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Thread: Hedging.

  1. #21
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    PS: I started using this technique today and it is working fine. Again, I do not know any more than the next trader, so I am testing things carefully - all traders have to test new things, nothing stays the same, so there is no one strategy that lasts forever.

    Thank you to FXCM for allowing bi-directional trading (there, I avoided the 'h' word) on their UK accounts!

  2. #22
    Jason Rogers's Avatar
    Jason Rogers is offline Verified Broker Support and Analyst for FXCM FX-Men Honorary Member
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    Quote Originally Posted by PipMeHappy View Post
    PS: I started using this technique today and it is working fine. Again, I do not know any more than the next trader, so I am testing things carefully - all traders have to test new things, nothing stays the same, so there is no one strategy that lasts forever.

    Thank you to FXCM for allowing bi-directional trading (there, I avoided the 'h' word) on their UK accounts!
    I wish you all the best with your strategy, PMH. And to be clear, it's not hedging I have anything against. It's a tool, just like a stop or a limit. You and I simply have differing views on how best to use this tool. But without different perspectives there would be no trading.
    Ask me questions in the Broker Aid Station:
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  3. #23
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    Quote Originally Posted by Jason Rogers View Post
    I wish you all the best with your strategy, PMH. And to be clear, it's not hedging I have anything against. It's a tool, just like a stop or a limit. You and I simply have differing views on how best to use this tool. But without different perspectives there would be no trading.
    Very magnanimous, Jason!

    Long-term trading is not for everyone, and of course it is better for quality of life but if you want

    quick results...ah, what are those, again ? ;p

    I have not forgotten your admonishment (see much, much earlier on my 2013 Forextown thread) about

    overleveraging, though, and this is how I am where I am... Thank you so much for your

    guidance, advice, patience, and occasional bell-ringing
    Last edited by PipMeHappy; 07-08-2016 at 02:32 PM.

  4. #24
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    Default for as long as both long and short positions are open in the same currency pair

    Quote Originally Posted by Jason Rogers View Post
    Hi PMH,

    Hedging is only prohibited for US residents, and [omissis].

    Since you have an FXCM UK account, you should have hedging enabled by default. If not, please click on the MyFXCM button. On the webpage that pops up, you can update your Hedging Functionality.

    That said, Rhodytrader has a point about hedging. The only valid application I know of is to run multiple strategies on the same currency pair. For example, Strategy A may place long term trades using weekly charts, while Strategy B may be a scalping off of 5-minute charts.

    If however, your goal with hedging is simply to avoid taking a loss on an existing trade, it's important to understand that placing a second trade in the opposite direction on the same currency pair to avoid closing the first trade is mathematically equivalent to closing the first trade. Any gains you make on one trade will be offset by losses on the other for as long as both long and short positions are open in the same currency pair.
    ... and exactly that's the point. Price moves up & down, so it might be that you could close one position while price goes in one direction and, hopefully, you close the other when price reverses. That could net a "double" win or, while you get panicked, a double loss.

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