Can you make a stop-loss on a hedged position, hence a long-short position, in MT5?
Hello
I am looking for a way to make a stop loss on a hedged position, can anyone help me?
Of course I know how to make a regular stop loss. e.g. If I buy stock A at price 100, I can fx make a stop loss at 90, so if the price goes below 90, the stock will be sold. What I am looking for is a stop loss on a hedged position. e.g. if you buy stock A at 100 and sell stock B at 50, then the ratio on the long-short position is 2 (=100/50). I would now like to put a stop on this ratio, such that if fx the ratio moves to below 1.6 the position will be closed hence stock A will be sold and stock B will be bought back.
I like to hedge out risk in this way. But i need to be able to set this stop-loss on the ratio. you cannot set one stop-loss on stock A and one stop-loss on stock B, you have to put the stop loss on the ratio. I hope that since MT5 has a auto-trading function, then maybe it´s possible to code this? - I don´t know? Most plafforms doesn´t have the opportunity to make this ratio stop-loss, but they do exist. The problem is that these platform are very expensive and can only be afforded by Hedge Funds and Investments Banks.
If anyone can help - or point me in the wright direction, I would be very thankful. Honestly I don´t know where else to figure it out at the moement. If it´s not possible in MT5, then maybe someone know another way, maybe another platform where it´s possible.
THX
Esben (Denmark)
It can be coded. You just have to hire a freelancer.
By the way if you really trade stocks, you will have a netting account and only 1 position so it's even easier to do, and you don't need to code.
Hi
Thank you for your answer. I have traded a little, but have never tried this strategy, where you have to close two positions at the same time, by automated stop-loss, based on the ratio between the stocks. What I want is to have maybe 5 pairs of long-short positions, so 10 stocks in all.
1) How does such a netting account work and how do you get it?
2) How do I hire a freelancer and what should the price be? - I have no idea of how long it would take and how difficult it is, so what is a fair price? How does the transactions work, and can you trust the freelancers?
Two position accounting systems are supported in the trading platform: Netting and Hedging. The system used depends on the account and is set by the broker.
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and continue with this link - https://www.metatrader5.com/en/terminal/help/trading/general_concept#position_type
- www.metatrader5.com
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Hi
Thank you for your answer. I have traded a little, but have never tried this strategy, where you have to close two positions at the same time, by automated stop-loss, based on the ratio between the stocks. What I want is to have maybe 5 pairs of long-short positions, so 10 stocks in all.
1) How does such a netting account work and how do you get it?
2) How do I hire a freelancer and what should the price be? - I have no idea of how long it would take and how difficult it is, so what is a fair price? How does the transactions work, and can you trust the freelancers?
See the links provided by Sergey. It's 1 hour work maximum. About trust, it's up to you to pick one who is trustworthy.
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Hello
I am looking for a way to make a stop loss on a hedged position, can anyone help me?
Of course I know how to make a regular stop loss. e.g. If I buy stock A at price 100, I can fx make a stop loss at 90, so if the price goes below 90, the stock will be sold. What I am looking for is a stop loss on a hedged position. e.g. if you buy stock A at 100 and sell stock B at 50, then the ratio on the long-short position is 2 (=100/50). I would now like to put a stop on this ratio, such that if fx the ratio moves to below 1.6 the position will be closed hence stock A will be sold and stock B will be bought back.
I like to hedge out risk in this way. But i need to be able to set this stop-loss on the ratio. you cannot set one stop-loss on stock A and one stop-loss on stock B, you have to put the stop loss on the ratio. I hope that since MT5 has a auto-trading function, then maybe it´s possible to code this? - I don´t know? Most plafforms doesn´t have the opportunity to make this ratio stop-loss, but they do exist. The problem is that these platform are very expensive and can only be afforded by Hedge Funds and Investments Banks.
If anyone can help - or point me in the wright direction, I would be very thankful. Honestly I don´t know where else to figure it out at the moement. If it´s not possible in MT5, then maybe someone know another way, maybe another platform where it´s possible.
THX
Esben (Denmark)