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Hedge saved you, who will save Hedge ?

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Icham Aidibe
11348
Icham Aidibe  

Hi,

I was "playing" with hedging to explore possibilities : it's very tempting, since it allows purely & simply to recover from a bad position taken. 

The risk of these strategies is well-known : lot management. Comes ALWAYS a point, where the margin is stressed, the logical solution being to accept & cut losses, often with bigger losses than normal if you retried many times.

Is there any way to get out of a failed hedge ?   Have you ever seen such a method that could limit damages made by a failed hedged deal ? Overbidding ad vitam aeternam is definitively not the solution.

SanjayBalraj
38
SanjayBalraj  
Icham Aidibe:

Hi,

I was "playing" with hedging to explore possibilities : it's very tempting, since it allows purely & simply to recover from a bad position taken. 

The risk of these strategies is well-known : lot management. Comes ALWAYS a point, where the margin is stressed, the logical solution being to accept & cut losses, often with bigger losses than normal if you retried many times.

Is there any way to get out of a failed hedge ?   Have you ever seen such a method that could limit damages made by a failed hedged deal ? Overbidding ad vitam aeternam is definitively not the solution.

CloseBy

Icham Aidibe
11348
Icham Aidibe  
SanjayBalraj:

CloseBy

How that ? I mean ... could you develop your idea please ? 

Chris Mukengeshayi
1096
Chris Mukengeshayi  
Icham Aidibe:

Hi,

I was "playing" with hedging to explore possibilities : it's very tempting, since it allows purely & simply to recover from a bad position taken. 

The risk of these strategies is well-known : lot management. Comes ALWAYS a point, where the margin is stressed, the logical solution being to accept & cut losses, often with bigger losses than normal if you retried many times.

Is there any way to get out of a failed hedge ?   Have you ever seen such a method that could limit damages made by a failed hedged deal ? Overbidding ad vitam aeternam is definitively not the solution.

Quality of a good trader:

- The supreme art of trading is to subdue the market without fighting.

- Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

- Victorious traders study/learn the market first and then go trades, while defeated traders open trades first and then seek to win.

One should learn first the market before opening a trade, it simple and it will help you avoiding hedging position.

Icham Aidibe
11348
Icham Aidibe  
Chris Mukengeshayi:

Quality of a good trader:

- The supreme art of trading is to subdue the market without fighting.

- Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

- Victorious traders study/learn the market first and then go trades, while defeated traders open trades first and then seek to win.

One should learn first the market before opening a trade, it simple and it will help you avoiding hedging position.

No kidding! My question isn't about how to open a trade, or what's the best shampoo for traders.

Hedging is very popular across traders and very tempting since it can recover losing trades. There's no ultimate guide for hedging, and one can find some fun perfectionning his hedge method.

That's my case : on the graph I posted above, all positions have been opened - trust or no - perfectly randomly, with no signals - cause it should work in all circumstance - if you can see a clean curve, with some fails there or there, it's because I'm perfectionning it, a strategy, based mainly on hedge. 

Can you help Chris ? 

SanjayBalraj
38
SanjayBalraj  
Icham Aidibe:

No kidding! My question isn't about how to open a trade, or what's the best shampoo for traders.

Hedging is very popular across traders and very tempting since it can recover losing trades. There's no ultimate guide for hedging, and one can find some fun perfectionning his hedge method.

That's my case : on the graph I posted above, all positions have been opened - trust or no - perfectly randomly, with no signals - cause it should work in all circumstance - if you can see a clean curve, with some fails there or there, it's because I'm perfectionning it, a strategy, based mainly on hedge. 

Can you help Chris ? 

A hedge will only "recover" losing trades in the regard that it will preserve the original position's leverage (position leverage boost) despite a diminishing account equity. This leverage boost also greatly increases the risk of a margin-call/stop-out. Sometimes it's best to close the hedge instead of freezing the position and accumulating swap. The only way you should close a hedge is by using CloseBy either manually or programmatically.  

Icham Aidibe
11348
Icham Aidibe  
SanjayBalraj:

A hedge will only "recover" losing trades in the regard that it will preserve the original position's leverage (position leverage boost) despite a diminishing account equity. This leverage boost also greatly increases the risk of a margin-call/stop-out. Sometimes it's best to close the hedge instead of freezing the position and accumulating swap. The only way you should close a hedge is by using CloseBy either manually or programmatically.  

Isn't closeby conservative ? Buy 0.01 / Sell 0.03 ---> 0.02 short remaining, right ? 

Enrique Dangeroux
345
Enrique Dangeroux  

Do you hedge on the same pair?

Ps, tried to send you a private message, but can''t because not on friend list.

Icham Aidibe
11348
Icham Aidibe  
Enrique Dangeroux:

Do you hedge on the same pair?

Ps, tried to send you a private message, but can''t because not on friend list.

Yeah, I disabled private messaging ;-) - but that's ok as far as it's related to the topic.

It's the same pair, yes. I know it's possible to do it with exchange rate, but actually it isn't my goal.

Enrique Dangeroux
345
Enrique Dangeroux  
Hedge on same pair does not make any sense.  In fact it is not a hedge in the true sense of hedge.
Icham Aidibe
11348
Icham Aidibe  
Enrique Dangeroux:
Hedge on same pair does not make any sense.  In fact it is not a hedge in the true sense of hedge.

Obviously.