[dpaterso]

I'm glad it's going well although it's lousy when you are making a profit on one thing and you have to first cover your losses on your previous positions before your account balance starts getting bigger than it was the day before!!!

I have two open positions on GBP/USD (at my 'other' broker) and I've had those two positions open for nearly three of four weeks now (they're short positions) and I could NEARLY close them off yesterday but now - it looks like this pair is on it's way down (until next week that is i.e. if the Fed cuts rates next week you watch this pair go through the roof).

I don't know if this 'strategy' would interest anyone but it sure seems to work for me (that's why I've had these positions open for so long):

I open a position based on Parabolic SAR and if I have not made a profit but Parabolic SAR gives me a reversal signal then I 'hedge' the position fully based on that (new) signal. When I get another Parabolic SAR reversal signal I close out the 'hedge' (it's always in a profit at this point) and this profit then gets added to my account balance (but does not increase available margin). At this point I'm now trading in the original direction again and, as the price is now moving in my favour again, the loss on the original position starts diminishing and, hopefully, if the price keeps going in the 'right' direction, then the original position also turns to profit. If it does not and another Parabolic SAR reversal comes the you just repeat the process. In other words - my Parabolic SAR stop loss is not a 'stop loss' but a 'stop order' in the opposite direction.

I'm not sure that I'd 'advocate' this 'strategy' on forex pairs though. The reason being is that with the Indices there is an almost 99% chance that at some point they will get back to the price of your losing position - be it in a day, a week, a month, or even a year. With forex pairs though this does not seem to apply and they can stay at a certain level for 'decades'!!! Also - there is no interest payable or receivable on the Indices so it does no matter how long you keep the positions open.

That's probably why I'm a lot 'calmer' with my 'main' trading i.e. I don't mind if the position turns against me - I'll just take profit in one direction - and - when it turns - I'll take profit in the other direction (but this last 'profit' is not really 'profit made' it's more like 'loss eventually reduced to zero' if that makes sense).

For those of you that want to 'try' it at Delta - you have to enable the 'Trade with logical positions' option BUT I don't advocate it's use on forex pairs - just mentioning it for interest sake (unless one of you has an idea to 'optimise' this 'strategy' for trading forex pairs).

It does require A LOT MORE PATIENCE (believe it or not) because it takes longer to make money if you land up in a fully hedged position because you have to wait for the swing both ways before you realise your total profit on both positions. You also have to be careful that you don't land up in a situation where you have one position that's in a loss and the hedge position is ALSO in loss and just keeps moving 'to and fro' because then you are in a range and you have to wait for a breakout in one direction or the other. This normally happens when the prices of the two positions differs too much i.e. the original positions was 'hedged' too late so there is a huge gap between the two prices.

The good thing about it though is it totally avoids having to write off any of your capital and thus ensures that you don't feel like I did yesterday.

Also - once the positions are fully hedged - you're immune to anything and everthing (like 'spikes' and 'bad data' and stuff like that) and you don't have to worry that your broker is going to try and 'f**k you' while you're not looking!!!

I 'stumbled' across this a long time ago - while I was listening to an interview with the CEO of a major investment company. He was being asked 'so how much did you lose because of the drop in stocks over the past couple weeks' and his reply basically was that they did not lose ANYTHING because they NEVER close out a 'losers' i.e. if they see that the market is going down they will 'hedge' their positions and wait for the turnaround. Like I said - this works with stocks. Basically it seems to be based on the principle of 'only ever going long' (like in the good 'ol days) i.e. you buy stocks - they go up - you sell them - not like today where you can 'sell' (or go short) something that you never 'bought' in the first place.

This 'strategy' is one of my 'best kept secrets' so don't show anyone!!!

Anyway - just passing time!!!

Regards,

Dale.