Keep in mind that most investors never hedge in their entire trading careers. Short-term fluctuation is something that the majority of investors do not worry with. Therefore, hedging can be pointless. Even if you choose not to hedge however, learning about the technique is a great way to understand the market a bit more. You will see large corporations and other large traders use this and may be confused at why they are acting this way. When you know more about hedging you can fully understand their strategies.
Trading forex with hedging
- Thread starter Rambo35
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Are you serious? I have already done the math here. OK, I will repeat it for you one more time. Since you won't get equal -1/+1 swap on buy/sell trades with any broker, the situation will be more close to something like this:
eu buy 0.01 -1.1 swap
eu sell 0.03 +3 swap
profit daily: +1.9 swap
Without hedge:
eu sell 0.02 +2 swap
+2 swap > +1.9 swap - that's how you eliminate potential swap gain (+0.1) with your hedge.
You don't need a gap at all to fail with a position without stop-loss. You just have to sell bottom or buy tops.
That depends on how you define a failure. Risking unlimited loss of 20c per pip for some unclear limited gain of 20c per pip in a distant future looks like a failure to me.
Because if they correlate, that's not diversification.
How does it reduce the risk to fail when the swing is over? Reduces compared to what?
a student of mine is trading hedges and so on since 2004, now he has started several new coded versions for demonstration!!!, take a look pls.
normally i do no suggest others or systems, but sorry you are so wrong.
do you have knowledge about Brownian motion, probability theory, stochatic processes? financial mathematics?
bro, your stubbornness leaves me no choice
, here can you find the evidence
http://www.myfxbook.com/members/IXBONE/ixbone-master-professional-dominoswapfactorrangehedge/1267650
http://www.myfxbook.com/members/IXBONE/ixbone-master-professional-dominostaticorderhedge-050/1267646
and 40 other pa, hedge, martingal, brownian, aritmetic versions, not all demonstrations will survive, but its a good starting point to see what is possible. fresh new coded versions, for demonstration only!! so lets see what's upcoming.
this guy is using all feature like pure price action, hedging, (sub)martingal (no "e", plural (sub)martingales), Brownian, arithmetic calculations and so on
if you interpret this suggestion as advertising, pls delete it! i'm far away doing others marketing job!
peace
normally i do no suggest others or systems, but sorry you are so wrong.
do you have knowledge about Brownian motion, probability theory, stochatic processes? financial mathematics?
bro, your stubbornness leaves me no choice
, here can you find the evidencehttp://www.myfxbook.com/members/IXBONE/ixbone-master-professional-dominoswapfactorrangehedge/1267650
http://www.myfxbook.com/members/IXBONE/ixbone-master-professional-dominostaticorderhedge-050/1267646
and 40 other pa, hedge, martingal, brownian, aritmetic versions, not all demonstrations will survive, but its a good starting point to see what is possible. fresh new coded versions, for demonstration only!! so lets see what's upcoming.
this guy is using all feature like pure price action, hedging, (sub)martingal (no "e", plural (sub)martingales), Brownian, arithmetic calculations and so on
if you interpret this suggestion as advertising, pls delete it! i'm far away doing others marketing job!
peace
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I do. Those concepts have little to do with what we discussed before. Actually, they do, but the fact that async hedge is a fluff can be proven without resorting to anything higher than school math.
bro, your stubbornness leaves me no choice
http://www.myfxbook.com/members/IXBONE/ixbone-master-professional-dominoswapfactorrangehedge/1267650
http://www.myfxbook.com/members/IXBONE/ixbone-master-professional-dominostaticorderhedge-050/1267646
That cannot serve as evidence of anything due to the survivorship bias.
what kind of evidence do you accept?
everything i said point you as bad, useless or wrong - without any provable statement from your side!
no one of these themes, hedges, martingal or similar can discussed in an open minded way.
never seen so many static brain blocks in my 20 year forex career, sorry bro, i'm out of this thread.
peace
everything i said point you as bad, useless or wrong - without any provable statement from your side!
no one of these themes, hedges, martingal or similar can discussed in an open minded way.
never seen so many static brain blocks in my 20 year forex career, sorry bro, i'm out of this thread.
peace
The first step to implementing the hedging strategy relies on watching the market during the first hour of either the US or UK open. It is during this time that market activity is at its peak and this period often sets the tone for the rest of the day.
LOL agreed and spot on, which is rarely used when it comes to market analysis, but as far as this one goes, right on the mark..
Well to me, hedging is simply a strategy to protect yourself against big loss.A trickish and surest definite way of getting insurance on your trade and also a way to reduce the amount of loss you would incur,One of the best strategy I know of so far,It is easy to make profits/maximize using this system as long as you have a sound technical analysis
Let me put it this way: say you did the research and are betting it all on the eur usd and decide to go long with ten lots; you can hedge this accordingly, by setting up a few reverse orders, as and when the strategy and analysis indicates .. and as for trades that went wrong, in one word, swiss franc..
That's correct..esentially you would need to open up a few reverse orders to hedge and make sure your account has the required depth to absorb the risk on opening up the hedge positions..
Hedging can be useful in very specific situations, but most traders don't use it correctly. Hedging a position that is in a loss is just like closing the position.
It is usually better to get out of the trade and look for the right timing to get in back. Most of the times traders use hedging just because that can't accept the loss.
It is usually better to get out of the trade and look for the right timing to get in back. Most of the times traders use hedging just because that can't accept the loss.
Sorry but I am with enivid on this one, I do hedge but more of an async hedge but not one for ten pairs definitely. Tht would be any traders version of hell; For newbies, not brand new ones but those who have been on the market say for the last few months, a counter trade can get you started with hedging..but again, newbies in general should avoid hedging until they can work which end of the can opens up..
The problem is that newbies don't really understand how to use hedging effectively, that's why they simply shouldn't do it, at least to that point when they fully understand it.
LOL, true 'dat..sad but true, the fact that hedging is more looked on as a way to get more pips in or as a way to maximize your profits..rather than as a way to minimize the risk..I guess each explanation is a valid one to an extent but what the newbies do not get, is that when you hedge, unless and until you know what you're doing, you're going to end up with a massive loss
With the trades that i did on Hedging i made losses as the timing in which we have to get out of them is extremely difficult so the best thing that i came to know is that it is not for me
Probably your hedging strategy was incorrect, actually any position in opposite instrument can be considered as hedging but in practice its much more difficult you should learn history of the instrument to understand if it suits you as a hedging instrument or not.
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