"Hedging" in Forex trading -Why do it? - page 6
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Marco vd Heijden:
MY strategy.....
Price is 1.2200 and there is a 2 pip spread
Buy at 1.2202 , TP is 1.2302
Sell at 1.2200 , TP is 1.2100
Both TP are hit, profit is 200pips
Only one TP is hit, the position will not 'alternate' and the opposing position will result in a loss.
//
I am going to code the robot as per my strategy, my rules, the ones i had laid out a few posts back.
And i expect anyone of the folks, that claims it should be same same results, without the flat entry, to also code their robot, so we can run the test, and see, whether the results are the same or not.
Fair or nah ?
In your earlier post you clearly stated that both TPs are hit on most days.
My post showed how the same results will happen without "hedging"
If you would like to code a simple EA in mql4, I will happily modify it so that it will have the same or better results without "hedging"
As my post was lost by accident, I restored it.
Forum on trading, automated trading systems and testing trading strategies
"Hedging" in Forex trading -Why do it?
Alain Verleyen, 2018.08.19 11:45
You are wrong Marco, @Attila Alp Oğuz is perfectly right.
False, wrong, not true !!! :-D
Firstly I don't see why you said you are stopped out on Wednesday, as per your screenshot Wednesday are both winner, maybe I am missing something. Anyway, doesn't really matter, let's talk about the second Monday (June,11) where obviously the sell trade will be in loss.
You don't make a +100, you are "hedging" damn it ! Did you forgot you other trade ? :-D While your buy is at +100, your sell is at -100 (let's forget the spread for simplicity).
You should be careful with such sentence, as it's you who are claiming something wrong without understanding completely the subject and writing false assumptions.
Let's be clear (with numbers from my broker Alpari). Let's consider spread = 0 for clarity, of course in reality it will be more complex but it doesn't change the reasoning.
You open a BUY and a SELL. You close BUY at 146.064, and the SELL at 145.864, both in profit, total + 200 points.
Attila (nice name ;-) ) and I, we monitor we don't open immediately, we monitor the prices. At 146.064 we open a SELL, at 145.864 we close it. +200 points in profit, 1 trade only.
You open a BUY and a SELL. You close SELL at 147.649, and the BUY at 147.849, both in profit, total + 200 points.
We monitor prices, at 147.649 we open a BUY, at 147.849 we close it. +200 points in profit, 1 trade.
You open a BUY and a SELL. You close BUY at 146.822, and the SELL at .... well you don't close it ? ;-) Let's say you close it at 147.114 (close of the day). So you have +100, -392 points.
We monitor prices, at 146.822 we open a SELL...and like you we don't know where to close it, probably at the close of the day at 147.114...in loss of -292 points. Damn it, it's the same as you.
Conclusion.
Wow, "hedging" is useless :-D. Add real spread and it becomes a bad practice.
EDIT: Keith I didn't see your post before writing.
EDIT2: Stamp one's foot, getting angry or whining are not considered as valid arguments.
In your earlier post you clearly stated that both TPs are hit on most days.
My post showed how the same results will happen without "hedging"
If you would like to code a simple EA in mql4, I will happily modify it so that it will have the same or better results without "hedging"
Exactly Marco should better learn how it could benefit from your points to improve the strategy, rather to get "mad" or to try to be right.
As I started this topic, I feel that I should do my best to back up my opinion.
As I don't do much in mql5, I hope that Marco can code his strategy for MT4 so that we will be able to put it to the test.
Marco, please take a look at the "Explanation of Proposed Amendments" section of the following NFA document:
https://www.nfa.futures.org/news/PDF/CFTC/CR2_43_ForexPriceAdj_112408.pdf
On page 6, under the title of "Compliance Rule 2-43(b): Offsetting Transactions":
"The other trading practice NFA believes must be addressed involves a strategy that FDMs (Forex Dealer Members) refer to as “hedging,” where customers take long and short positions in the same currency pair in the same account. NFA is concerned that customers employing this strategy do not understand either the lack of economic benefit or the financial costs involved ... Although many of the FDMs admit that customers receive no financial benefit by carrying opposite positions, some FDMs believe that if they do not offer the strategy they will lose business to domestic and foreign firms that do ..."
And the following phrase tells about the most dangerous situation, "hedgers" should be well aware of that:
"... Furthermore, if the bid-ask spread on the currency pair widens, as may happen when volatility increases or the FDM anticipates major market events, the customer’s account equity may fall even faster. If the account falls below its security deposit requirement while the spread is wider than normal, the account could be liquidated at unfavorable prices even though the customer has no currency exposure risk."
You are wrong Marco, @Attila Alp Oğuz is perfectly right.
False, wrong, not true !!! :-D
Firstly I don't see why you said you are stopped out on Wednesday, as per your screenshot Wednesday are both winner, maybe I am missing something. Anyway, doesn't really matter, let's talk about the second Monday (June,11) where obviously the sell trade will be in loss.
You don't make a +100, you are "hedging" damn it ! Did you forgot you other trade ? :-D While your buy is at +100, your sell is at -100 (let's forget the spread for simplicity).
You should be careful with such sentence, as it's you who are claiming something wrong without understanding completely the subject and writing false assumptions.
Let's be clear (with numbers from my broker Alpari). Let's consider spread = 0 for clarity, of course in reality it will be more complex but it doesn't change the reasoning.
You open a BUY and a SELL. You close BUY at 146.064, and the SELL at 145.864, both in profit, total + 200 points.
Attila (nice name ;-) ) Thanks ) and I, we monitor we don't open immediately, we monitor the prices. At 146.064 we open a SELL, at 145.864 we close it. +200 points in profit, 1 trade only.
You open a BUY and a SELL. You close SELL at 147.649, and the BUY at 147.849, both in profit, total + 200 points.
We monitor prices, at 147.649 we open a BUY, at 147.849 we close it. +200 points in profit, 1 trade.
You open a BUY and a SELL. You close BUY at 146.822, and the SELL at .... well you don't close it ? ;-) Let's say you close it at 147.114 (close of the day). So you have +100, -392 points.
We monitor prices, at 146.822 we open a SELL...and like you we don't know where to close it, probably at the close of the day at 147.114...in loss of -292 points. Damn it, it's the same as you.
Conclusion.
Wow, "hedging" is useless :-D. Add real spread and it becomes a bad practice.
EDIT: Keith I didn't see your post before writing.
EDIT2: Stamp one's foot, getting angry or whining are not considered as valid arguments.
So seems that this example makes the case very clear.
So seems that this example makes the case very clear.
It's very clear to me, but not clear enough for everyone though
As I started this topic, I feel that I should do my best to back up my opinion.
As I don't do much in mql5, I hope that Marco can code his strategy for MT4 so that we will be able to put it to the test.
I don't do much anymore in MQL4 but it's is fine the logic is simple.
I don't do much anymore in MQL4 but it's is fine the logic is simple.
That's great Marco. It doesn't need to be a complex EA. doesn't need to pass any tests.
Look forward to it.