Any great idea about HEDGING positions welcome here - page 5

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Zee Zhou Ma
1573
Zee Zhou Ma  
Seyedmajid Masharian:
Can you give your strategy here. 

Hedge should be further away below your stop loss. When the market does hit you hard, it is really hard, and will go way past your hedge, and change loss into profit.'

If you place your hedge too close to your stop loss, the price might trigger your hedge and go back the original direction of your trade.

The distance of the hedge is purely discretionary.

As hedge is seldom triggered by the market for it is a rare event, it is hard to back test it to tell you exactly how the strategy should be in mathematically form or algorithmic wise.

Keith Watford
Moderator
14479
Keith Watford  
Seyedmajid Masharian:
I previously read that thread. But i dont beleve on it. 

You couldn't have read it because I didn't just put forward a theory, I proved that there is no reason to "hedge" as it can be replaced by closing the first trade ( saving costs)

Fernando Carreiro
4746
Fernando Carreiro  
Seyedmajid Masharian: Hedging on one instrument is math but on different instruments are fundamental based.

Make up your mind! Are you hedging on the same instrument or on different ones?

As far as you have stated, you want to "hedge" on the same instrument and have even called it "true hedging", and for that the math is quite clear and any true professional trader already knows that.

So, PLEASE, stop arguing the matter a go do some research on the math. It will save you from loosing any more money!

Zee Zhou Ma
1573
Zee Zhou Ma  
Seyedmajid Masharian:
You have to automated it . Manual hedging does not work because you can not seat in front of monitor . 24×5

It is a heated debate here. Lolx, I have to go.

Message me if you have further questions. Thanks.

Enrique Dangeroux
438
Enrique Dangeroux  
Zee Zhou Ma:

Hedge should be further away below your stop loss. When the market does hit you hard, it is really hard, and will go way past your hedge, and change loss into profit.'

If you place your hedge too close to your stop loss, the price might trigger your hedge and go back the original direction of your trade.

The distance of the hedge is purely discretionary.

As hedge is seldom triggered by the market for it is a rare event, it is hard to back test it to tell you exactly how the strategy should be in mathematically form or algorithmic wise.

Nothing is hard to back test. Unless of course you have *flexible* rules. Provide the logic, and it can be done.

nicholi shen
2160
nicholi shen  
Keith Watford:

Obviously, I disagree with you. As yet, nobody has proved to me that I am wrong, but I have proved that "hedging" does not work better than simply closing a trade because it increases costs."

"Hedging" only increases trading costs when you don't use CloseBy either manually or programmatically. Hedging is actually the smartest way to manage net positions. For example, let's say you scaled into a net short-position of 10 lots with 10 separate orders. You could completely reverse that net-position with only one single order. How? You would send a buy order for 20 lots. Your net position is now 10 lots long.  From your terminal you use multiple closeby and the 10 lots that were net-hedged will be reconciled on the broker server as having been closed. There are no extra trading costs whatsoever and it only took you two clicks to make it happen instead of eleven. 

Fernando Carreiro
4746
Fernando Carreiro  
Zee Zhou Ma:

Hedge should be further away below your stop loss. When the market does hit you hard, it is really hard, and will go way past your hedge, and change loss into profit.'

If you place your hedge too close to your stop loss, the price might trigger your hedge and go back the original direction of your trade.

The distance of the hedge is purely discretionary.

As hedge is seldom triggered by the market for it is a rare event, it is hard to back test it to tell you exactly how the strategy should be in mathematically form or algorithmic wise.

That is not "hedging"! It is just a reverse order and that type of usage is a well know method called "SAR (Stop and Reverse)".

There is no hedging involved. Please call things by their correct names so as not to create confusion.

Seyedmajid Masharian
1663
Seyedmajid Masharian  
Zee Zhou Ma:

It is a heated debate here. Lolx, I have to go.

Message me if you have further questions. Thanks.

Just send your hedging strategy if you can. Good luck
Zee Zhou Ma
1573
Zee Zhou Ma  
Enrique Dangeroux:

Nothing is hard to back test. Unless of course you have *flexible* rules. Provide the logic, and it can be done.

Lolx you got me there. Yes it can be back tested. Will see how later.
Enrique Dangeroux
438
Enrique Dangeroux  
nicholi shen:

"Hedging" only increases trading costs when you don't use CloseBy either manually or programmatically. Hedging is actually the smartest way to manage net positions. For example, let's say you scaled into a net short-position of 10 lots with 10 separate orders. You could completely reverse that net-position with only one single order. How? You would send a buy order for 20 lots. Your net position is now 10 lots long.  From your terminal you use multiple closeby and the 10 lots that were net-hedged will be reconciled on the broker server as having been closed. There are no extra trading costs whatsoever and it only took you two clicks to make it happen instead of eleven. 

I havent tested this on netting account, but would not use closeby but just open larger order on reverse would net same results?

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