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Hedging/Nedging

  • #81
  • Apr 23, 2017 1:27am Apr 23, 2017 1:27am
Just put a trade on, get out of that trade, and get on with your life man...for the love of God....
Look Sharp/Trade Tight
  • #82
  • Apr 23, 2017 2:06am Apr 23, 2017 2:06am
Quoting dukas_trader
{quote} true. i have never seen a good trader using hedging...
why are you guys so certain about hedging? is it possible you are missing something out? like, all buy/sell pips are trying to be in almost constant equilibrium? could be this? trying is the important verb here. pips equilibrium is not possible in a trend, of course, but that is what certain maps applied on a chart do suggest... in the retracements, the rate is trying to balance the pips out.

examine the candles. all candles are trully in almost perfect equilibrium. almost 50/50 for buy/sell candles.

just try to look at things DIFFENTLY, otherwise you will come to the same conclusions, as 99.99% of all traders do come. ask any honest LP. if they are honest, they will tell you the exact % of the profitable trades (in a long run). you guys can only dream about that % to be 90%, as they delude you on all forums/books/courses/whatever...

hedging is simple. one side just close in different time. the problem why it cant be a net position comes from the fact that it is impossible to know how deep the movement will be. why miss out on the correction move?

never forget: EVERYTHING IS POSSIBLE
Maadik Hugiis. IQ 69.
  • #83
  • Apr 23, 2017 2:29am Apr 23, 2017 2:29am
Ok, fine...

So lets say I get long some Euros.

Say I bought 10 cars at 1.06.

Market moves up to 1.08, and I'm like well we cant go strait up, maybe I lighten the load a tad, and I sell 3 cars at 1.08

Now the market pulls back to 1.07, looks like good support, I think Ill get my full line on, so I buy 3 cars at 1.07

Now I'm long 10 cars again....

you mean like that?
Look Sharp/Trade Tight
  • #84
  • Apr 23, 2017 2:37am Apr 23, 2017 2:37am
Quoting MoneyZilla
{quote}never forget: EVERYTHING IS POSSIBLE
Flap your arms and show us how to fly.

No? Oh, ok. I guess you must be wrong then. What an absolute surprise.
Congratulations ScalaFX for coming out of the closet!
  • #85
  • Apr 23, 2017 2:59am Apr 23, 2017 2:59am
Hi,

To my opinion by hedging you only buy time. You lock your DD.
This can have several reasons like what will happen in the weekend or market not clear or xx.
But one day you have to close one of the two.
The quality of this decision will determine if your hedge was succesfull.

BR
It is not important how often you fall down, but how often you get up again
  • #86
  • Apr 23, 2017 3:00am Apr 23, 2017 3:00am
Not sure if this is nedging/hedging or whatever but deploy this tactic quite often especially in range or on fringes of hourly swing when I think tide on a larger scale could be about to turn, like anything it's never perfect but if your risk is deliberate in that you are satisfied with the proceeds of half a position it is good way to catch runner. Many times second half of position will both die but that does not affect the net outcome of being long and short. It does rely on precision entry and is definitely not a add to a loser type scenario.
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Once You See, You Can't Unsee But You Will Get The Odd Poke In The Eye
  • #87
  • Edited 3:30am Apr 23, 2017 3:20am | Edited 3:30am
Quoting Stu Effex
Not sure if this is nedging/hedging or whatever but deploy this tactic quite often especially in range or on fringes of hourly swing when I think tide on a larger scale could be about to turn, like anything it's never perfect but if your risk is deliberate in that you are satisfied with the proceeds of half a position it is good way to catch runner. Many times second half of position will both die but that does not affect the net outcome of being long and short. It does rely on precision entry and is definitely not a add to a loser type scenario....
The way I see it is this.

Your long a car
Then your long half a car
Then your short half a car
Then your Flat.

But that's just they way I see it....in so far as what you show there...

and yes I realize that when the market takes your half lot long stop out, you will flip to short half a car....but till then, your flat
Look Sharp/Trade Tight
  • #88
  • Apr 23, 2017 3:25am Apr 23, 2017 3:25am
Quoting MoneyZilla
hedging is simple. one side just close in different time. the problem why it cant be a net position comes from the fact that it is impossible to know how deep the movement will be.


So how do you know then when it's time to close one side? And if you know the levels/point(s), you can just trade it with simple net positions.
"Men Who Can Both Be Right & Sit Tight Are Uncommon" ~ Jesse Livermore
  • #89
  • Apr 23, 2017 3:30am Apr 23, 2017 3:30am
IMO you only hedge if necessary. With proper calculated risk. BREAKING DOWN 'Hedge'
Hedging is analogous to taking out an insurance policy. If you own a home in a flood-prone area, you will want to protect that asset from the risk of flooding – to hedge it, in other words – by taking out flood insurance. There is a risk-reward tradeoff inherent in hedging; while it reduces potential risk, it also chips away at potential gains. Put simply, hedging isn't free. In the case of the flood insurance policy, the monthly payments add up, and if the flood never comes, the policy holder receives no payout. Still, most people would choose to take that predictable, circumscribed loss rather than suddenly lose the roof over their head.
Self discipline It is a practice
  • #90
  • Apr 23, 2017 3:43am Apr 23, 2017 3:43am
Quoting okshop
while it reduces potential risk, it also chips away at potential gains.
It will just make you flat, same like just closing the trade, but when you hedge on the same instrument, you will pay more costs for the same effect.
"Men Who Can Both Be Right & Sit Tight Are Uncommon" ~ Jesse Livermore
  • #91
  • Edited 3:59am Apr 23, 2017 3:49am | Edited 3:59am
Quoting PayTheLimit
{quote} The way I see it is this. Your long a car Then your long half a car Then your short half a car Then your Flat. But that's just they way I see it....in so far as what you show there... and yes I realize that when the market takes your half lot long stop out, you will flip to short half a car....but till then, your flat
Yes you are correct the middle ground is flat. This is why I say risk is adjusted in that you are content with the proceeds of half of a position. I did that in a very basic way but you can take one step further and assume you take multiple positions both ways and yet treat each trade in isolation in terms of set up. So always taking half and always having other half at BE. Exposure is never greater than having a single position open. So you just keep taking trades as they set up taking half and have no regard for the other half except for the knowledge that it is always BE. You will occasionally get half a position that runs well beyond the middle ground of the long and short trades which can give many multiples on original risk. So this thinking is never about trying to counter a losing trade although is still long and short in same instrument. So from that perspective I suppose isn't technically a hedged trade but just trying to highlight there can be an advantage to working this way. It isn't wild conjecture, I have had many a trade were maybe the middle ground was say 40 pips and the surviving half run on for hundreds of pips. The psychological aspect to this is being satisfied with the gain from half a position and treating every trade in isolation and never adding to initial risk parameters.

Edit: I know some get hung up over commissions but it's not a concern from a personal standpoint. I have long reconciled with the fact that if you have a broker that let's you operate in a way that doesn't impede your objectives happy to give them a cut.
Once You See, You Can't Unsee But You Will Get The Odd Poke In The Eye
  • #92
  • Apr 23, 2017 3:55am Apr 23, 2017 3:55am
Quoting michisuperfr
{quote} It will just make you flat, same like just closing the trade, but when you hedge on the same instrument, you will pay more costs for the same effect.
Example a short on USDCHF with insurance and an option to skip hedge when profitable or come out with breakeven. This is just a simple hedge there are more complex hedge.
A perfect hedge is one that eliminates all risk in a position or portfolio. In other words, the hedge is 100% inversely correlated to the vulnerable asset. This is more an ideal than a reality on the ground and even the hypothetical perfect hedge is not without cost. Basis risk refers to the risk that an asset and a hedge will not move in opposite directions as expected; "basis" refers to the discrepancy.
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Self discipline It is a practice
  • #93
  • Apr 23, 2017 4:01am Apr 23, 2017 4:01am
Quoting nubcake
{quote} You are just creating a narrative to fit your viewpoint. It's not based in reality until such time as you can show that players like Goldman EVEN KNOW WHAT A NEDGE IS to start with, AND Even more importantly, CAN CREATE SUCH AN OBSCENE NON-POSITION in the first place. Do you really think they use MT4? Come on now. Come back to reality.
As for my motivations it is the opposite: I observe the data ("the gap always closes and once the gap is closed, the price very often bounces and resumes it's course") and am making a hypothesis as to what could have caused it. My hypothesis is that there are trapped last-moment big trades there by the gap. Why big: I don't have the power to move the market by tens of pips, but some players do.
Also, you seem to think Metatrader or retail accounts give you some possibility that pro accounts and software do not. I respectfully disagree.
k
  • #94
  • Apr 23, 2017 4:25am Apr 23, 2017 4:25am
Quoting okshop
{quote} Example a short on USDCHF with insurance and an option to skip hedge when profitable or come out with breakeven. This is just a simple hedge there are more complex hedge. A perfect hedge is one that eliminates all risk in a position or portfolio. In other words, the hedge is 100% inversely correlated to the vulnerable asset. This is more an ideal than a reality on the ground and even the hypothetical perfect hedge is not without cost. Basis risk refers to the risk that an asset and a hedge will not move in opposite directions as expected;...
What you do in the picture you can also do 100% the same without any hedging and simple net positions? You will not have more risk or less profit, but for sure less costs?
"Men Who Can Both Be Right & Sit Tight Are Uncommon" ~ Jesse Livermore
  • #95
  • Apr 23, 2017 4:30am Apr 23, 2017 4:30am
Quoting kprsa
{quote}Also, you seem to think Metatrader or retail accounts give you some possibility that pro accounts and software do not. I respectfully disagree. k
omg, you are actually serious.

Nedging is purely an aberration of the MT4 platform, borne out of technical laziness and a lack of understanding of what a net position is. That's why MT5 sought to erase this bullshit (not as some conspiracy against muppet amateurs, as some claim), because it was a stupid thing in the first place.

You are literally creating fiction so unbelievable that it's insulting. That you don't understand order flow and market mechanics DOES NOT EQUATE TO "It must be nedging". Of all the real reasons why markets move the way they do at certain times, you decide that it's because of this fantastical nedging bs?

Just, stop. Save face while you can instead of cementing your place as another crackpot.

Your account began in 2014. You should fucking know better by now. Shame on you. Seriously.
Congratulations ScalaFX for coming out of the closet!
  • #96
  • Apr 23, 2017 4:33am Apr 23, 2017 4:33am
Quoting Stu Effex
{quote} Yes you are correct the middle ground is flat. This is why I say risk is adjusted in that you are content with the proceeds of half of a position. I did that in a very basic way but you can take one step further and assume you take multiple positions both ways and yet treat each trade in isolation in terms of set up. So always taking half and always having other half at BE. Exposure is never greater than having a single position open. So you just keep taking trades as they set up taking half and have no regard for the other half except for...
Listen man, I understand. But to me, its still a wash. In your above example, once you go flat, you are essentially working a buy stop and a sell stop for a half of car, waiting for a breakout.

Again, that's how I see it...
Look Sharp/Trade Tight
  • #97
  • Apr 23, 2017 4:43am Apr 23, 2017 4:43am
Quoting michisuperfr
{quote} What you do in the picture you can also do 100% the same without any hedging and simple net positions? You will not have more risk or less profit, but for sure less costs?
For example, if Morty buys 100 shares of Stock plc (STOCK) at $10 per share, he might hedge his investment by taking out a $5 American put option with a strike price of $8 expiring in one year. This option gives Morty the right to sell 100 shares of STOCK for $8 any time in the next year. If a year later STOCK is trading at $12, Morty will not exercise the option and will be out $5; he's unlikely to fret, however, since his unrealized gain is $200 ($195 including the price of the put). If STOCK is trading at $0, on the other hand, Morty will exercise the option and sell his shares for $8, for a loss of $200 ($205). Without the option, he stood to lose his entire investment
Self discipline It is a practice
  • #98
  • Apr 23, 2017 4:45am Apr 23, 2017 4:45am
Quoting nubcake
{quote} That you don't understand order flow and market mechanics DOES NOT EQUATE TO "It must be nedging". Of all the real reasons why markets move the way they do at certain times, you decide that it's because of this fantastical nedging bs?
I can assure you that there is at least one more platform offering nedging that is not MT4 (Oanda V20, which is what I use on my retail account. So your statement about MT4 being special in that regard is certainly incorrect. IT also doesn't stand to reason that professional are more restricted in their trading than retail. If anything, it is the other way around.
If you want to explain the data, you need to bring down a current hypothesis and provide a better one. Not some incoherent statement about my ignorance of "order flow and market mechanics".
So why is my hypothesis wrong, what hypothesis do you offer that is better and how does it improve?
k
  • #99
  • Apr 23, 2017 4:50am Apr 23, 2017 4:50am
Quoting kprsa
{quote} I can assure you that there is at least one more platform offering nedging that is not MT4 (Oanda V20, which is what I use on my retail account. So your statement about MT4 being special in that regard is certainly incorrect. IT also doesn't stand to reason that professional are more restricted in their trading than retail. If anything, it is the other way around. If you want to explain the data, you need to bring down a current hypothesis and provide a better one. Not some incoherent statement about my ignorance of "order flow...
Oh well gee you got me, so you must be right. Oanda having a similarly shitty platform negates everything.

As for pro's being restricted... FUCK. If you had followed any of this, and every single other thread like it, you'd know there IS NO RESTRICTION. Nedging is a delusion you shackle yourself to. Pro's aren't missing-out.

They would never even entertain such an obscene notion as having buys and sells at the same time on the same pair. Why? BECAUSE OPPOSITE TRADES GET YOU OUT OF A POSITION. That you don't understand this is amazing.

Let's just imagine this for a moment with some fat fuck on a yacht with his ho's and cocaine, calling on his sat-phone to his similarly rich as fuck trader:

Yacht: "Hi, I'd like to buy a yard of EURUSD. Just fill it at market price"

Trader Joe: "Hi Buddy bro bonzai boy-o... sir. Yes, filled and I'll fax the transaction details to your office".

Yacht: "I'd also like to sell a yard of EURUSD. Fill it at market price"

Trader Joe: "You... what? You want to now exit your position?"

Yacht: "No, I want a buy AND a sell of the same size"

Joe: "That's not a thing, sir. You would be closing your buy exposure"

Yacht: "Don't give me that! I've read Forex Factory! I know you can buy and sell at the same time. It's called a wedge, or ledge, or something. Just get it done!"

Trader Joe jumps out the window, forever saved from this bullshit.

I can't... I just can't even. I'm out.
Congratulations ScalaFX for coming out of the closet!
  • #100
  • Apr 23, 2017 4:50am Apr 23, 2017 4:50am
Quoting michisuperfr
{quote} What you do in the picture you can also do 100% the same without any hedging and simple net positions? You will not have more risk or less profit, but for sure less costs?
& if your referring on brokers cost I do get rebate on every trade either positive or negative & with more advance hedging method you win both ways the position and the rebates.
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Self discipline It is a practice
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