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Hedging vs Stop Loss

  • #141
  • May 31, 2014 10:46am May 31, 2014 10:46am
Quoting SupraSense
{quote} Again, another clueless statement. Do you know what date it was proposed that the earth was not flat? Do you have any idea? Because it's very old, and dates way before the 16th century. As I said in my previous post wake up!
You really don't read or think much do you - I'm not arguing about when we found out the earth wasn't flat I'm saying that it doesn't matter whether something is true or not it's whether you believe it to be true or not that is important. a subtle difference I know but anyone with an IQ should have been able to pick up on it.
  • #142
  • May 31, 2014 10:48am May 31, 2014 10:48am
Quoting stewrigh
{quote} Yes thats true but it wasn't accepted as truth for centuries by most ppl and truth is subjective.
Thanks SS gotta go now
  • #143
  • May 31, 2014 10:48am May 31, 2014 10:48am
Quoting stewrigh
{quote} Yes thats true but it wasn't accepted as truth for centuries by most ppl and truth is subjective.
Yep, I'm confident there were idiots in the 16th century too. The world is overflowing with idiots.
  • #144
  • May 31, 2014 10:58am May 31, 2014 10:58am
I honestly think you can believe in a flat earth and still make money in the forex.

I honestly think you can hedge the same currency and still make money in the forex.

I honestly think you can use carefully placed fixed stop losses and make money in the forex.

Yet I do none of these. Go figure.


Look at my join date: 10 years from now if I am still alive, you will probably see my posting on FF: If there is an FF...
  • #145
  • May 31, 2014 11:01am May 31, 2014 11:01am
Quoting Rap Skallion
I honestly think you can believe in a flat earth and still make money in the forex. I honestly think you can hedge the same currency and still make money in the forex. I honestly think you can use carefully placed fixed stop losses and make money in the forex. Yet I do none of these. Go figure. Look at my join date: 10 years from now if I am still alive, you will probably see my posting on FF: If there is an FF...
Yes of course.

And you can make money with a broker charging you a fixed 3 pip spread on EURUSD, and you can make money with one charging you a fixed 1 pip spread on EURUSDeven though their midprice always agrees. But which one is better? Are we going to have people saying it's better to trade the 3 pip spread? I imagine those hedging prefer the 3 pip broker. They seem to like wasting money.
  • #146
  • May 31, 2014 11:01am May 31, 2014 11:01am
Quoting Rap Skallion
I honestly think you can believe in a flat earth and still make money in the forex. I honestly think you can hedge the same currency and still make money in the forex. I honestly think you can use carefully placed fixed stop losses and make money in the forex. Yet I do none of these. Go figure. Look at my join date: 10 years from now if I am still alive, you will probably see my posting on FF: If there is an FF...
Dude no one gives a fk about your "unique" and so "out of the box" style of trading .. And take me off ignore, I'm like one of the best trader here
like totally failure brah
  • #147
  • May 31, 2014 11:06am May 31, 2014 11:06am
Quoting simonb
{quote} Dude no one gives a fk about your "unique" and so "out of the box" style of trading .. And take me off ignore, I'm like one of the best trader here

Hahah take it easy Simon today is not a trading day, it should be more mellow, there are no positions in red or green today.
Being a trader is lonely, but being a great trader is lonelier still
  • #148
  • May 31, 2014 11:12am May 31, 2014 11:12am
Quoting SupraSense
{quote} Yes of course. And you can make money with a broker charging you a fixed 3 pip spread on EURUSD, and you can make money with one charging you a fixed 1 pip spread on EURUSDeven though their midprice always agrees. But which one is better? Are we going to have people saying it's better to trade the 3 pip spread? I imagine those hedging prefer the 3 pip broker. They seem to like wasting money.

If someone is hedging on bigger timeframes with smaller lots then the difference between 1 or 3 pips is peanuts. The argument also falls apart when you cannot determine if a trader would make the same mistakes hedging or stoploss because you cannot calculate human behavior. So it might be right on paper that a SL is easier and more straight forward, but my entire trading has been to go against most things that are said because they are simply not true, so what's on paper means little to me. This is not a right vs wrong issue, it's a which way is better for me as a trader issue.
Being a trader is lonely, but being a great trader is lonelier still
  • #149
  • May 31, 2014 11:17am May 31, 2014 11:17am
Quoting saneblane
{quote} If someone is hedging on bigger timeframes with smaller lots then the difference between 1 or 3 pips is peanuts. The argument also falls apart when you cannot determine if a trader would make the same mistakes hedging or stoploss because you cannot calculate human behavior. So it might be right on paper that a SL is easier and more straight forward, but my entire trading has been to go against most things that are said because they are simply not true, so what's on paper means little to me. This is not a right vs wrong issue, it's a which...
Already stated several times, if it's purely for psychological benefit but you recognise there's no advantage then fine. If you want to wear a pink shirt because it's lucky for your trading, fine. If you want to pretend there is an advantage to trading using this 'hedging', not fine. If you want to pretend you're better off paying a 3 pip spread rather than a 1 pip spread even though the midprices are always the same, then not fine.

It is a right v wrong issue.
  • #150
  • May 31, 2014 11:26am May 31, 2014 11:26am
Quoting SupraSense
{quote} Already stated several times, if it's purely for psychological benefit but you recognise there's no advantage then fine. If you want to wear a pink shirt because it's lucky for your trading, fine. If you want to pretend there is an advantage to trading using this 'hedging', not fine. If you want to pretend you're better off paying a 3 pip spread rather than a 1 pip spread even though the midprices are always the same, then not fine. It is a right v wrong issue.

it's not pretending anything, on a weekly timeframe with a small lot, and big moves the difference between 1 or 3 pips can be cents, cents. Last month I was in the same place you were arguing a hedge vs SL black and white but I came to realize that this is not school, and trading is an art and however you trade best is the best for you. All the math in the world cannot hold up to human emotions, it's the single biggest thing that cannot be put down on paper. You're brushing off the mental effects of trading like it's no big deal, but it's one of the biggest deals in trading.
Being a trader is lonely, but being a great trader is lonelier still
  • #151
  • May 31, 2014 11:31am May 31, 2014 11:31am
Quoting saneblane
{quote} it's not pretending anything, on a weekly timeframe with a small lot, and big moves the difference between 1 or 3 pips can be cents, cents. Last month I was in the same place you were arguing a hedge vs SL black and white but I came to realize that this is not school, and trading is an art and however you trade best is the best for you. All the math in the world cannot hold to human emotions, it's the single biggest thing that cannot be put down on paper.
Not debating emotional problems. You are making excuses for poor thinking.

The difference between 1 and 3 pips may not be much to you, but it is a difference. Probably for a lot of traders it will be the difference between being profitable and losing. A good trader knows that. When you go to the shop to buy something and you see a price, you don't decide to pay twice that price or 3 times that price just for the sake of it. Obviously if all prices are the same, it's better to pay less spread and lower commission. Anyone arguing with that is a fool. And the same logic applies to hedging. You're paying more for no benefit.
  • #152
  • May 31, 2014 11:33am May 31, 2014 11:33am
Guys I get it! Booking a loss is better than heding, at least if you don't know shit about it. So please stop fighting.
  • #153
  • May 31, 2014 11:36am May 31, 2014 11:36am
Quoting EveningStar
Guys I get it! Booking a loss is better than heding, at least if you don't know shit about it. So please stop fighting.
Nope, booking a loss is better, even if you know everything there is to know about hedging. It's always as bad or worse to hedge.
  • #154
  • May 31, 2014 11:40am May 31, 2014 11:40am
Quoting SupraSense
{quote} Not debating emotional problems. You are making excuses for poor thinking. The difference between 1 and 3 pips may not be much to you, but it is a difference. Probably for a lot of traders it will be the difference between being profitable and losing. A good trader knows that. When you go to the shop to buy something and you see a price, you don't decide to pay twice that price or 3 times that price just for the sake of it. Obviously if all prices are the same, it's better to pay less spread and lower commission. Anyone arguing with that...

You're missing the point all together, Trading is all about compromise. The best broker in town might have the worst spreads, so what are you going to do? go to the crappy one with good spreads? and what about taking a trade on a pair that has bigger spread than others, let's say that a high probability trade is on GBPJPY, you think I am not going to trade it because it has worst spreads than EURUSD? think again. And back to the hedging thing, some people don't even have spread, they have commissions sometimes that are way cheaper than spreads, again narrowing the gap between SL or Heding in cost. So if the cost negatives are miniscule when comparing both methods, the next thing you have to look for are the benefits, right? and any thing that benefits a trader is going to show in his trading some way or another.
Being a trader is lonely, but being a great trader is lonelier still
  • #155
  • May 31, 2014 11:48am May 31, 2014 11:48am
Quoting saneblane
{quote} You're missing the point all together, Trading is all about compromise. The best broker in town might have the worst spreads, so what are you going to do? go to the crappy one with good spreads? and what about taking a trade on a pair that has bigger spread than others, let's say that a high probability trade is on GBPJPY, you think I am not going to trade it because it has worst spreads than EURUSD? think again. And back to the hedging thing, some people don't even have spread, they have commissions sometimes that are way cheaper than spreads,...
No you didn't understand what I meant. I'll try again.

I have a choice of two brokers, one has bid ask 1.3599/1.3600 the other is offering 1.3598/1.3601 . For these two brokers, the mid price is always the same. One is a white label company of the other, they just add an extra pip either side. Which broker would you go for? It's not about good or bad brokers, it's about common sense. It's clear fact which one you should go for. Anyone going for the 3 pip broker is wasting money. Anyone doing hedging is wasting money.

Cost difference may seem miniscule to you, but it's not, and it's not in the long term. As for whether the difference is narrow or not, I'm not going to argue too much. Because it's not worth it. The simple fact is you will always do worse with Broker B than with Broker A regardless of strategy. The same applies to hedging. If you want to do worse intentionally and waste money unnecessarily, then you can go ahead and do that, it's your life. But don't kid yourself.
  • #156
  • Edited 12:07pm May 31, 2014 11:53am | Edited 12:07pm
Quoting SupraSense
{quote} Yes of course. And you can make money with a broker charging you a fixed 3 pip spread on EURUSD, and you can make money with one charging you a fixed 1 pip spread on EURUSDeven though their midprice always agrees. But which one is better? Are we going to have people saying it's better to trade the 3 pip spread? I imagine those hedging prefer the 3 pip broker. They seem to like wasting money.

No argument with that...

What if, however, the 3-pip broker offers a better trading platform with a set of special tools you like. (Yes, MT4 does not offer you all the tools other platforms do).

What if the 3-pip broker offers you pairs to trade that the other simply does not?
Oanda offers more pairs to trade than the use house of IBFX , the last time I looked. I have been with IBFX for some five years now, seen several changes, and was almost tempted to move by that, but didn't. Was I right? Maybe not. Was this serious? I don't think so.

Is there anybody out there that uses their money with 100% efficiency? Anybody?

However. your point, generally taken, is quite correct.
  • #157
  • May 31, 2014 11:55am May 31, 2014 11:55am
Quoting SupraSense
{quote} No you didn't understand what I meant. I'll try again. I have a choice of two brokers, one has bid ask 1.3599/1.3600 the other is offering 1.3598/1.3601 . For these two brokers, the mid price is always the same. One is a white label company of the other, they just add an extra pip either side. Which broker would you go for?.

So let me see if I am understanding you correctly, you think that spread size is the only thing that separates a good broker from a bad one. Lol I hope not because that would be the joke of the century, I am really curious, do you think that's all there is?. And it doesn't matter what term you're talking about if you're profitable you are profitable everything else is just the cost of doing business.
Being a trader is lonely, but being a great trader is lonelier still
  • #158
  • May 31, 2014 11:58am May 31, 2014 11:58am
Quoting EveningStar
Booking a loss is better than heding, at least if you don't know shit about it. So please stop fighting.
I think is usefull to talk about an hedge vs SL "strategy" ... and not an hedge vs SL "trade".

Hedging vs Stop Loss makes no sense, if you are discussing 1 trade long and 1 trade short in only one pair ... a flat position ... with no strategy into it ... without factoring more trades in other pairs ... with no MM ... with no risk management ... is better the Stop Loss

Hedging is more than open a trade oposite to the one that is losing money ...
There as to be a underlying strategy, usually on the longer TFs, with correlation among pairs built in it ... and one of the main objectives is to reduce de DD % and to increase the equity level.

EveningStar says "please stop fighting"
Don't swim with the sharks ...
  • #159
  • May 31, 2014 11:58am May 31, 2014 11:58am
Last thing I want to mention is that I've already shown, and it was shown 8 years ago on this very site, that hedging provides no benefit. So when I tell someone not to hedge, I can at least sleep sound knowing I haven't cost anyone to lose money unnecessarily.

However, those that propose hedging, it has already been shown that it can never do better than non-hedging and quite often does worse. If a new trader reads your comments sayign hedging is good and believes them you could be losing him 100's or 1000's of dollars or more. How people that do that can sleep with a clean conscience I don't know. I think it's shameful.
  • #160
  • May 31, 2014 11:59am May 31, 2014 11:59am
Quoting saneblane
{quote} So let me see if I am understanding you correctly, you think that spread size is the only thing that separates a good broker from a bad one. Lol I hope not because that would be the joke of the century, I am really curious, do you think that's all there is?. And it doesn't matter what term you're talking about if you're profitable you are profitable everything else is just the cost of doing business.
Nope, not even close to what that post was talking about. Read it again. Given the choice of two brokers which are exactly the same in ALL respects apart from that one has a bigger spread than the other, which one would you pick. It's basic, but it's no less basic than the hedging stuff that some can't grasp.
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