Why both Currency going on negative
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- #924
- Jun 13, 2017 12:54am Jun 13, 2017 12:54am
You'll need to look for an exposure calculator. I know that Oanda have an exposure tab on their java trading platform.
I'm sure there are basket indicators here that will plot your basket (triangle hedge) equity.
Just remember that to make any profit in the market, you have to have exposure to it.
You can refine your triangle hedge to the point that the amounts that you are exposed to are so small that you won't make any profit.
What you did was pay $1.30 in commission where it would have been $0.04 cents for a 0.01 Long USDCAD trade. The results would be the same.
I hope you can see what's happening here. You won't make any money by having a perfect hedge. You'll only make money by having exposure to the market,
and there are cheaper ways of doing it than opening up 3 trades.
It's a learning curve, and at least it hasn't cost you a lot.
Coder
I'm sure there are basket indicators here that will plot your basket (triangle hedge) equity.
Just remember that to make any profit in the market, you have to have exposure to it.
You can refine your triangle hedge to the point that the amounts that you are exposed to are so small that you won't make any profit.
What you did was pay $1.30 in commission where it would have been $0.04 cents for a 0.01 Long USDCAD trade. The results would be the same.
I hope you can see what's happening here. You won't make any money by having a perfect hedge. You'll only make money by having exposure to the market,
and there are cheaper ways of doing it than opening up 3 trades.
It's a learning curve, and at least it hasn't cost you a lot.
Coder
- #926
- Jun 13, 2017 5:32am Jun 13, 2017 5:32am
I'm just trying to help. Please read what I've written again. Look at the math. Understand what's happening.
Forget thinking about your trade as a hedged triangle and start thinking about it as your exposure to the market. You're exposed long USDCAD at the moment.
Your hedge will not always make profit. It will only make profit if the market that your exposed to moves higher or lower than your entry point, depending if you're exposed long or short. This may take seconds, minutes, hours, days, months or even years. It's no different to normal trading.
Direction and the timing of entry are still the issue. There is no magic in hedging. You're just reducing your exposure and hoping that in the long term that the market will move in your direction. It probably will eventually, but in the mean time the swap will kill your account.
Try some other examples. Learn how to calculate your exposure and then watch the price chart that you're exposed to move up and down. Enjoy your journey. You have enough information above to hopefully push you in another direction. Coder
Forget thinking about your trade as a hedged triangle and start thinking about it as your exposure to the market. You're exposed long USDCAD at the moment.
Your hedge will not always make profit. It will only make profit if the market that your exposed to moves higher or lower than your entry point, depending if you're exposed long or short. This may take seconds, minutes, hours, days, months or even years. It's no different to normal trading.
Direction and the timing of entry are still the issue. There is no magic in hedging. You're just reducing your exposure and hoping that in the long term that the market will move in your direction. It probably will eventually, but in the mean time the swap will kill your account.
Try some other examples. Learn how to calculate your exposure and then watch the price chart that you're exposed to move up and down. Enjoy your journey. You have enough information above to hopefully push you in another direction. Coder
- #937
- Jun 15, 2017 12:33am Jun 15, 2017 12:33am
- Joined Sep 2006 | Status: ... | 8,113 Posts
It's the same thing. You can express it either way. The important bit is your exposure:
........
Your exposure doesn't change though. There is no best price to enter. When you enter your exposure is fixed. The market moves either up or down. You equity either grows or shrinks. Same as normal trading. There is no edge here.
