hedge forex positions with no loss
Membre depuis Feb 22, 2011
posts 4862
Oct 09, 2016 at 14:12
bestdarngood posted:@5astelija5astelija posted:bestdarngood posted:
Then with GBPUSD, you would be Selling 100,000 Units of GBP and Buying 100,000 units of USD.
No, you dont get the same amount of different currencies. If eurusd rate is 2, you get 2 usd 'units' for every 1 euro 'unit' ='€'.
I wonder how you can make any strategy with such knowledge of the system.
No, the value of the units doesn't matter, it is the number of units that matters.... You are still looking at it wrong. NUMBER OF UNITS and VALUE OF UNITS will not be equal. I agree with you on that. But the NUMBER OF UNITS matters for a hedging system more than the value of the units. If the prices all became 1:1:1, then both would equal out, but that is unlikely. But for having a safe hedge, you want to have an EQUAL NUMBER OF UNITS. Otherwise which ever currency that you have more UNITS of will be the commanding currency not the one that has the most value. What you fail to see is that 3 pairs of a hedge basket don't move equally in PIPs. For instance, for AUDUSD, EURUSD, and EURAUD, the EURAUD pair generally moves more PIPs than the other 2 pairs in the same time period.
What you are saying isn't necessarily wrong, but their are other factors that you haven't completely considered and don't see unless you actually map out prices. You can't just take one closing price, but you need to take multiple price points and see how each pair moves relative to the others over different time periods and you can see what I mean.
I believe you are wasting your time explaining this matter to @bestdarngood
Oct 09, 2016 at 16:52
bestdarngood posted:Correct, but that doesn't mean you get more profit - the pips are just 'cheaper' in euraud. Currencies are relative, so you cant compare them with pips, use percents.
For instance, for AUDUSD, EURUSD, and EURAUD, the EURAUD pair generally moves more PIPs than the other 2 pairs in the same time period.
A 10% move in audusd would require x pips, while the same 10% move requires 2x pips in euraud - because the euraud price is roughly twice the audusd's.
= I still disagree with you, and I think you overcomplicate things to see something thats not actually there.
But I'll stop this nonsense now as @togr suggested :D
Membre depuis Sep 25, 2016
posts 8
Oct 10, 2016 at 06:26
avoid trade in more pair,it will blow your account and you can't concentrate.
Membre depuis Nov 12, 2010
posts 178
Oct 11, 2016 at 07:34
exnessdubai posted:
avoid trade in more pair,it will blow your account and you can't concentrate.
You don't understand basket hedge trading, it actually is much safer than trading just trading one pair...
See my profile or message me for my latest EA
Membre depuis Sep 25, 2016
posts 8
Oct 13, 2016 at 11:29
forex is risk,but you can make 200% with my simple stratgy.why are you hedging with lot of position?? and complicated trade?
Membre depuis Sep 15, 2016
posts 24
Oct 13, 2016 at 11:41
It is possible to create a hedge positions in different currency pairs but one has to match the notional amount of the buy side position with the sell side position. However, sometime hedging could be risky also when spread widens due to market volatility. Take the example of recent GBP flash crash, the spread widened a lot and I have seen many of fellows’ account getting burned due to that.
Oct 13, 2016 at 11:45
ilqarsadiqov200 posted:
Hello. Please excuse me for my newbie question. I want to hedge my forex positions (i.e buy or sell ) with other financial instruments with no loss to my capital. Is it possible anyway ? How i can do this if this possible ? Thanks.
If you want to hedge your position in currencies. One way to hedge is Triangular arbitrage in currencies only. But that would be like sailing in the same boat. So it would be better if you hedge your position by investing in Stocks and Indices to protect yourself.
Membre depuis Sep 25, 2016
posts 8
Oct 14, 2016 at 06:28
hello,
it is not advisable in forex because you will not be safe in hedge positions during news time.you can do in stock with options hedge/future .in Indian market it is possible,but investment /return ratio is very bad,so i think you can find out some other stratagy.
it is not advisable in forex because you will not be safe in hedge positions during news time.you can do in stock with options hedge/future .in Indian market it is possible,but investment /return ratio is very bad,so i think you can find out some other stratagy.
Membre depuis Nov 12, 2010
posts 178
Oct 14, 2016 at 09:30
exnessdubai posted:
hello,
it is not advisable in forex because you will not be safe in hedge positions during news time.you can do in stock with options hedge/future .in Indian market it is possible,but investment /return ratio is very bad,so i think you can find out some other stratagy.
You will be a lot safer in a hedge formation than in a normal 1 pair trade of the same pair that has a huge spread in Forex...
With hedging, it is true that you make small profits, but the upside is lower risk in the market.
See my profile or message me for my latest EA
Membre depuis Feb 22, 2011
posts 4862
Oct 14, 2016 at 10:21
exnessdubai posted:@exnessdubai
hello,
it is not advisable in forex because you will not be safe in hedge positions during news time.you can do in stock with options hedge/future .in Indian market it is possible,but investment /return ratio is very bad,so i think you can find out some other stratagy.
Hedge is great tool to protect your account. Especially during news when you can close both sides of position with profit
Membre depuis Feb 22, 2011
posts 4862
Oct 24, 2016 at 09:03
(édité Oct 24, 2016 at 09:13)
CrazyTrader posted:bestdarngood posted:
True that it cost you different amounts of USD for each of the 3 pairs, but it is all relative. Hard to convince someone until they try it out... If you don't trade equal lots, you will see that the pair that you have the biggest trade in will Overwhelm the other pairs.
You also need to take in account that all 3 pairs will not move the same number of pips over the same period. In the case of AUDUSD, EURUSD, and EURAUD, you will find that EURAUD generally will move MANY more pips than the other pairs.
It's called Relative Force.
A goes into 1 direction of 10 pips
B goes into the opposite direction of 10 pips
=> so AB distance is twice.
EurAud is so twice volatile.
Triangle hegde works only for
EurUsd - GbpUSd - EurGbp
AudUsd - NzdUsd - AudNzd
Eur Usd Jpy... doesn't work as sometimes both safe even currency Usd & Jpy can be totaly uncorrelated
About EurUsd & GbpUsd & EurGbp... Edge story. Pro hedger of Real accounts. At least try to provide an exemple that works !!
If Buy EurUsd and Sell GbpUsd SO YOU BUY EurGbp! fool
@togr
'Ps: I was wondering how come Fx could move 1 single pips since when you buy you have imediate counterpart that sell. So it's equal'
HAHAHAHAHAHAHHAAHAHAHHAH
So funny!
I will explain you 1 day.
@CrazyTrader
Dear ...,
I have an idea for you. As you did wipe all your real accounts you can do 2 things.
1. Give your advice as much as you can. It will be very valuable - just put the note to do exactly the opposite
2. Trade as usually but REVERSE all your trades, it does mean buy instead of sell and vice versa.
I believe with such approach you become a very successful trader worth to follow.
You are welcome. And no, I am not kidding you, I am serious, trying to help you recover the loss of all your accounts.
BR
Tomas
Fichiers joints:
Oct 25, 2016 at 06:33
Janeo posted:ilqarsadiqov200 posted:
Hello. Please excuse me for my newbie question. I want to hedge my forex positions (i.e buy or sell ) with other financial instruments with no loss to my capital. Is it possible anyway ? How i can do this if this possible ? Thanks.
If you want to hedge your position in currencies. One way to hedge is Triangular arbitrage in currencies only. But that would be like sailing in the same boat. So it would be better if you hedge your position by investing in Stocks and Indices to protect yourself.
Completely agree! Invest in different markets to mitigate the risks. I like this approach.
Once a trader, always a trader!
Membre depuis Nov 12, 2010
posts 178
Nov 16, 2016 at 18:20
@togr And everyone else (But mainly you since you said 'try it out')
If 3 pair triangular trading doesn't work, then explain this account -->
https://www.myfxbook.com/members/bestdarngood/fxcm-5000-d1/1822431
You guys are only ever thinking Instantaneous trading (Looking at a snapshot of the market at a specific point in time). What you fail to realize is that you need to look at a longer time period and realize that all pairs don't move equally and cancel each other out.
For example, take whatever the current price of 3 pairs such as AUDUSD, EURUSD, and EURAUD and notice how at the specific instance you look at, there is a relative bias towards one pair. Then think if all pairs were priced at parity 1:1:1, there would be no bias. Or look at a different point in time, I recommend pick a long time period to compare such as 1 year apart. Notice that there is a difference in the relative value and bias of the pairs. That difference in value/bias is how you can make money along with market inefficiencies. The pairs tend to gravitate towards each other so that if you were to trade a full circle, you would end up with what you started (minus fees of course). But if you trade when the market gets off a little, you can safely make profit like I show in the account I posted above.
There is the proof, just look at the history of the trades done.
If 3 pair triangular trading doesn't work, then explain this account -->
https://www.myfxbook.com/members/bestdarngood/fxcm-5000-d1/1822431
You guys are only ever thinking Instantaneous trading (Looking at a snapshot of the market at a specific point in time). What you fail to realize is that you need to look at a longer time period and realize that all pairs don't move equally and cancel each other out.
For example, take whatever the current price of 3 pairs such as AUDUSD, EURUSD, and EURAUD and notice how at the specific instance you look at, there is a relative bias towards one pair. Then think if all pairs were priced at parity 1:1:1, there would be no bias. Or look at a different point in time, I recommend pick a long time period to compare such as 1 year apart. Notice that there is a difference in the relative value and bias of the pairs. That difference in value/bias is how you can make money along with market inefficiencies. The pairs tend to gravitate towards each other so that if you were to trade a full circle, you would end up with what you started (minus fees of course). But if you trade when the market gets off a little, you can safely make profit like I show in the account I posted above.
There is the proof, just look at the history of the trades done.
See my profile or message me for my latest EA
Membre depuis May 17, 2013
posts 33
Nov 16, 2016 at 22:05
Regardless of the reasoning it is a delusional strategy if the aim is to trade with no risk. There is always risk - just that you don't know what the outliers are given that the strategy is so convoluted. You are attempting to triangulate the inefficiency of volatility spread between supposedly correlated pairs. Just note the conditional 'if' in your statement.
Conceptually isn't it easier to trade just one pair (any pair) and trade the trend? If you can't make money trading one pair what is the logic that you can make money trying to trade multiple basket pairs in some form of convoluted way? If the whole strategy is dependent on market inefficiency, how do you determine when the market is in that state and able to trade it?
If your proof of concept is a trade account (which is a demo by the way), I can also show you martingale accounts that can perform for a period before it gets blown. You have to first get past the logic.
Conceptually isn't it easier to trade just one pair (any pair) and trade the trend? If you can't make money trading one pair what is the logic that you can make money trying to trade multiple basket pairs in some form of convoluted way? If the whole strategy is dependent on market inefficiency, how do you determine when the market is in that state and able to trade it?
If your proof of concept is a trade account (which is a demo by the way), I can also show you martingale accounts that can perform for a period before it gets blown. You have to first get past the logic.
Membre depuis Nov 12, 2010
posts 178
Nov 17, 2016 at 01:10
Dove_Services posted:
Regardless of the reasoning it is a delusional strategy if the aim is to trade with no risk. There is always risk - just that you don't know what the outliers are given that the strategy is so convoluted. You are attempting to triangulate the inefficiency of volatility spread between supposedly correlated pairs. Just note the conditional 'if' in your statement.
Conceptually isn't it easier to trade just one pair (any pair) and trade the trend? If you can't make money trading one pair what is the logic that you can make money trying to trade multiple basket pairs in some form of convoluted way? If the whole strategy is dependent on market inefficiency, how do you determine when the market is in that state and able to trade it?
If your proof of concept is a trade account (which is a demo by the way), I can also show you martingale accounts that can perform for a period before it gets blown. You have to first get past the logic.
This is actually running on multiple accounts, but I do not have permission to share the real accounts even though one of them has over 250,000 in it running this EA.
Also, regarding your other concern this strategy has been backtested using a custom made program to test the 3 pairs with both Bid and Ask tick data for all 3 pairs. So it is not proof of concept, I just have the demo account to share with others.
I would also like to point out that I did not state 'no risk', but rather less risk especially when a pair decides to spike or dip wildly.
I agree that conceptually it is easier to trade 1 pair, but this strategy limits the risk by protecting against big moves.
See my profile or message me for my latest EA
Membre depuis May 17, 2013
posts 33
Nov 17, 2016 at 12:10
bestdarngood posted:Thanks for your clarification.Dove_Services posted:
Regardless of the reasoning it is a delusional strategy if the aim is to trade with no risk. There is always risk - just that you don't know what the outliers are given that the strategy is so convoluted. You are attempting to triangulate the inefficiency of volatility spread between supposedly correlated pairs. Just note the conditional 'if' in your statement.
Conceptually isn't it easier to trade just one pair (any pair) and trade the trend? If you can't make money trading one pair what is the logic that you can make money trying to trade multiple basket pairs in some form of convoluted way? If the whole strategy is dependent on market inefficiency, how do you determine when the market is in that state and able to trade it?
If your proof of concept is a trade account (which is a demo by the way), I can also show you martingale accounts that can perform for a period before it gets blown. You have to first get past the logic.
This is actually running on multiple accounts, but I do not have permission to share the real accounts even though one of them has over 250,000 in it running this EA.
Also, regarding your other concern this strategy has been backtested using a custom made program to test the 3 pairs with both Bid and Ask tick data for all 3 pairs. So it is not proof of concept, I just have the demo account to share with others.
I would also like to point out that I did not state 'no risk', but rather less risk especially when a pair decides to spike or dip wildly.
I agree that conceptually it is easier to trade 1 pair, but this strategy limits the risk by protecting against big moves.
I understand conceptually the nature of such a trade model where the risk modelling is using offsetting inverse relationship to limit the risk band. In risk modelling there are two primary risk i.e. risk (which is quantifiable) and uncertainty (not quantifiable). Whilst such a model might limit direct risk it invariably in my view increases uncertainty (thru more moving parts) and may by design potentially increases overall risk. The logic is that such a model assumes risk is limited to certain elastic band because of an established correlated relationship between the pairs. The problem comes in when there is a market event that dislocates the historical relationship such as what happened with LTCM. I assume the model does not use protective stop because that would be self defeating due to design requirements.
In the historical backtest, did it include any significant market event that may have temporarily dislocate such relationships e.g. when SNB removed its cap? We know that outcome caused some brokers to go broke due to inadequate risk control.
Membre depuis Nov 12, 2010
posts 178
Nov 17, 2016 at 12:24
My Backtests covered all of 2015 where we saw the January events caused by the Swiss. Since I was using real Bid and Ask data, my tests were even more valid than using Strategy Tester with a set Spread.
After years of trading, limiting losses is my number one concern, making small consistent profits is better than making big profits and big losses.
After years of trading, limiting losses is my number one concern, making small consistent profits is better than making big profits and big losses.
See my profile or message me for my latest EA
Membre depuis May 17, 2013
posts 33
Nov 17, 2016 at 12:50
bestdarngood posted:
My Backtests covered all of 2015 where we saw the January events caused by the Swiss. Since I was using real Bid and Ask data, my tests were even more valid than using Strategy Tester with a set Spread.
After years of trading, limiting losses is my number one concern, making small consistent profits is better than making big profits and big losses.
All the best and good trading.
Membre depuis Nov 12, 2010
posts 178
Nov 17, 2016 at 13:07
Dove_Services posted:bestdarngood posted:
My Backtests covered all of 2015 where we saw the January events caused by the Swiss. Since I was using real Bid and Ask data, my tests were even more valid than using Strategy Tester with a set Spread.
After years of trading, limiting losses is my number one concern, making small consistent profits is better than making big profits and big losses.
All the best and good trading.
Thank you, the same to you.
See my profile or message me for my latest EA
Apr 24, 2017 at 14:45
To be honest, hedging is not any reliable solution for the retail Forex trader, that’s way, I never tried this complicated one! For me, swing trading is the perfect trading style; on the other hand I am also interested on scalping trading! Hedging is not for general trader, so don’t block your trading capital if you are not expert on it!
