Any great idea about HEDGING positions welcome here - page 8

[Seyedmajid Masharian]

Emmanuel Femi Ojo:

Marco, I don't get it...do you mean to say... this place is for non-professionals only? ...for those that belong to the 95% only? ...for loosers only? ...for newbies only? Clearly you are wrong! I have followed your posts and have admired your immense contributions so far, but and I'm very much disappointed with your response. Smells like another case of cyber-bullying here. Knowledge and inspiration is never too late to acquire. Even if you are right, sometimes even the kings seek words of wisdom from commoners in his domain.

You sure know much about genetic algorithm, an evolutionary algorithm, pretty well. Its one of the bedrock of the Metatrader backtest optimization procedure. After selecting an elite candidate pool (+/-2%) of best performing samples from a pre-processed population pool, what happens next in the Mutation part? It creates new chromosomes from blends or combinations of part of the elite pool (+/-98%) with parts of the non-selected pool (+/-2%). Its like saying "Hey... I'm ahead of the curve, but I need to periodically check what's out there, grab some promising stuffs from whats available out there, spice or tweek it up with some of my best performers to create a mutated sample. My mutated sample may as well come out to be the overall best performer. If the mutated sample does not work, I discard and move on." Its also like saying "Hey...I need to move out of my comfort zone, check for promising stuffs out there in case I missed something". And that's exactly what Seyedmajid Masharian is trying to do, in my opinion.

Even, Google, Youtube, etc, as examples, use similar algorithm or framework in serving you contents you searched for. You search for "Metatrader" but of 10 search results, it also serves you 1 "NinjaTrader". Like, "...you searched for this but you may also be interested in that". And guess what, some of the times you end up clicking on an item you didn't originally searched for.

By saying "I do not understand why a professional trader would come here to ask for ideas..." you are undermining the great contributions of, and derogating the names of multitudes of heavy weights of professionals on this platform. 

Please retract your statement and lets move on with Seyedmajid's quest for new ideas.

Thank you so much dear friend

[92120167]

Keith Watford:

There is never a reason to "hedge" trades in the way of just opening opposite orders with the same instrument.

https://www.mql5.com/en/forum/167337

True

[Marco vd Heijden]

Hedging - on multiple instruments - to stay virtually flat.

Sometimes called a synthetic hedge for example between EURUSD and USDCHF.

Or a Pythagorean or triangular hedge, over three instruments, with an equal amount long as short.

But not a long and a short positions on the same instrument. 

Why are you pulling up the most satisfying comments ?

[[Deleted]]

Hedging using triangle hedge is complicated. I have never tried doing it successfully. 

But I have heard of a local company that successfully trade EURUSD and Gold together. One hedges the other, but i do not know which hedges which.

It probably calculates the movement of each and uses some scaling method to determine how much is needed to hedge how much of the other.

That is one idea for you.

[Seyedmajid Masharian]

Marco vd Heijden:

Hedging - on multiple instruments - to stay virtually flat.

Sometimes called a synthetic hedge for example between EURUSD and USDCHF.

Or a Pythagorean or triangular hedge, over three instruments, with an equal amount long as short.

But not a long and a short positions on the same instrument. 

Why are you pulling up the most satisfying comments ?

hedging contains that kinds of trading styles you said above + that kind of i said.

do you know investopedia .

take a glance beneath:

https://www.investopedia.com/ask/answers/forex/forex-hedge-and-currency-hedging-strategy.asp

[Seyedmajid Masharian]

ANY NEW IDEA PLEASE COME IN.

[Funmilola Mabel Odjo]

The proponents and opponents of hedging as a strategy, or part of a strategy all have valid points. More convincing are Fernando's and Keith Watford's argument that hedging is unnecessary and counterproductive. Those names are Heavy Weights (I bow with respect) in the game so better heed to their words of wisdom.

While I do not agree with you (Seyedmajid Masharian) on a number of your positions on the current topic (like not willing to share any of your strategies or ideas but wanting to grab from others...thats not cool at all, that's neither good nor fair really).

Nevertheless, I present here 2 "hedging" strategies or ideas that have so far, with precaution, worked for me, but far from perfect, I must admit (hence will welcome further ideas for improvement of these strategies):

1. Manual Hedge/Recovery Strategy (MHR), and

2. an automated Consecutive Hedge-Unhedge Strategy (or LongPipRuns as named in my resulting EA)

1. MHR: As example: Following one of my trading rules and entry signals from a primary strategy (>95% confluence of fib retracement PLUS several MAs price rejects PLUS S/R levels all on multiple timeframes PLUS a few prince action PLUS round price levels), I go long at say 1.25000 entry level. But price move against me to a predefined virtual stoploss 50 pips below. I simply hedge the trade at that level, and allow the market to proceed until I get another stronger signal (in same direction as previous signal) from the primary strategy. While hedge is on and on new signal and current level is below hedge entry level, I go new long, and close the hedging trade with a profit. The resulting 2 long trades I typically close with a profit or worst case on breakeven, but still leaving me with a profit from the closed hedging trade. I must emphasise that here that the success depends heavily on the primary strategy's signal (the confluences mentioned).

2. The LongPipRuns Strategy: I have attached the EA with 3 years backtest result for GBPUSD, EURUSD and USDJPY, all tested using real tick data (using Tick Data Suit TDS) with 99.9% modelling quality with variable spreads and slippages. The settings are also attached. Results are not bad, but could be better, and proves that hedging can still make profits if used ingenously. The strategy itself is not ideal, I must admit. Yes there will be losses from paying double broker commissions but if my PnL grows to satisfaction at the end of the day, I m just fine with that.

Please note also that the EA code is a working version, from a trove of other semi-abandoned EAs I worked on for a global hedge fund a while ago, hence forgive my disorderliness in the code writeup. Hopefully someone here on the forum would add more ideas, rework and perfect the strategy as well as clean up the code or rewrite a new one professionally. The code is only a "work-in-progress", hence not yet polished, but works just fine.

EA description and procedure:

a. Enter Buy#1/Sell #1 simultaneously. Price may go up or down, we dont know at this point.

b. If price goes up by variable Step (75 pips for example), close Buy #1 and keep its profit in a pseudo-bank. Then enter another set of new Buy #2/Sell #2 simultaneously with a slightly higher lot that Buy #1/Sell #1. Note that we dont close Sell #1 yet. Now we have 3 active trades, Sell #1, Sell #2 and Buy #2. Now our target if for the price to go down.

c. If price reverts down to Buy#1/Sell #1 entry levels, close all trades. Our net profit is the earlier closed Buy #1 in the pseudo-bank.

c. If however, price goes up again by Step, close Buy #2, and send its profit to the pseudo-bank (so we now have Buy #1 and Buy #2 profits in pseudo-bank). Again, we enter a new Buy #3/Sell #3 trades simulatenously, with a slightly higher lot that Buy #2/Sell #2. Now we have active trades Sell #1, Sell #2, Sell #3 and Buy #3.

d. If price reverts down to Buy#2/Sell #2 entry levels, close all trades. Our net profit is the earlier closed Buy #1 and Buy#2 profits in the pseudo-bank, MINUS Sell #1 loss. The result is a good profit given that Sell #1 lot is smaller than Buy #2 lot.

d. etc etc., until there is a retracement to previous entry level or a point where we can close all with overall in profit taking into consideration the amount in pseudo-bank, then repeat again from step a.

See the attached EA files. Tested for GBPUSD, EURUSD and USDJPY. Still need to be optimised for these and other instruments.

Comments and further hedging ideas welcomed.

Again, I agree with the Heavy Weights here that hedging is redundant, and I think potential line of action could be the following:

a. Developed a newer version of this EA that trades with only the real net values of virtual simultaneous Buy/Sell pseudo-positions. 

b. This strategy as-is is very good for ranging markets on higher timeframes M30, H1, H4. Consequently, apply range-bound market filters (ATR, BB contrition, MAs etc) and time filters to trade within those range.

c. The strategy will also work well for trending markets under the condition that the trend makes at least one 20% retracement within a 500pips stretch. Consequently apply 

d. The strategy should work well at low risk settings for any currency pairs, but need to optimise, optimise and optimise to get best performing settings for different pairs.

Hopefully someone out there will contribute by developing this EA further and sharing the results here (or just PM me). Just remember to give relevant credits if EA useful in any way.

GBPUSD 3yr backtest snapshot

USDJPY 3yr backtest snapshot

EURUSD 3yr backtest

[Seyedmajid Masharian]

Funmilola Mabel Odjo:

The proponents and opponents of hedging as a strategy, or part of a strategy all have valid points. More convincing are Fernando's and Keith Watford's argument that hedging is unnecessary and counterproductive. Those names are Heavy Weights (I bow with respect) in the game so better heed to their words of wisdom.

While I do not agree with you (Seyedmajid Masharian) on a number of your positions on the current topic (like not willing to share any of your strategies or ideas but wanting to grab from others...thats not cool at all, that's neither good nor fair really).

Nevertheless, I present here 2 "hedging" strategies or ideas that have so far, with precaution, worked for me, but far from perfect, I must admit (hence will welcome further ideas for improvement of these strategies):

1. Manual Hedge/Recovery Strategy (MHR), and

2. an automated Consecutive Hedge-Unhedge Strategy (or LongPipRuns as named in my resulting EA)

1. MHR: As example: Following one of my trading rules and entry signals from a primary strategy (>95% confluence of fib retracement PLUS several MAs price rejects PLUS S/R levels all on multiple timeframes PLUS a few prince action PLUS round price levels), I go long at say 1.25000 entry level. But price move against me to a predefined virtual stoploss 50 pips below. I simply hedge the trade at that level, and allow the market to proceed until I get another stronger signal (in same direction as previous signal) from the primary strategy. While hedge is on and on new signal and current level is below hedge entry level, I go new long, and close the hedging trade with a profit. The resulting 2 long trades I typically close with a profit or worst case on breakeven, but still leaving me with a profit from the closed hedging trade. I must emphasise that here that the success depends heavily on the primary strategy's signal (the confluences mentioned).

2. The LongPipRuns Strategy: I have attached the EA with 3 years backtest result for GBPUSD, EURUSD and USDJPY, all tested using real tick data (using Tick Data Suit TDS) with 99.9% modelling quality with variable spreads and slippages. The settings are also attached. Results are not bad, but could be better, and proves that hedging can still make profits if used ingenously. The strategy itself is not ideal, I must admit. Yes there will be losses from paying double broker commissions but if my PnL grows to satisfaction at the end of the day, I m just fine with that.

Please note also that the EA code is a working version, from a trove of other semi-abandoned EAs I worked on for a global hedge fund a while ago, hence forgive my disorderliness in the code writeup. Hopefully someone here on the forum would add more ideas, rework and perfect the strategy as well as clean up the code or rewrite a new one professionally. The code is only a "work-in-progress", hence not yet polished, but works just fine.

EA description and procedure:

a. Enter Buy#1/Sell #1 simultaneously. Price may go up or down, we dont know at this point.

b. If price goes up by variable Step (75 pips for example), close Buy #1 and keep its profit in a pseudo-bank. Then enter another set of new Buy #2/Sell #2 simultaneously with a slightly higher lot that Buy #1/Sell #1. Note that we dont close Sell #1 yet. Now we have 3 active trades, Sell #1, Sell #2 and Buy #2. Now our target if for the price to go down.

c. If price reverts down to Buy#1/Sell #1 entry levels, close all trades. Our net profit is the earlier closed Buy #1 in the pseudo-bank.

c. If however, price goes up again by Step, close Buy #2, and send its profit to the pseudo-bank (so we now have Buy #1 and Buy #2 profits in pseudo-bank). Again, we enter a new Buy #3/Sell #3 trades simulatenously, with a slightly higher lot that Buy #2/Sell #2. Now we have active trades Sell #1, Sell #2, Sell #3 and Buy #3.

d. If price reverts down to Buy#2/Sell #2 entry levels, close all trades. Our net profit is the earlier closed Buy #1 and Buy#2 profits in the pseudo-bank, MINUS Sell #1 loss. The result is a good profit given that Sell #1 lot is smaller than Buy #2 lot.

d. etc etc., until there is a retracement to previous entry level or a point where we can close all with overall in profit taking into consideration the amount in pseudo-bank, then repeat again from step a.

See the attached EA files. Tested for GBPUSD, EURUSD and USDJPY. Still need to be optimised for these and other instruments.

Comments and further hedging ideas welcomed.

Again, I agree with the Heavy Weights here that hedging is redundant, and I think potential line of action could be the following:

a. Developed a newer version of this EA that trades with only the real net values of virtual simultaneous Buy/Sell pseudo-positions. 

b. This strategy as-is is very good for ranging markets on higher timeframes M30, H1, H4. Consequently, apply range-bound market filters (ATR, BB contrition, MAs etc) and time filters to trade within those range.

c. The strategy will also work well for trending markets under the condition that the trend makes at least one 20% retracement within a 500pips stretch. Consequently apply 

d. The strategy should work well at low risk settings for any currency pairs, but need to optimise, optimise and optimise to get best performing settings for different pairs.

Hopefully someone out there will contribute by developing this EA further and sharing the results here (or just PM me). Just remember to give relevant credits if EA useful in any way.

GBPUSD 3yr backtest snapshot

USDJPY 3yr backtest snapshot

EURUSD 3yr backtest

Thank you for your great time . 

And thank you for your strategy.

After a while someonesent a professional comment about my subject not to fight with my idea or disturbing. 

I will check your idea and reply you here.

I am willing to share my strategy in details with the professional guys about hedging that agree with the type of hedging i do. Not all members here.

And this thread has been established to find such guys to cobtact them directly to make a team..

This way we can work on it and improve it.

[Eleni Anna Branou]

Seyedmajid Masharian:

THANK YOU FOR YOUR GREAT TIME.

AND THANK YOU FOR YOUR STRATEGY , AFTER A WHILE SOMEONE SENT A PROFESSIONAL COMMENT ABOUT MY SUBJECT NOT TO FIGHT WITH MY IDEA OR DISTURBING..

I WILL CHECK YOUR IDEA REPLY YOU HERE.

I AM WILLING TO SHARE MY STRATEGY WITH THE PROFESSIONAL GUYS ABOUT HEDGING NOT ALL MEMBERS HERE.

AND THIS FORUM HAS ESTABLISHED TO FIND SUCH GUYS TO CONTACT THEM DIRECTLY TO MAKE A TEAM.

THIS WAY WE CAN WORK ON IT AND IMPROVE IT.

Stop SHOUTING (writing in capital letters), its very annoying and rude to others!

[Seyedmajid Masharian]

Funmilola Mabel Odjo:

The proponents and opponents of hedging as a strategy, or part of a strategy all have valid points. More convincing are Fernando's and Keith Watford's argument that hedging is unnecessary and counterproductive. Those names are Heavy Weights (I bow with respect) in the game so better heed to their words of wisdom.

While I do not agree with you (Seyedmajid Masharian) on a number of your positions on the current topic (like not willing to share any of your strategies or ideas but wanting to grab from others...thats not cool at all, that's neither good nor fair really).

Nevertheless, I present here 2 "hedging" strategies or ideas that have so far, with precaution, worked for me, but far from perfect, I must admit (hence will welcome further ideas for improvement of these strategies):

1. Manual Hedge/Recovery Strategy (MHR), and

2. an automated Consecutive Hedge-Unhedge Strategy (or LongPipRuns as named in my resulting EA)

1. MHR: As example: Following one of my trading rules and entry signals from a primary strategy (>95% confluence of fib retracement PLUS several MAs price rejects PLUS S/R levels all on multiple timeframes PLUS a few prince action PLUS round price levels), I go long at say 1.25000 entry level. But price move against me to a predefined virtual stoploss 50 pips below. I simply hedge the trade at that level, and allow the market to proceed until I get another stronger signal (in same direction as previous signal) from the primary strategy. While hedge is on and on new signal and current level is below hedge entry level, I go new long, and close the hedging trade with a profit. The resulting 2 long trades I typically close with a profit or worst case on breakeven, but still leaving me with a profit from the closed hedging trade. I must emphasise that here that the success depends heavily on the primary strategy's signal (the confluences mentioned).

2. The LongPipRuns Strategy: I have attached the EA with 3 years backtest result for GBPUSD, EURUSD and USDJPY, all tested using real tick data (using Tick Data Suit TDS) with 99.9% modelling quality with variable spreads and slippages. The settings are also attached. Results are not bad, but could be better, and proves that hedging can still make profits if used ingenously. The strategy itself is not ideal, I must admit. Yes there will be losses from paying double broker commissions but if my PnL grows to satisfaction at the end of the day, I m just fine with that.

Please note also that the EA code is a working version, from a trove of other semi-abandoned EAs I worked on for a global hedge fund a while ago, hence forgive my disorderliness in the code writeup. Hopefully someone here on the forum would add more ideas, rework and perfect the strategy as well as clean up the code or rewrite a new one professionally. The code is only a "work-in-progress", hence not yet polished, but works just fine.

EA description and procedure:

a. Enter Buy#1/Sell #1 simultaneously. Price may go up or down, we dont know at this point.

b. If price goes up by variable Step (75 pips for example), close Buy #1 and keep its profit in a pseudo-bank. Then enter another set of new Buy #2/Sell #2 simultaneously with a slightly higher lot that Buy #1/Sell #1. Note that we dont close Sell #1 yet. Now we have 3 active trades, Sell #1, Sell #2 and Buy #2. Now our target if for the price to go down.

c. If price reverts down to Buy#1/Sell #1 entry levels, close all trades. Our net profit is the earlier closed Buy #1 in the pseudo-bank.

c. If however, price goes up again by Step, close Buy #2, and send its profit to the pseudo-bank (so we now have Buy #1 and Buy #2 profits in pseudo-bank). Again, we enter a new Buy #3/Sell #3 trades simulatenously, with a slightly higher lot that Buy #2/Sell #2. Now we have active trades Sell #1, Sell #2, Sell #3 and Buy #3.

d. If price reverts down to Buy#2/Sell #2 entry levels, close all trades. Our net profit is the earlier closed Buy #1 and Buy#2 profits in the pseudo-bank, MINUS Sell #1 loss. The result is a good profit given that Sell #1 lot is smaller than Buy #2 lot.

d. etc etc., until there is a retracement to previous entry level or a point where we can close all with overall in profit taking into consideration the amount in pseudo-bank, then repeat again from step a.

See the attached EA files. Tested for GBPUSD, EURUSD and USDJPY. Still need to be optimised for these and other instruments.

Comments and further hedging ideas welcomed.

Again, I agree with the Heavy Weights here that hedging is redundant, and I think potential line of action could be the following:

a. Developed a newer version of this EA that trades with only the real net values of virtual simultaneous Buy/Sell pseudo-positions. 

b. This strategy as-is is very good for ranging markets on higher timeframes M30, H1, H4. Consequently, apply range-bound market filters (ATR, BB contrition, MAs etc) and time filters to trade within those range.

c. The strategy will also work well for trending markets under the condition that the trend makes at least one 20% retracement within a 500pips stretch. Consequently apply 

d. The strategy should work well at low risk settings for any currency pairs, but need to optimise, optimise and optimise to get best performing settings for different pairs.

Hopefully someone out there will contribute by developing this EA further and sharing the results here (or just PM me). Just remember to give relevant credits if EA useful in any way.

GBPUSD 3yr backtest snapshot

USDJPY 3yr backtest snapshot

EURUSD 3yr backtest

it doesn't open any trade with 1st set file?

what is the problem