rhodytrader, I like what you write, because you know what you are doing!
Sorry, hedgehog, why don’t you go into a casino and play there, thats maybe more fun? but ok, currency speculation is funny, too! Please be aware that this is NOT a game, it’s about economical developement and you are in competition to hedge fonds and investment banks! you know that they know 1000* better than you and me, how this game (I know that I wrote game! :D) works. I give you one really nice meant tip: they earn their money to a part with people like you (if you trade with real money…) and if they gain something, it has to come from somewhere. Do you know who pays their ferrari?
And rhody, thank you very much…you maybe are worth 1 point extra in our game and it’s a really important grade for me, which is again very important for my future, so that I can hopely buy a BMW in a few months (for a ferrari it won’t be enough probably, or I have to hire at a hedge fonds…)!
Far cry from gambling, my friend, when it is a sure win
I have a great video to post once the administrator allows me to post my videos on the forum.
I feel for you if you are not hedging and just starting out. How do the statistics go? 95% of all newbie traders don’t last – the numbers are quite telling. I’d do your homework before you jump to any conclusions.
I don’t know how my age will reflect my insight on hedging, but I am 27. I have been trading for a little over a year now with a live account. My average lot size is any where from 100k-400k.
What country do you currently reside in? Hedging has been restricted by the NFA in the US and it will be more difficult, if not impossible, for you to implement the strategy I propose.
This just flat out wrong. Any strategy which employs so-called hedging can be replicated in a non-hedge fashion.
As I’ve said repeatedly, hedging is just a means of accounting. It’s not a trading technique or strategy. Your profitability comes from where you get net long, net short, and net flat and nothing else.
This is one of advantage of hedging, yes (as you have already stated), but not the primary advantage. With newly implemented regulation though, if you try and take an opposite position with same pair, it will eliminate the first trade as you close out of the second position – not a true hedge (FIFO). Yes, you can calculate and compensate – I get it, but why not take advantage of both sides of the trend line and minimize your risk while keeping all accounts in order and in tact?!
Yeah, that must be it. Although I would have expected everybody to know that +5 -5 = 0.
(In this particular case even below zero, figuring in spread/commission.)
Profitable for whom? The broker who eats your spread, twice?
I’m not against hedging, if it makes sense, like hedging to offset a currency risk as an im/exporter or manufacturer of goods.
But hedging within the framework of speculative forex trading is just another way of convincing oneself that one can trade profitably … which is not the case, if one needs to hedge. ^^
Because there is no advantage, only additional expense in the form of spread/commission … unless you want to keep positions open forever, which may backfire really badly one day.
There is no trading advantage to hedging. It is mathematically impossible for hedging to provide an advantage.
why not take advantage of both sides of the trend line and minimize your risk while keeping all accounts in order and in tact?!
Because you can only be long, short, or flat. You cannot be more than one of those. That means you can only take advantage of side side of a the trend line at a time with a net directional exposure. If you are in a hedged position you are flat. No directional exposure means no taking advantage of anything.
