:49am
Quoting ReaM

"Hedging" made me switch a broker (it was painful to leave Oanda for a big bucket shopt).
with a sub-account you could.
  • #251
  • Oct 21, 2011 12:00pm Oct 21, 2011 12:00pm
You can with lmax as well, since, hedging or not, the outcome is the same.

Do your sequence of trades with a hedging broker and with lmax. PnL will be the same, even if positions display will differ.
  • #252
  • Oct 21, 2011 4:58pm Oct 21, 2011 4:58pm
I have a general question to people: do you think I am dumb not to think of that? Please, don't be offended, but stop freaking posting anything against hedging. That's what I did with Oanda. I had to transport money from one to another all the time because of not enough margin. It was pain. Having two terminals open, changing accounts and switching apps is tiresome.
I found a penny today. That's +100 pips for me.
  • #253
  • Oct 21, 2011 5:03pm Oct 21, 2011 5:03pm
Quoting shrike
You can with lmax as well, since, hedging or not, the outcome is the same.

Do your sequence of trades with a hedging broker and with lmax. PnL will be the same, even if positions display will differ.
It will be more, because you will have to reopen the previous position. That adds slippage (because execution is not instant, while I add, market moves), plus it adds more commissions.

Example:

I buy 1 lot and hold.
I then with another strategy go short with 0.5 lots and close it.

What's left? 0.5 lot is left, I have to add 0.5 extra, plus, EVEN if the execution is instant, I will enter one spread further plus commissions.
I found a penny today. That's +100 pips for me.
  • #254
  • Oct 22, 2011 1:34am Oct 22, 2011 1:34am
Quoting Cocoflanel
hedging is indeed pure BS introduced by forex bucketshops to make more money of the spread
You have been missinformed.
Hedging is definitely not BS or something shady forex brokers invented,
this is something the big players and the hedge funds use all the time,
believe me, if it where bullshit they wouldn't be doing it.
it's a part of risk managment to protect portfolios from falling markets,
what if Im short EURUSD long term since last year and I think price will continue decline this year,
what if I wan't to scalp and take advantage of a short term momentum rally to the upside in the same pair?
so now I have to first close my long term position to be able to do that? THAT my friend, is BS!
Bulls are stupid Animals!especially when Im short!
  • #255
  • Oct 22, 2011 1:53pm Oct 22, 2011 1:53pm
Quoting roughtrader
You have been missinformed.
Hedging is definitely not BS or something shady forex brokers invented,
this is something the big players and the hedge funds use all the time,
believe me, if it where bullshit they wouldn't be doing it.
it's a part of risk managment to protect portfolios from falling markets,
what if Im short EURUSD long term since last year and I think price will continue decline this year,
what if I wan't to scalp and take advantage of a short term momentum rally to the upside in the same pair?
so now I have to first close my long...

ok, time for some education ...


http://www.investopedia.com/articles...#axzz1bUcUxIHT

Taking exact the opposite position in the same instrument in a subaccout has nothing to do with hedging , you are flat

The only advantage is for the broker , they make extra money from the spread, if you don't understand how,I will give you an example ...
  • #256
  • Oct 23, 2011 3:11am Oct 23, 2011 3:11am
Quoting Cocoflanel
ok, time for some education ...


http://www.investopedia.com/articles...#axzz1bUcUxIHT

Taking exact the opposite position in the same instrument in a subaccout has nothing to do with hedging , you are flat

The only advantage is for the broker , they make extra money from the spread, if you don't understand how,I will give you an example ...
There is no need to educate me, I am fully aware how these things work,
I understand what you mean, Yes hedging is "mostly" done in other correlated pairs, but also in the same pair going flat depending which strategy used, but the fact is that hedging in the same pair is what NFA has forbidden and why brokers don't allow this in the US. and that is generally what people are refering to when talking about hedging not being allowed, maybe you should educate NFA I think they need it! when you ask a broker if he allow hedging, you don't actually mean if they allow you to hedge correlated pairs do you? everyone allow that!
going flat is not at all bad, you can gain 50% more on a trend that way.
Bulls are stupid Animals!especially when Im short!
  • #257
  • Oct 23, 2011 3:34am Oct 23, 2011 3:34am
Quoting roughtrader
There is no need to educate me, I am fully aware how these things work,
I understand what you mean, Yes hedging is "mostly" done in other correlated pairs, but also in the same pair going flat depending which strategy used, but the fact is that hedging in the same pair is what NFA has forbidden and why brokers don't allow this in the US. and that is generally what people are refering to when talking about hedging not being allowed, maybe you should educate NFA I think they need it! when you ask a broker if he allow hedging, you don't actually...

you still don't get it ?? LOL

"hedging" in the same pair has nothing to do with real hedging , you are simply stupid flat, no surprise the NFA has forbidden this ,it is misleading..

THE ONLY reason this was introduced by those scammy brokers is to make more money of the spread by the extra position,do you realise this ?
  • #258
  • Oct 24, 2011 1:47am Oct 24, 2011 1:47am
Quoting Cocoflanel
you still don't get it ?? LOL

"hedging" in the same pair has nothing to do with real hedging , you are simply stupid flat, no surprise the NFA has forbidden this ,it is misleading..

THE ONLY reason this was introduced by those scammy brokers is to make more money of the spread by the extra position,do you realise this ?

I just wonder who is plain stupid?
don't be such an asshole!
your definition is compleatly screwed

from investopedia

What Is Hedging?
The best way to understand hedging is to think of it as insurance. When people decide to hedge, they are insuring themselves against a negative event. This doesn't prevent a negative event from happening, but if it does happen and you're properly hedged, the impact of the event is reduced. So, hedging occurs almost everywhere, and we see it everyday. For example, if you buy house insurance, you are hedging yourself against fires, break-ins or other unforeseen disasters.

example Im long EURUSD sinse last year,
and so far Im up 9000 pips on the trade,
there is a downtrend atm but I do not want to close my trade
because I think it will go up more after this big (re-trace) has compleated,

so to protect my trade, I could then go short,
am I flat? no!!! first of I have 9000 pips in my favor,
which are reduced by the retrace, if I enter a short here
I am eliminating the trade to further decline,
this is your definition that Im flat, but guess what,
when the retrace is compleated, I can sell the short
and when Im back to the level before the retrace begun,
Im now up 10000 pips total, so did that "hedge" make me flat??
I did gain 1000 pips on the hedge.
I could techically do this for every retrace in the trend,
gaining almost the double amount of pips!
that is also hedging even it is in the same pair,
it doesnt have to be options or what have you.
if you can't see the benefit with this
then I fear it is you that is plain stupid :/

this is a Forex forum,
we are generally not talking about shares and stocks in here,
the hedging the investopedia explains is hedging for shares and stocks,
but hedging is a lot more than that, in fx it's done differently.
you shouldn't think that just because you read something on the web,
that you can apply that to all instruments. hedging is a lot more than just hedging shares,
your definition is narrow and limited because you don't yet have the knowledge to understand how hedging is done in different instuments.


so much for the shady brokers
Bulls are stupid Animals!especially when Im short!
  • #259
  • Oct 24, 2011 2:40am Oct 24, 2011 2:40am
All the name-callings is a bit sad to see in a professional forum...

But in your above example-
1. You assume that you can accurately predict a downturn/correction and when you go short you capitalize on it.
That is hardly practical to do on a consistent basis to argue that it is a credible strategy. For instance, if you are wrong, and the market continues to move up by 1000 pips more instead of moving down 1000 pips, Instead of profiting by (9000+1000) 10,000 pips by sticking to your original plan, you have merely locked-in a profit of 9000 pips and remain flat(square) in your books.
2. You could in effect do the same by switching your positions from long to short to long if at all you can accurately predict such corrections and resumption of trends instead of relying on "hedge/going flat/locking" (call it whatever catches your fancy).
3. It might not be the case with you, but mostly traders resort to "hedging" because they are averse to actually booking their losses and they prefer "locking" their loss by taking a new (contra) opposite side trade and try to recover the loss. At best, it just delays the inevitable booking of loss or wiping out of the account.

I agree with Coco, the only one who stands to gain is your broker (You would end up paying the spread twice over for 2 sets of orders).
  • #260
  • Oct 24, 2011 3:02am Oct 24, 2011 3:02am
Quoting roughtrader

we are generally not talking about shares and stocks in here,
the hedging the investopedia explains is hedging for shares and stocks,
but hedging is a lot more than that, in fx it's done differently.

Hedging is never done by taking the opposite position in the same instrument because that is called being flat, having no position, comprende amigo ?
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