What's the point of hedging? | Page 11 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Dow futures point to more than a 1,000-point fall at the open 1 reply

Hedging 34 replies

Pivot point reference point? 7 replies

Hedging strategies 7 replies

Attachments: What's the point of hedging?
Exit Attachments

What's the point of hedging?

  • #201
  • Nov 9, 2011 11:39pm Nov 9, 2011 11:39pm
Quoting nubcake
why is this so very very difficult for you to grasp? the definition of an edge is something you can identify which skews the odds towards a more favorable outcome which has nothing to do with your personal situation and everything to do with the mechanics of the situation.

it's not hard, aaron. it really isn't!

how much edge does nedging provide? none. it's not an edge. the markets will still do whatever it is they are going to do.

how much of an edge does feeling good about oneself while trading give? none. it's not an edge and the market...
Nubs,

I am not a mind reader which is why I asked you for your definition. Off hand I would not describe it as an elegant one, but as long as it works for you go for it.

Anyway, this is getting boring.
Kill the ego, or it will kill the mission.
  • #202
  • Nov 9, 2011 11:45pm Nov 9, 2011 11:45pm
Quoting AaronWard
Nubs,

I am not a mind reader which is why I asked you for your definition. Off hand I would not describe it as an elegant one, but as long as it works for you go for it.

Anyway, this is getting boring.
that's not my definition. you can take that as THE definition, and stop this subjective nonsense.

if i'd signed my last post with the name 'hanover' you would be all over it like bees on honey, but instead it's not an elegant description

how about you define it then. it won't change the reality of the situation... the market will still do whatever it is going to do.

this got boring a good 5 years go....
Congratulations ScalaFX for coming out of the closet!
  • #203
  • Nov 9, 2011 11:47pm Nov 9, 2011 11:47pm
looks like someone lost hard and learnt lessons the hard way

is that true nub?
Have I got something on my face, SOLDIER?
  • #204
  • Nov 9, 2011 11:52pm Nov 9, 2011 11:52pm
Quoting nubcake
that's not my definition. you can take that as THE definition, and stop this subjective nonsense.

if i'd signed my last post with the name 'hanover' you would be all over it like bees on honey, but instead it's not an elegant description

how about you define it then. it won't change the reality of the situation... the market will still do whatever it is going to do.

this got boring a good 5 years go....
LOL. Perhaps you could link to a definitive source? And no, it is not elegant.
Kill the ego, or it will kill the mission.
  • #205
  • Nov 9, 2011 11:57pm Nov 9, 2011 11:57pm
Quoting AaronWard
LOL. Perhaps you could link to a definitive source? And no, it is not elegant.
jfgi...

this is going down the road of you expecting me to actually specify edges. well i've already mentioned some, so take that for what it is.

and buma : don't you have other things to do, like pine over some random girl you found a picture of while playing games with your daddy's 1k and posting a billion pointless posts a day showing how little you know? silly child. (wait's for buma's girlfirend mla to come here and threaten me some more. hilarious little children)
Congratulations ScalaFX for coming out of the closet!
  • #206
  • Nov 10, 2011 12:02am Nov 10, 2011 12:02am
Quoting nubcake
jfgi...
didn't know what jfgi was... so thanks for adding to my vocab...

I did and this is what came up

edge (http://img.tfd.com/hm/GIF/ebreve.gifj)n.1. a. A thin, sharpened side, as of the blade of a cutting instrument.
b. The degree of sharpness of a cutting blade.
c. A penetrating, incisive quality: "His simplicity sets off the satire, and gives it a finer edge" (William Hazlitt).
d. A slight but noticeable sharpness or harshness: His voice had an edge to it.

2. Keenness, as of desire or enjoyment; zest: The brisk walk gave an edge to my appetite.
3. a. The line of intersection of two surfaces: the edge of a brick; the table's rounded edges.
b. A rim or brink: the edge of a cliff.
c. The point at which something is likely to begin: on the edge of war.

4. a. The area or part away from the middle; an extremity: lifted the carpet's edge.
b. A dividing line; a border: a house on the edge of town. See Synonyms at border.

5. A margin of superiority; an advantage: a slight edge over the opposition.
6. A provocative or discomforting quality, as from audacity or innovativeness: "Over all, the show will have a grittier edge" (Constance C.R. White).

Clearly eating right would give one a margin of superiority...
Kill the ego, or it will kill the mission.
  • #207
  • Nov 10, 2011 12:07am Nov 10, 2011 12:07am
Quoting AaronWard
didn't know what jfgi was... so thanks for adding to my vocab...

I did and this is what came up

edge (http://img.tfd.com/hm/GIF/ebreve.gifj)n.1. a. A thin, sharpened side, as of the blade of a cutting instrument.
b. The degree of sharpness of a cutting blade.
c. A penetrating, incisive quality: "His simplicity sets off the satire, and gives it a finer edge" (William Hazlitt).
d. A slight but noticeable sharpness or harshness: His voice had an edge to it.

2. Keenness, as...
lol. and how did you find out what jfgi meant? oh the irony!

if the opposition is the market as a whole (all n number of traders at any one time), then how does your ability to eat well influence the prices that their mass behavior generates in such a way as to put price movement in your favor? explain this to me and i'll start eating so pure that i crap health bars!
Congratulations ScalaFX for coming out of the closet!
  • #208
  • Nov 10, 2011 12:17am Nov 10, 2011 12:17am
Quoting nubcake
lol. and how did you find out what jfgi meant? oh the irony!

if the opposition is the market as a whole (all n number of traders at any one time), then how does your ability to eat well influence the prices that their mass behavior generates in such a way as to put price movement in your favor? explain this to me and i'll start eating so pure that i crap health bars!
You guessed it. LOL

Nothing I do influences prices. My job is to spot opportunities and that what gives me an edge. As for my proof... a live trader has a "slight advantage" over a dead trader. And according to the on-line dictionary, this would give a living trader an edge over a dead trader.

So much for word games.
Kill the ego, or it will kill the mission.
  • #209
  • Nov 10, 2011 12:21am Nov 10, 2011 12:21am
Quoting AaronWard
You guessed it. LOL

Nothing I do influences prices. My job is to spot opportunities and that is my edge. As for my proof... a live trader has a "slight advantage" over a dead trader. And according to the on-line dictionary, this would give a living trader an edge over a dead trader.

So much for word games.
by that reasoning if you were trading beside me at the next desk on my left, but the location of our mutual broker was located 10 hours away somewhere off yonder but to my right.... then my closer proximity to our mutual broker trumps your trading location and my execution speed would provide me an edge over you.

taking things to extremes and limits is fun :nerd:
Congratulations ScalaFX for coming out of the closet!
  • #210
  • Nov 10, 2011 1:12am Nov 10, 2011 1:12am
Quoting nubcake
un-handicapping oneself does not provide an edge if the mechanics of the situation are still in favor of you losing overall.
Now that's what I call elegant! Sums everything up very neatly. IMHO, of course.
  • #211
  • Nov 10, 2011 1:33am Nov 10, 2011 1:33am
Quoting hanover
Now that's what I call elegant! Sums everything up very neatly. IMHO, of course.
how about that, aaron? you said it wasn't elegant, yet it got the hanover seal of approval!

lol.
Congratulations ScalaFX for coming out of the closet!
  • #212
  • Nov 10, 2011 1:46am Nov 10, 2011 1:46am
Quoting bumapatria

i am confused... really i dont know what u said
Buma,

If you want to understand what nubcake is saying, try answering the questions in post #120. When you think you have the right answers, check them against those in post #121 (which are correct).

If you think hard and long enough, you'll eventually see that any hedged position can be replicated by a non-hedge. Why? Because being hedged is exactly the same as being out of the market. And when you exit one of the positions in the hedge, you leave yourself either net long or net short, which can be achieved just as easily by opening a buy or sell position.

Conclusion: same-pair hedging offers no strategic or mathematical advantage.

In some ways, becoming profitable is a process of eliminating ideas that don't work. Delete same-pair hedging off your list of possibles, and you're one step closer. Then read the myths that I posted here, and think hard about them. If you can see the fallacy in these illusions, you're that much further ahead again.

I say the above as humbly as possible. I certainly don't claim to be infallible. If my conclusions are wrong or irrelevant, then satisfy yourself as to the reasons why, and you will have progressed anyway. Having said that, I would have saved myself a LOT of time if I'd understood all this at the start of my forex journey.

David
  • #213
  • Nov 10, 2011 1:51am Nov 10, 2011 1:51am
Quoting nubcake
how about that, aaron? you said it wasn't elegant, yet it got the hanover seal of approval!

lol.
Sadly, that source of all knowledge, the online dictionary does not agree with either Hanover or you when it comes to the meaning of the word edge. This is why he goes through the effort of defining it when he uses it.

I notice he did not say your definition was elegant, only your example. Also, I take exception with his use of elegant. Elegant would be something like:

EDGE!=NOT

So you both are wrong and I, and only I, am right.
Kill the ego, or it will kill the mission.
  • #214
  • Nov 10, 2011 1:59am Nov 10, 2011 1:59am
Quoting AaronWard
Sadly, that source of all knowledge, the online dictionary does not agree with either Hanover or you when it comes to the meaning of the word edge. This is why he goes through the effort of defining it when he uses it.

I notice he did not say your definition was elegant, only your example. Also, I take exception with his use of elegant. Elegant would be something like:

EDGE!=NOT

So you both are wrong and I, and only I, am right.
you are full of health bars... if you remember one of my previous posts today.

you = durrrrrr.

lol, there's your elegance.
Congratulations ScalaFX for coming out of the closet!
  • #215
  • Nov 10, 2011 7:27pm Nov 10, 2011 7:27pm
Quoting hanover
Buma,

If you want to understand what nubcake is saying, try answering the questions in post #120. When you think you have the right answers, check them against those in post #121 (which are correct).

If you think hard and long enough, you'll eventually see that any hedged position can be replicated by a non-hedge. Why? Because being hedged is exactly the same as being out of the market. And when you exit one of the positions in the hedge, you leave yourself either...

Steviet

OK but on a serious note (and at the risk of being controversial - who me? surely not ), aren't you really saying that because you haven't worked out a way of doing this profitably, it can't be done?

700 trades in nearly 6 months, 695 winning trades, 5 losing trades, in my 6th consecutive profitable month I beg to differ.

Maybe I could have been more profitable trading another way but I'm telling you it can be done.

Attached is a quick notepad file for my trades on a six figure live account at SaxoBank from Jan 13th when I started trading live. 88 trades, 88 wins.

Look I'm not trying to be boastful or anything, merely saying that it can be done! Just because it's vastly different from the way most trade doesn't make it any less valid.

OK, off me soap box

Kind Regards
Steve
Attached Files http://www.forexfactory.com/images/attach/txt.gif jan08.txt (16.8 KB, 256 views)

Again, I say if you're not successful and you read posts about great traders being unsuccessful at hedging (merlin comes to mind) that tells me they may not be all that successful..also the losing 95% also tells me that most likely all the traders commenting on this method may be unsuccessful..think about who's commenting..study them real close..I think you'll see by their posts and comments that they most likely are unsuccessful..I personally don't believe even 1% are successful in forex (after 2 years) ..people just want you to think they are.

Btw - steviet used a 1000 pip stop (basically no stop) and added positions to his losing trades (which you all claim is for losers only lol)..he knew they'd come back and 99% did..so you see, once again people saying things they really have no knowledge about. (sigh) will they ever go away..probably not.
entry - 1.29250 s/l 200 pips
  • #216
  • Nov 10, 2011 8:03pm Nov 10, 2011 8:03pm
normfx, the ff detective....

steviet, as per your post, used a stop. at SOME POINT he said "fuck this i'm wrong". if you want to enjoy the thought of averaging down then have at it norm, but the position of most muppets is that they average down until they bust their account out of play entirely.

that's NOT what your post is referring to at all. one might consider it to be a form of scaling-in, if anything.

as for hedging.... ffs how many times does it have to be said. hedging has nothing to do with having opposing trades on the same currency pair... THAT IS HAVING NO POSITION, APART FROM THE SPREAD FLUCTUATIONS STILL BEING PERMITTED TO AFFECT THE ACCOUNT BALANCE.

you can keep trying all you like to prove how 'hedging' is this and that, but when you expand your mind and see through the bullshit you will come to an understanding and level of perspective greater than you currently have.

facts are that the few situations where a nedge might be preferable have not been discussed. bob likes to talk about 'pausing time' and this is bullshit and NOT one of the situations i am referring to. maybe, if you are lucky, some day you will see further than you currently do, and that day is the day you start to understand what the rest of us are saying.

we aren't a bunch of naysayers.... we just know what the fuck we are talking about, and to a degree far greater than those who want to say that we don't.
Congratulations ScalaFX for coming out of the closet!
  • #217
  • Nov 10, 2011 8:22pm Nov 10, 2011 8:22pm
further to my last post....

if ANYTHING is the gravity within this joint it's the things hanover says. he isn't an almighty deity to be worshipped and followed without thought... but so far the trend is that something like 9 times out of 10 what hanover says is on the money and factual.

if hanover is right 90+% of the time with the things he says, comes from a gaming background and therefore has an idea about what is and what is not going to provide one with a positive or negative reward skew, comes from a programming background where logic is the be all and end all and where if your logic is wrong you get a broken non-functioning program...... then why the hell do you bother trying to refute what he has said?

i like to think i'm similar to hanover in that i know that i'm right most, if not virtually all, of the time. i'm not just floundering around taking wild guesses about different topics hoping to be right like most muppets do. i say what i know, and know what i say. i too come from a programming background and can run rings around most of the script kiddies in this joint, therefore i too can push a logical thought from start to finish and find any flaws. where we differ is that i don't give a rats fucking ass about any of this shit on the forum and don't mind speaking my mind. hanover is much more polite than i am and will permit bullshit to run freely, and in that way is how he doesn't care about stuff on here.

so do you really think quoting some old post from years ago is going to refute anything any of us have said? really? ok then, good luck with that!
Congratulations ScalaFX for coming out of the closet!
  • #218
  • Nov 10, 2011 10:30pm Nov 10, 2011 10:30pm
Quoting normfx
Steviet

OK but on a serious note (and at the risk of being controversial - who me? surely not ), aren't you really saying that because you haven't worked out a way of doing this profitably, it can't be done? .......
Norm, with respect, I'm afraid you've missed the point completely.

Do I believe it's possible to be profitable using same-pair hedges (aka 'nedges')? ABSOLUTELY YES. Heck, I've done it myself.

Do I believe that it's possible to capture exactly the same pips as a hedger, without hedging at all? ABSOLUTELY YES. How? By simply timing my entries and exits at the same points as the hedger adjusts his hedge, to maintain the same net position at every point along the way.

Have I contradicted what I said in my previous post? ABSOLUTELY NOT. If it is possible to capture exactly the same pips (and therefore the same P/L) without hedging, then hedging in itself offers no strategic or mathematical advantage.

This is not a trading issue, it is basic math. I don't wish to post the same material all over again. If you want to understand my position, work through the logic in post #120, and you'll hopefully see hedging for what it really is. Note how the hedger made money, and the non-hedger made exactly the same money. Some people see it, and others don't.

If you think that I'm debating things that I "really have no knowledge about", well, that's your prerogative. I am too jaded to defend my position, and besides, whatever anybody else believes has zero effect on my bottom line.

David
  • #219
  • Nov 10, 2011 10:51pm Nov 10, 2011 10:51pm
Just wanted to add: it was by studying the methods of StevieT and TitanFX that I reached the conclusions that I did. Here is my 'epiphany' post, from back in early 2008.
  • #220
  • Nov 11, 2011 12:29am Nov 11, 2011 12:29am
David and Nubs,

I would to clarify one thing. Although from the perspective of the English language you can include psychology on the edge (broadly defined) side of the balance sheet, I completely agree that practically speaking psychology plays second fiddle to entries and exits.

Very simply:

Good psychology + bad entries and exits will in short order lead to bad psychology + bad entries and exits.

Conversely, bad psychology + good entries and exits will in short order lead to good psychology + good entries and exits.

So if you want to have forex game... focus on your entries and exits.
Kill the ego, or it will kill the mission.
0 traders viewing now