I have a trading style that i wanted to share with you, Im using a basic system but with no stop losses. instead i hedge my postion so im buy and sell at the same time. This locks the amount in my account so i dont lose money.
It's not as perfect as it sounds, there's still a good amount of risk involved. The way Ive been doing this is very simple. I use a 10day and 25day MA, for signals, on a 4 hr chart.
I when i get a trigger i buy and sell at the same time, you need a brooker that will allow this FXCM, and Interbank and so on. So no matter where you end up in the market your locked in. Then of course i wait for a another triger of the oppsite direction before i let a contract go.
Let go over a trade.
I get a signal open two contracts buy and sell. Wait for a signal of the opposite dirrection, drop winning contract pickup another buy and sell.
know you have two contracts going that dirrection. so if the first trade was a buy, and it make 300 pips, and on your sell -300 pips. You make your profit when the market comes around. You must consider pair you are using GBP/USD works for me because it trends both directions. this is a slow method, and if your a rookie at trading you may get scared when you see negative postions, there's months that ive made 1000+ pips, an other months where i had to wait it out before i can get paid. if you really want to see what im doing put on your char 10 ma and 25 ma, on the 4 hr, everytime it crosses imagine a sell and a buy. release one contract when you get an opposite signal. and pickup another buy and sell.
Your hedging system seems to be very risky, because if we see the chart for g/j the past weeks, it was almost a stright up move... So what will be happening to the sell positions? And what do you really mean by releasing the trade? Do u mean closing both previous position on the new signal or just close the winning position on the new signal and let the losing one open.
If thats the case, then I guess at the end of some weeks, you can end up with multiple losing positions summing to tons of pips! I will wait for your input
Your trading strategy is suicide. This only works if you have very large amount in your margin. You say that you will wait for the reversal of the trend to make the other position profitable, What happens when you closed your gaining position and the trend continues against your losing one? What would you do if that happens?
This Strategy is a very slow one, It's not a quick breakout strategy or a something you need to check everyday. Even when using the 4 hr chart is really the way i zoom in on daily chart. If you understand what i mean. So thats why i stick with the 4 hr for signals and i look at daily for more of a wider view to filter out any bad signals.
So the trade that everyone is refering to is the bullish trend on the GBP/USD the price pattern bouncing off of the lower BB on the daily chart. The band may expand showing a little of a breakout and break the High that is in April.
Thats great for us in this strategy!!!!
Im locked in with Sell that is -378 pips and a 2 buy that is + 756 pips
it changes every few secounds but im locked in, my account is hedge. when i get my clear sell on the 4 hr check the daily make sure it's a true signal and let my buy contracts go. Note that i had one of this buy contracts for almost 2 months
On the way down i will shop for a buy and pickup one more sell and of course hold on to my other sell. I hope this clears it up.
So i guess in a week or so, i may get a signal for a sell or may have to wait a while.
For the trader that asked what would i do if, my method of trading went againts me, that has never really happend to the point i start to panic. it has gone asgaint me 150 to 200 pips, but always came back. if it keep on going againts me i would hedge my negative postion. so it would not pull to much profit from me. and wait for another signal.
If this method really works for you please attach a detailed statement of your previous trades. How long have you tried this system?
Your method is definitely a low and Hyper risky system. I have seen many times on the charts that when the trend takes over, price very rarely turns back. I cant understand how you max loss can only be 200 pips. And of the H4 ...
There is something we are missing here
I have tried using the Triggerline, HMA and Brain-1 indicators on a daily chart. There will always be slight overlaps around trend changes, but once a trend is caught, it's boom town Charlie. The "risky" part is in the starting leg. If the new trend turns out to be a small one, there will be a small loss (plus negative swaps in a SELL situation) at the next trend change. Make sure to have sufficient capital to withstand this probability before the system latches on to a longer trend. The worst scenario is a choppy price movement, which is more likely to occur in a H1 or H4 chart. A good alternative is to hedge 2 pairs instead of trading a single currency. You can end up receiving positive swaps even in times of adversity. But of course the downside is the need for extra margin. Still, the swaps are a lot better than the interest rates you can ever get from the mafia (banks).
Maybe I am missing something here but apart from paying for 2 spreads instead of one what is the difference between this and just waiting for the same signals and entering in one direction at that point?
Well, I've never understood the advantages of locking technique. Moreover, there're some brokers that don't support such kind of trading that's why good old stop-loss is my choice.