Best Strategies for Hedging (for EA)

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Hello

I have developed a good EA but would like to add another function - hedging. I'm wondering what the best strategies may be for this? I'm thinking that it might be possible to add the hedge function as a kind of floating stop-loss so if the market moves against the trade by a certain number of pips, the EA opens an order (could be a multiplier of initial trade size).

But this sounds too simple!

I'd be grateful for some advice.

 
I can only advise each entry is of best condition and managed individually
 

It IS as simple as it sounds (under the assumption that your account uses hedging mode and not netting mode).

But maybe this is an occasion to ask what I never understood: why on earth would you want to do that? Can you explain the reasoning behind hedging the same instrument/currency pair as a retail trader? I partly understand that people might consider e.g. buying a stock and hedge the underlying index for canceling out influence of the general market. Or some benefits might exist with options trading. Beyond such special scenarios: what's the benefit? Certainly, your broker will love you for paying twice for spread/commissions. Maybe you see the hedge as kind of an insurance - you lock in a price and don't have to worry if the market move further against you. I get it. But if you simply get out of the position, you don't need to worry, either. Why hold onto that trade if it doesn't do what it's supposed to? The question is: at what point later on do you close the hedge? If you close it below your "floating stop loss", you have made use of the insurance thought, at the cost of double spread/commissions, if you compare to a normal stop loss where you just get out. If you close the hedge exactly where you opened it, then why open it at all (I assume that this point is also the price where you normally would have placed a stop)? If on the other hand you close the hedged position above its opening, you give away parts of your potential profit.

 

The reason is greed, really, tbh. I have a lovely EA but it isn't perfect, of course, and although it has a 90%+ win rate, it can suffer drawdowns of 25% or so that you can either get out of or hold (for some considerable time). I just want to explore a simple way of possibly profiting from the drawdown and maybe trying to maximise an additional financial return from this. Perhaps this isn't strictly a hedge...

Of course, broker will be happy with additional commission/spread.

Thanks for your thoughts - I totally get what you're saying and I've neveer really thought about doing this, for some of the reasons you say.

 

I've tried your method of hedge when trade turn against you. But as soon as hedge kicked in, it went in favour of the 1st trade.

So your hedge got stuck and DD going to be huge again.

 

Yes, thank you. It may be far simpler to just not do it. I've been looking at using a trail step/stop (which the EA works on anyway, very effectively). With my TP, I've been looking at using a hedge should the trade turn in the wrong direction after 20 pips.

But, I'm really not sure.

 
How do we get to use the auto bot? 
 
Berridge94:
How do we get to use the auto bot? 

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Use tips - the instruction about HowTo

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Algorithmic Trading, Trading Robots - MetaTrader 5 Help
Algorithmic Trading, Trading Robots - MetaTrader 5 Help
  • www.metatrader5.com
Algorithmic or automated trading is making buy and sell operations in the financial markets using special trading robots. In the trading platform, these programs are also called Expert Advisors or EAs. Trading robots are widely used in financial trading, and the share of automated operations relative to manual trading is constantly...
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