Trading risk - what about hedge funds? | Forex Factory

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Trading risk - what about hedge funds?

  • #1
  • First Post: Sep 23, 2014 9:55am Sep 23, 2014 9:55am
Say you have 500.000$ on your personal account. Most would never risk more than 2% on a single trade, right?


But what about investors in hedge fund companies? And do they invest all that capital?
  • #2
  • Sep 24, 2014 1:54am Sep 24, 2014 1:54am
So nobody has any idea about the retail vs hedge fund trading risk?
  • #3
  • Edited 2:32am Sep 24, 2014 2:14am | Edited 2:32am
Risk x percent on any single trade = Death by a thousand cuts.
  • #4
  • Sep 24, 2014 2:28am Sep 24, 2014 2:28am
The daily SL is set to 0.5% with an integrated worst case hard SL of 1%.

If you already reached -5% in a month the account will be halted and you have to explain yourself.

No, you don't invest all capital.
  • #5
  • Sep 24, 2014 2:41am Sep 24, 2014 2:41am
That little? Reason why I ask is because we always hear about those high risk hedge funds, and to me 5% is not high risk, medium maybe.
  • #6
  • Oct 17, 2014 7:30am Oct 17, 2014 7:30am
Quoting UnnamedPlayr
The daily SL is set to 0.5% with an integrated worst case hard SL of 1%. If you already reached -5% in a month the account will be halted and you have to explain yourself. No, you don't invest all capital.

I thought most hedge funds are quantitative or HFT. What sort of returns are typical for currency only hedge funds?
  • #7
  • Oct 17, 2014 8:44am Oct 17, 2014 8:44am
Quoting vashst
That little? Reason why I ask is because we always hear about those high risk hedge funds, and to me 5% is not high risk, medium maybe.
Five percent on $100 might not be a lot. Five percent on a trader's several million dollar account is no small peanuts. It's all relative. I can say stop losses are larger than one thinks. They have the capital to sway in the markets. I don't think there are many non-HFT funds that day trade that are consistently profitable.
When the facts change I change my mind, what do you do sir
  • #8
  • Oct 17, 2014 10:01pm Oct 17, 2014 10:01pm
Quoting FXTriumph
{quote} I thought most hedge funds are quantitative or HFT.
Nope.
Two of my buddies trade stocks only with enormous risk reward ratios (it's like if the EURUSD would move every single day 300-500 pips).
For the average daytrader it's very hard to compete here (because of the lack of money).


Quoting FXTriumph
{quote}What sort of returns are typical for currency only hedge funds?
I'm not sure if a hedge fund would restrict its trading activities to FX only but if you can make 10%+ per year that's pretty good. ;-)
  • #9
  • Oct 17, 2014 10:17pm Oct 17, 2014 10:17pm
Quoting UnnamedPlayr
{quote} Nope. Two of my buddies trade stocks only with enormous risk reward ratios (it's like if the EURUSD would move every single day 300-500 pips). For the average daytrader it's very hard to compete here (because of the lack of money). {quote} I'm not sure if a hedge fund would restrict its trading activities to FX only but if you can make 10%+ per year that's pretty good. ;-)
UnamedPlayr is this indicator good to find the value of a currency pair like you said in a post a while ago?http://www.forexfactory.com/showthread.php?t=163158
  • #10
  • Oct 17, 2014 10:19pm Oct 17, 2014 10:19pm
i see that this is calculated weighted like you said
  • #11
  • Last Post: Oct 17, 2014 10:28pm Oct 17, 2014 10:28pm
Quoting vashst
Say you have 500.000$ on your personal account. Most would never risk more than 2% on a single trade, right? But what about investors in hedge fund companies? And do they invest all that capital?
Typically they wold be diversified in a big way, but not necessarily hedged as the name might suggest. It's individual to the fund because a hedge fund is simply an entity with one goal: to make money. How they do that is optionless. For starters; you can have high risk funds, low risk funds, or any combination of both. Then the strategies employed and the instruments traded are up to the fund so the list is literally endless. But I think it would be a pretty amateur fund that takes $500,000 capital, focuses on FOREX and trades 2% risk with "X" pips stop loss. But who knows, anything is possible. This is just my assumptive opinion.
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