Is hedging a dumb idea

Like many other people, I think global markets will tank this year.

I was thinking about opening two equal, opposite, large (for me) positions. One shorting DAX and one going long EU50. I suppose if you have a broker who allows direct hedging you could just do it with one index.

Then I would would do nothing for months. Maybe even all year.

Then, when I think the market is forming a bottom, and the rest of the world thinks so too, I will start looking for really prime RR setups. When I think I have a good one, I'll take off my short hedge and let the long one head back up.

I wouldn't just do an outright short with that sized position because my account couldn't handle volatility/draw down with that sized position. But it buys me 6-12 months of learning to become a better trader, practice trade set ups, etc., so that when I think it's time to close the short, I have a better chance of success.

Worst case scenario, I try 5-6 times to close it and fail each time, and lose 1/2 my account. Or market never tanks and I have paid the spread on two large positions for nothing.

What is the difference between this and just waiting until that future point and buying or selling? It seems like paying the spread for no reason. FYI even with a US broker if you have subaccounts you can long in one and short in the other.

I wouldn't be able to go long in one account and short in the other or volatility would kill both accounts pretty quickly. Assuming in the future I found a good spot to close the short position, then after that I'd also start looking to add to the long position. I figure 6-12 months for the market to go down, but 6-7 years for it to get back up again, so I'd be buying the dips along the way.

I'm trying to find a way to win on the way down and on the way up, without risking too much right now, because I don't think I have the skills yet to manage a large, unhedged position. Oh, plus, the overnight interest for holding a long EU50 position for 12 months would pretty much pay the spread for my first attempt to close the DAX position. So that's kind of like a free try, assuming I pick a good enough entry to set my SL to BE.

I also thought S&P would tank when it was 1400. Then I thought it would tank when it was 1700. Then I thought it would tank when it was 2000, 100%. Then I thought it would tank when it was 2100.

So you think something will happen - and you trade based on that. That state of mind has made me burn 6 accounts, and many time destroyed my profits from many trades before.

Sure you can try to leave it running a long time...but you will learn nothing. Btw, S&P tanked 10%+ from previous highs already, so it is officially in correction territory. But to say that it will tank more based on "newsmakers" and catastrophy callers...it's dangerous.

For example, S&P has made a nice rounded top pattern (with whipsaws) within 2015, which, if fulfilled, could produce a decline of 400 points - down to 1700. That is technical aspect (and a minor part of it).

Cheers DA. I 'think' it based on my technical analysis (measured target of HS topping pattern confluence with 0.618 fib and 2007 high), and, you know, zerohedge. I've been bearish since before August. I caught all the August flash crash pips but missed most of January's leg down (Xmas, family, holidays, etc.). So anyway, I 'think' it has further to go. Doesn't feel like capitulation yet, everyone talking bearish but no one seems truly fearful. Market needs to get emotionally cleansed with a good dose of panic. I say all this with only 12 months of trading, following markets, etc under my belt, so I could very well be regurgitating fallacious arguments and sentiment I've read elsewhere, but hey, that's better than not bothering to try to get an opinion, right? Anyway, rambling over. Need coffee.

Hedging no dumb idea, main thing is find correct distance between additional orders.

all good ML

We will see - I'm not in a state where I could watch my positions(s) more than 10 working days since I base my trades on daily chart patterns solely - and I try to take the swings (for example I opened short at Dec 31 at 2063) and took profit at 1907, a week later). (Stopped using indicators, I don't need Bollinger bands or moving averages or macd (and similar) to know when are moving averages converging or diverging, when the price cuts the upper/lower BB etc...But I absolutely avoid reading stuff about "general market sentiment" and many fundamental aspects of US economy which analysts point to. There have been people who have been saying US economy is in shambles and that QE WILL totally ruin it to a point that 2008 crisis will seem like children's play...Those people have been saying it since QE1...After QE1, Spx added another 50% So eventually everyone will get it right, but their timeframes are screwed up, and that's what nobody can give you - the sense of time. Only charts, only technical analysis.
The point of 'technical' analysis is to remove emotions from trading. That's why it's called 'technical'. And assessing market sentiment for more than a few months - it's simply dangerous. In the end, it's all about earnings and revenue. AAPL, INTC, BAC, JPM, GS and the rest of the bunch don't care aoout fundamentals in economy. Or whatever ppl think drives such huge markets.

Cheers! (I think you might wanna try that experiment you were talking about - holding a short position on some of stock indexes for a year - but take small lots/leverage.)