Hedging - A smart way to trade or completely stupid?
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Thread: Hedging - A smart way to trade or completely stupid?

  1. #1
    Hello men,

    So I came across the word hedging and browse through a few threads on different forums. In my perception, payoff is some kind of martingaling where to result is high to be break even or in profit.

    By way of example, input a trade (let us say 0.05) and instead of a stop loss, you include a halt (or buy) order that doubles the amount in lot dimensions of your first place. Once the trade goes like 30 pips (or depending upon your egy) contrary to you, it triggers the second place (0.1). If the 2nd place proceeds in profit and you achieve break-even in total profit, you shut the initial place and let this one run.

    Repeat until the trade goes in one way.

    My initial though was : damn, that is actually intelligent! Worst and case you end up in a reduction in case you grab the range and maintain entering transactions and can't add positions. Finest instance a break even or a profit.

    But everything that seems amazing and easy, usually has a hook. And I cannot seem to work this out hook except you've got to keep adding positions ever since your trade jumps between the range of 30 pips and you have a reduction.

    Since I'm new to hedging and recently discovered it, what is your view in this way of trading? Is there a drawback to this? I do not know ....

    Cheers,
    Ray

  2. #2
    Quote Originally Posted by ;
    Hi guys, I came across the word hedging and read through some threads on different forums. In my understanding, hedging is some type of martingaling in which to result is very large to be break in or even profit. For example, enter a commerce (let us say 0.05) and rather than a stop loss, you add a stop (or buy) order that doubles the sum in lot size of your first place. Once the trade travels like 30 pips (or based upon your egy) contrary to you, it triggers the next place (0.1). In the event the 2nd place goes in profit and you reach break-even...
    It is truly smart. On it's face.

    In reality you'll get a lot of small wins while the market ranges, but sooner or later, the market will be begin a tendency which can drain the account. It is a textbook case of letting losers, run, and cutting on winners short. It is possible, but it will be your end, if you create any trading mistakes in any way.

  3. #3
    Quote Originally Posted by ;
    quote It is actually smart. On it's face. In reality you'll get a lot of small wins while the market ranges, but the market will be begin a trend that will drain the account. It's a textbook case of cutting winners and allowing winners. It's doable, but if you create any trading mistakes at all, it will be the end of you.
    Don't forget that hedging is only used if the trade goes against you. However, depending on the egy (let's assume it's a 70% win rate egy), you do not have to hedge each time you enter a transaction. Only 30% of this time are winners. So perhaps it makes it good?

    Opinions? I'm counter argumenting not since I enjoy hedging (I'm neutral on this) however just to tickle out as much opinions as possible to get a clear image if it's a smart move or not.

  4. #4
    Quote Originally Posted by ;
    quote Do not forget that hedging is only used if the trade moves against you. However, depending upon the egy (let us assume it's a 70% win rate egy), you don't need to hedge each time you enter a trade. Only 30% of this time are winners. So it makes it great now? Opinions? I am counter argumenting not because I like hedging (I am neutral on this) however just to tickle out as much comments as possible to find a clear image if it's a wise move or not.
    This argument is as old as the hills. Look for Hanover, along with his articles.

  5. #5
    Quote Originally Posted by ;
    Hi guys, I came across the term hedging and browse through a few threads on various forums. In my understanding, hedging is some type of martingaling in which to outcome is very large to be break in or even profit. For example, input a commerce (let's say 0.05) and instead of a stop loss, you add a halt (or buy) order that doubles the amount in lot size of your very first position. When the trade goes like 30 pips (or based on your egy) against you, it triggers the second position (0.1). If the 2nd position goes in profit and you reach break-even...
    Hedging is not my style.

    But I understand a trader, she have a youtube webpage (she?s a commercial ).
    She trades in real-time hedging.
    I do not know any trader/eduor that trade in real time except her and show us the trades at no cost.

    But like I said hedging it is not my style.
    But occasionally I like watching her making several trades while I await my setups.

  6. #6
    Quote Originally Posted by ;
    Hi guys, So I came across the term hedging and read through some threads on different forums. Payoff is some sort of martingaling in which to result is high to be break even or in profit. For example, input a commerce (let's say 0.05) and instead of a stop loss, you add a stop (or buy) order which doubles the amount in lot size of your very first position. Once the trade travels like 30 pips (or depending on your egy) against you, it activates the second position (0.1). In the event the 2nd position goes in profit and you reach break-even...
    Hedging is hedging trading is trading. They are different entity
    I hedge becos I am a manufacturer and that I hedge against those nation currency I exported into and those raw stuff I got from another country to make sure my profit margins won't be adversely affected from the Forex changes. I trade spot Forex if I see short term upward and down PA.. I invest in currencies against currencies in a longer time horizon once the nation economical conditions of the currency began to pick up. Martingale is when I go to a casino for some fun once I have a solid runs in my Baccarat games, and that I double my bets down.
    All are different asset classes by itself. You cannot stated which one is a much better.
    If you hedge against some of the aboves means you surrender at least a certain percentage of the reduction to protect against a much bigger reduction.
    Anybody have some different or even more innovative ideas where I can learn from?

    Cheers
    GS

  7. #7
    Quote Originally Posted by ;
    quote Hedging is not my style. However, I understand a trader, she have a youtube page (she?s a commercial). She trades in real time hedging. I don't know any trader/eduor that transaction in real time anyhow her and reveal the transactions for free. However, like I said hedging it is not my style. But sometimes I like watching while I await my installments, some transactions being made by her.
    Could you talk about the YouTube channel ? Thx

  8. #8
    Quote Originally Posted by ;
    quote Could you share the YouTube station ? Thx
    Telac, sorry but it seems that she?s no longer offers the free access, today she charges.
    I dont have free acess now.

    So, I will not market her giving the hyperlink.
    But she?s in the industrial department.

  9. #9
    Quote Originally Posted by ;
    quote Telac, sorry but it appears that she?s no longer gives the completely free access, now she charges. I dont have free acess . So, I won't promote the link being given by her. But she?s in the industrial section.
    I find, will you please inbox me with the particulars? I am interested.

  10. #10
    The term payoff is now ambiguous in the world of FX.

    The conventional sense of this word is lost through the years.

    Your thread would get responses from people of two camps, with rather opposing views.

    Much like there are several ways to skin a , there are numerous ways to earn in the FX market.

    Simply because something works for you does not mean it will for others, vice versa.

    My personal opinion on this (backed with live evidence of concepts) is that both ways would allow you to generate profits, it really just depends on your view of the markets.

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