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hedging with two brokers?

  • #1
  • First Post: Aug 18, 2006 6:15pm Aug 18, 2006 6:15pm
I was thinking about opening two different forex account with two DIFFERENT broker for the purpose of hedgeing my trades. The broker probally would not know about these two accounts, but is this against the law or prohibited in anyway??

Do any of you guys do it?
  • #2
  • Aug 18, 2006 6:27pm Aug 18, 2006 6:27pm
Quoting Crestwind
I was thinking about opening two different forex account with two DIFFERENT broker for the purpose of hedgeing my trades. The broker probally would not know about these two accounts, but is this against the law or prohibited in anyway??

Do any of you guys do it?
Many traders have multiple forex accounts. Myself included. Just because you are long with one and short with another... doesn't make any difference. If it does... I better not answer the door when I see a black Crown Vic outside .

Seriously though, no. It isn't prohibited.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #3
  • Aug 18, 2006 8:42pm Aug 18, 2006 8:42pm
Quoting Crestwind
I was thinking about opening two different forex account with two DIFFERENT broker for the purpose of hedgeing my trades. The broker probally would not know about these two accounts, but is this against the law or prohibited in anyway??

Do any of you guys do it?
Suggestion to capitalize on earning interest:
Interest positive pairs account with a broker which pays interest e.g. Oanda; and
Interest negative pairs account with a broker which doesn't pay interest e.g. ... well, I know one, however its name is anathema on this forum, so I am not going to pronounce it. I believe there are others though.
  • #4
  • Aug 18, 2006 8:50pm Aug 18, 2006 8:50pm
Quoting Crestwind
I was thinking about opening two different forex account with two DIFFERENT broker for the purpose of hedgeing my trades. The broker probally would not know about these two accounts, but is this against the law or prohibited in anyway??

Do any of you guys do it?
There are some brokers where you can hedge with same broker without using extra margin.If you open two accounts with two brokers then you will be using extra and unnecessary margin.
It is totally legal to open account with as many brokers as you like.
  • #5
  • Aug 18, 2006 9:42pm Aug 18, 2006 9:42pm
I want to say thank you to everyone that answered my post.

Thanks
  • #6
  • Aug 18, 2006 10:48pm Aug 18, 2006 10:48pm
Quoting StockKJay
Many traders have multiple forex accounts. Myself included. Just because you are long with one and short with another... doesn't make any difference. If it does... I better not answer the door when I see a black Crown Vic outside .

Seriously though, no. It isn't prohibited.
i seen two outside my door today. lmao
If I Go Broke Trying Then I Will die happy.
  • #7
  • Aug 20, 2006 1:49am Aug 20, 2006 1:49am
Pardon me asking but, what are the uses of Hedging?

All I know is that hedging can be used in place of Straddle to eliminate the huge "spreads" created during news time. Anything else? (dont laugh, I am relatively new to forex )
  • #8
  • Aug 20, 2006 2:12am Aug 20, 2006 2:12am
Quoting BurgerKing
Pardon me asking but, what are the uses of Hedging?

All I know is that hedging can be used in place of Straddle to eliminate the huge "spreads" created during news time. Anything else? (dont laugh, I am relatively new to forex )
Plz read thread:Kolachi as Professional trader carefully.
  • #9
  • Aug 21, 2006 2:59am Aug 21, 2006 2:59am
Quoting Crestwind
I was thinking about opening two different forex account with two DIFFERENT broker for the purpose of hedgeing my trades. The broker probally would not know about these two accounts, but is this against the law or prohibited in anyway??

Do any of you guys do it?
I don't see an advantage of having 2 accounts in different brokers to hedge your position.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>

There are brokers who allow you to hedge, depending on the account you open.<o></o>

<o> </o>

Anyways, that doen't constitute a felony. Many of us would be behind bars if so!!<o></o>
  • #10
  • Aug 21, 2006 5:48am Aug 21, 2006 5:48am
Quoting Crestwind
I was thinking about opening two different forex account with two DIFFERENT broker for the purpose of hedgeing my trades. The broker probally would not know about these two accounts, but is this against the law or prohibited in anyway??

Do any of you guys do it?
Hi Crestwind,

Can you advise me as to why you want to use hedging, and what you see arre the advantages??

"hedging " to me is simply hiding a loss under another opposite trade...and sooner or later, when the hedge comes off, there is an ugly loss exposed...I don't like that concept !!! (However, to those who use them, I say, different strokes for different folks...that is, its a personal choice).

Jacko
  • #11
  • Aug 21, 2006 6:50am Aug 21, 2006 6:50am
Quoting jacko
Hi Crestwind,

Can you advise me as to why you want to use hedging, and what you see arre the advantages??

"hedging " to me is simply hiding a loss under another opposite trade...and sooner or later, when the hedge comes off, there is an ugly loss exposed...I don't like that concept !!! (However, to those who use them, I say, different strokes for different folks...that is, its a personal choice).

Jacko

In another Forum, I looked at the concept of hedging and couldn't see it as an attractive option. As such I tried another method:

Scenario 1

Currently, this is what seems to happen to some Traders...

1. you put a trade on and you put a stop loss of around 40- 50 pips
2. the market goes against you (horrors....I was wwwwwrong !! )
3. let the market continue...it will probably go say another 30 - 100 pips past your stop...who knows ???
4. FINALLY, the market comes back around and starts to head in the opposite direction
5. by now you are totally hacked off with the market and you let it go


The solution that that I am considering is a pretty simple one but one that has to be executed without fail...

Scenario 2

That strategy is:

1. you put a trade on and you put a stop loss of around 40- 50 pips
2. the market goes against you (horrors....I was wwwwwrong !! )
3. let the market continue...it will probably go say another 30 - 100 pips past your stop...who knows ???

4. PUT AN ORDER IN AT THE EXACT SAME FIGURE AS YOUR STOP LOSS (if you were originally "short" then place a "short" order) This ensures that when the market comes back, as it invariably does, you have a DEFINATE order in place to put you back in the market where you were originally...and you are now in the same direction as the market is moving..

5. FINALLY, the market comes back around and starts to head in the opposite direction
6. The market picks you back up on its new direction

7. THE ADVANTAGES OF THIS (THEORETICAL) STRATEGY IS THAT
a. IT HAS AN EFFECTIVE AND DISCIPLINED COURSE OF ACTION
b. IT GIVES YOU A SPECIFIC "ENTRY" POINT
c. IT REDUCES LARGE DRAWDOWNS
d. IT PUTS YOU BACK IN THE MARKET EXACTLY WHERE YOU GOT OUT

I know that there are DISADVANTAGES with this strategy, buy I think that the overall effect of the advantages outweigh the disadvantages.

I also think that this strategy is more appealing to my business sense of minimising risk than the original concept of "hedging" that initially set me off to discover an alternative strategy to hedging.

As I have said in the previous posts, "hedging " to me is simply hiding a loss under another opposite trade...and sooner or later, when the hedge comes off, there is an ugly loss exposed...I don't like that concept !!! (However, to those who use them, I say, different strokes for different folks...that is, its a personal choice).

PLEASE NOTE: I am a medium to long term trend trader. The above method works best on those time frames. It works less well on short term time frames because of the volatile "noise" in the market.

Jacko
  • #12
  • Aug 23, 2006 2:28pm Aug 23, 2006 2:28pm
No need to open 2 accounts dude... What's the point? However I am currently with a broker that allows 2 way trading on a single pair and for a bonus no margin required on the hedge. Hedging is best applied when you are a deep drawdown trader (one of those wont let go of a loser trader) You just know it's gonna retrace..... If you are good at hyper speculating the probabilities of High lows and savy at market sentiment.. you can profit from this method. It does require constant attention.. Ever been 1 pip from a margin call??? This is an extream event but I do know psycho drawdown traders that have saved losses by hedging.
"Look Left Think Right"
  • #13
  • Aug 23, 2006 10:33pm Aug 23, 2006 10:33pm
Seems to me this method is going against a possible new trend. If it is, the new short order could be filled and head north again. I think it would be better to go long at your s/l point, instead of short.



Quoting jacko
In another Forum, I looked at the concept of hedging and couldn't see it as an attractive option. As such I tried another method:

Scenario 1

Currently, this is what seems to happen to some Traders...

1. you put a trade on and you put a stop loss of around 40- 50 pips
2. the market goes against you (horrors....I was wwwwwrong !! )
3. let the market continue...it will probably go say another 30 - 100 pips past your stop...who knows ???
4. FINALLY, the market comes back around and starts to head in the opposite direction
5. by now you are totally hacked off with the market and you let it go


The solution that that I am considering is a pretty simple one but one that has to be executed without fail...

Scenario 2

That strategy is:

1. you put a trade on and you put a stop loss of around 40- 50 pips
2. the market goes against you (horrors....I was wwwwwrong !! )
3. let the market continue...it will probably go say another 30 - 100 pips past your stop...who knows ???

4. PUT AN ORDER IN AT THE EXACT SAME FIGURE AS YOUR STOP LOSS (if you were originally "short" then place a "short" order) This ensures that when the market comes back, as it invariably does, you have a DEFINATE order in place to put you back in the market where you were originally...and you are now in the same direction as the market is moving..

5. FINALLY, the market comes back around and starts to head in the opposite direction
6. The market picks you back up on its new direction

7. THE ADVANTAGES OF THIS (THEORETICAL) STRATEGY IS THAT
a. IT HAS AN EFFECTIVE AND DISCIPLINED COURSE OF ACTION
b. IT GIVES YOU A SPECIFIC "ENTRY" POINT
c. IT REDUCES LARGE DRAWDOWNS
d. IT PUTS YOU BACK IN THE MARKET EXACTLY WHERE YOU GOT OUT

I know that there are DISADVANTAGES with this strategy, buy I think that the overall effect of the advantages outweigh the disadvantages.

I also think that this strategy is more appealing to my business sense of minimising risk than the original concept of "hedging" that initially set me off to discover an alternative strategy to hedging.

As I have said in the previous posts, "hedging " to me is simply hiding a loss under another opposite trade...and sooner or later, when the hedge comes off, there is an ugly loss exposed...I don't like that concept !!! (However, to those who use them, I say, different strokes for different folks...that is, its a personal choice).

PLEASE NOTE: I am a medium to long term trend trader. The above method works best on those time frames. It works less well on short term time frames because of the volatile "noise" in the market.

Jacko
  • #14
  • Aug 24, 2006 4:49am Aug 24, 2006 4:49am
Quoting eagle4x
Seems to me this method is going against a possible new trend. If it is, the new short order could be filled and head north again. I think it would be better to go long at your s/l point, instead of short.
Hi Eagle4x

I agree with what you say. (As long as it is in the short term)

However, as stated in the previous post, I am a medium to long term trend trader

Therefore, rather than use stop loss point to go long, I prefer to let the market "qualify" the trend reversal by letting it go at least 75 pips past my stop loss and then get back in when the trend has reversed.

The whole point of this exercise is to be a longer term trend trader but to minimise the drawdown size of that type of trading.

I hope that that is a clear explanation

.

This may mean that the order sits there for some time. But
  • #15
  • Sep 25, 2013 10:45am Sep 25, 2013 10:45am
Hello Guys. I think bonus hunting is there in the hedging of two different accounts with two different brokers and both offering the bonus. So if one account stops out, the other account gets a bonus amount as more than the exact value of the first broker account that stopped out. So for this purpose and free money, hedging two accounts with two different brokers can be profitable.

I do not know whether it is legal or not. And also I do not know that whether any of the brokers will be able to know that the bonus has been abused in this way.
  • #16
  • Oct 8, 2013 1:16pm Oct 8, 2013 1:16pm
Quoting jacko
{quote} In another Forum, I looked at the concept of hedging and couldn't see it as an attractive option. As such I tried another method: Scenario 1 Currently, this is what seems to happen to some Traders... 1. you put a trade on and you put a stop loss of around 40- 50 pips 2. the market goes against you (horrors....I was wwwwwrong !! ) 3. let the market continue...it will probably go say another 30 - 100 pips past your stop...who knows ??? 4. FINALLY, the market comes back around and starts to head in the opposite direction 5. by now you are totally...
If you know for sure that it would be a reversal in 30-100 pips after you stop loss, what does prevent you from exit at where your original stop loss was and re enter after 30-100 pips? And in this scenario you will save extra spread that you would waste in your scenario, i.e. locking at stop loss level (spread paid), exiting lock after 30 pips (spread paid) and closing your original position (spread paid)
  • #17
  • Oct 12, 2013 6:11pm Oct 12, 2013 6:11pm
Quoting ainazak
Hello Guys. I think bonus hunting is there in the hedging of two different accounts with two different brokers and both offering the bonus. So if one account stops out, the other account gets a bonus amount as more than the exact value of the first broker account that stopped out. So for this purpose and free money, hedging two accounts with two different brokers can be profitable. I do not know whether it is legal or not. And also I do not know that whether any of the brokers will be able to know that the bonus has been abused in this way.
It may be an interesting strategy though you should keep in mind that 1) broker has a right to cancel your bonus whenever he wants 2) not all bonuses may be used for a loss. It seems unlikely that broker will realize what you are doing, but you should also understand that this broker is pure market maker, i.e. will do everything that you lose
  • #18
  • Aug 31, 2014 1:42pm Aug 31, 2014 1:42pm
It may be an interesting strategy though you should keep in mind that 1) broker has a right to cancel your bonus whenever he wants 2) not all bonuses may be used for a loss. It seems unlikely that broker will realize what you are doing, but you should also understand that this broker is pure market maker, i.e. will do everything that you lose
  • #19
  • Sep 9, 2014 9:42am Sep 9, 2014 9:42am
I am doing hedging with 4 brokers actually. Here is my list: Dukascopy, Armada Markets, Citi, FXCM. Oanda is also good.
  • #20
  • Sep 9, 2014 3:52pm Sep 9, 2014 3:52pm
No point running opposite trades as yes, you are simply not willing to admit that you are wrong. Don't even get into this state of denial as it will get you to hold on to losing trades and that means you will blow up. Work on your your psychology (forget that ego - you put that stop loss there in the first place before you put on that trade so lean to accept that you are wrong) and executing your strategy flawlessly. Read Mark Douglas Trading in The Zone - good luck & good trading!
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