there is a reason that there are what they call hedge funds, they hedge, there is also a good reason why us persons cannot hedge anymore, at least not easily, because that’s where the lowest risk is, and while most traders who would hedge, don’t hedge UNTIL they are in trouble, while that may seem the way to save yourself, position that’s in huge DD, but the reality is that if you hedge up 100%, then you are just locking in all that DD. The smarter thing to do, think on this, long and hard, is to hedge right off the get go! and buy one and sell one same size at the same time, and thus you are locking in small DD, in the amount of the spread.
now imagine, you put on 2 orders in eurusd, each 1.0L, one long and one short, less than a pip apart.
NOW, you wait! for the price to change say 50-100 pips or some other preset pip amount and set this as a TPT, if the profit stop hits you have now banked 1.0L x 50 or 100 pips or whatever your tpt was set to, you set it on both orders, eventually one of the orders has to exit in the $, no stop losses!
so as soon as one hits your tpt, you will have banked say 50 pips, BUT you are DD 50 pips on the order that is still on.
I will take banked pips anytime and am willing to take 100% DD of banked profits.
Exactly the way I trade my large accounts… I’ve posted hedging concepts all over Babypips… by laying down an inverted hedged grid, the constant whipsawing of price action generates profit… the wider the step the less the risk…
It’s just too revolutionary for 99% of traders to get their head around… Especially risk management techniques that doesn’t incorporate a SL is unadulterated blasphemy in these threads… most of who believe that Forex is complicated and therefore must use a complicated solution to profit…
Why else would the US Regulators have banned retail traders from hedging positions??
Ahh… @MattyMoney, and so am I… a whipsawing-choppy market IS a ranging market… which confirms my point about traders lack of understanding of how hedging can be used as an effective strategy…
I think there should be no secret in forex and all experience trader should open all their experience to new traders.Knowldge and skills will be the key factor in Forex and if a trader have all skills and knowldge he can make lot of profit.
Interesting. I’m intrigued. With this grid you’re selling while price is rising, with the expectation that price will fall back down to at least your starting point, then vice versa. Which in a ranging, or choppy market is very common. This is opposite of the strategy I was studying earlier, hence the name “Inverted”, and definitely not one for the beginner.
I am definitely going to test some of these hedging strategies to gain some more knowledge and experience. You never know where it will lead. Well, I guess we know where about 90% of it leads…
Absolutely… and another secret that many also unfortunately find out too late in this zero sum game…
If you trade the strategies that nearly all FX Educators are putting out there… you will join the 78% - 96% of traders that constantly lose money to these markets and eventually give up in disgust…
“How to make a small fortune in the OTC Markets… Start with a Big One…” - Ben Dover…
I think that every trader has some observations, which can be useful in his trading and serve as a part of his trading strategy. So you will have them too, just give yourself some time to get as much experience as you can…
In this strategy, you are selling in an uptrend and buying in a downtrend, while estimating to price reverts and positions go to + PIPs after trend reverted? I’m in no position to mock anyone, but by what estimation algorithm or expectation are you sure the trend will be reverted?
Why 10PIP and 0.05Position-size are magical numbers in this?
how long we keep going in case we encounter a consecutive loss?
How the first entry will be selected, by what logic and algorithm?
Hey @campione, Hope you are safe and well. I put up that diagram just to show how the logic of the strategy operates. I’ll answer your questions in order below…
You are effectively waiting for price action to come to you… you are opening pending orders so until price moves toward the upper grid or the lower grid… no positions are opened. The strategy is designed to profit from the constant whipsawing of the pair…
So you are opening shorts as price gets higher prior to reversing back down and the same with when price moves down into long positions before reversing back up.
These values were only added for the example… the larger the step the safer the strategy… Test it on a Demo with 50 pip steps and 0.01 lots… you have nothing to lose.
You have to do the math when laying up the grid so you are comfortable that you can hold the DD without risking your account…
ie: If you had pending orders situated every 20 pips by the time price moves up 100 pips you are carry 5 negative positions… not a good position to be in for small accounts… if you have orders situated every 100 pips, price can move against you ~300 pips before you have a substantial DD. Hence the larger the grid the safer the strategy…
Lay a grid over a few of your 4 hour / Daily charts… see what results you would achieve.
See the first answer. Price action will decide the first entry as price moves up or down across your charts.
See example above… EURAUD 1Hour (Chosen because it moves large pips) with Step set to 75 pips. First position won’t open until price has moved more than 75 pips up or down… would cover off price action over the last 12 or so days…
Have a look back at the history of the pair you wish to trade to get an idea how price is moving and set your grid to suit.
I’m fine, thanks. I hope you feel great and have 1000 of PIP days ahead lol
I don’t get why it can’t be the other way, vice-versa?
I don’t get in a trending market, how is possible to detect the middle of the trend? As only for an entry point, A or B in the figure, it may be possible to say when the trend started, which way it may head, but where to put the C in figure below is obscure in logic to me?
Do you mean my analysis for price-action shall be focused on past 12 days for getting this e.g. 75PIP as entry step value?
Does this technique work if price moved from A to B to about ~C? What if the price breaks the price layer and go toward D and continue more than 150 PIP in the direction of D, and never come back? What this technique says to do for that situation? Any exit/fail-safe strategy to quit this technique or open/add to positions to cover this movement toward D and beyond?
