An Idea for a forex broker

Why stick with just 1 broker?
If you have enough capitol open an account with more then just one broker there are a number of good reasons for this. And I dont know them all but here are a couple of the ones I do know.

  1. every broker has different offers and promos if you open an account with them. i.e. proffesional charting software with a minimum margin, some use mql4 others offer great trade signals
  2. forex options, 1 way to improve your odds of success is to hedge your trades with options
  3. some brokers wont allow you to hedge a trade i.e. go long 1 trade while you go short the same pair, there are times when you might actually want to act like an investor in a pair and go long and other times when you might actually want to day trade the same pair and go short
  4. lets say the broker goes belly up, you’ve diversified your capitol so its not tied up in one basket

Question 4, wouldn’t you want to find some way to secure your funds if your broker did go belly up? I am not sure how one would go about this.

Question 3, I never really liked the idea of hedging. If you where wrong then just close it. If you can’t endure the big drawdowns then decrease your lot size.

Having a longer term position and trading in the short term is totally different from hedging in which case I would support multiple brokers for such a thing.

I may be incorrect but its my understanding is that a hedge is a divisor and anytime that your trading on both sides at the same time your hedging. While the primary use of hedging is to protect yourself in a trade it also has applications in range trading conditions when your actually looking to take profit from both trades.
I dont have any personal experience with a broker going belly up but from what I’ve read the assets of the individuals who had investments with brokers that went belly up were not immediately returned to these individuals and it could take some serious time before you are reimbursed if ever. Perhaps someone with experience in this area could shed some light on the topic.

I have tryed hedging on demos several times. What I have found out is that if you use s/l you get stopped out on both sides. I you don’t use s/l then One side will go good and the other side will bust so you think that you are at break even, but then theres the intrest to look at. Since you always pay more then you can make you always lose on intrest.

I have seen one site that claims to make money on hedging but you only get a 2 week free trial. That is not enough time to test it. Of course you can order the service for $100 USD a month and demo as long as you want but I dont like that idea.

My final thoughts on hedging. Don’t do it!

I have Hedging EA, its great and have make me gain consistent profit in lite broker. this EA is combination of hedging and martingale. sure, it need more margin on our account, but this EA have done its job well…

Hedging is good for someone who actually have the goods being trader and usually people used shares and option,
with option you can hedge position, you might say it works as insurance.

Personally I don’t like hedging where people can open equivalent short and long, why bother to hedge?
you pay the spread and in the end when you close one position its the same like you open opposite position.
In short hedging equivalent position only donating pip to broker.
But for option it is different and work as insurance if something bad happen, that is hedging or transferring risk to other who want to accept the risk.

I think most pro-traders have more than one account spread across different brokers. Makes perfect sense to me. When it comes to hedging it is great if you understand how to hedge, most traders are clueless about how to do it properly.