Assuming a tight stop loss, and (either on a news day where a 70-100 pip jump can be expected), or certain circumstances such as a boli band squeeze or ranging over an extended period of time, have any traders experimented with the using multiple brokers to hedge a position and wait for breakout? Hedging is not allowed by US brokers, but using an off-shore broker or using multiple brokers can by-pass this limitation. This is for 1 and 15 min charts only of course. I’m working through Tymen’s excellent thread on trend trading, but I’m hoping to have a short and longer term strategy for mutual reinforcement for tight whipsaw markets like we’re in right now.Thoughts? Upside/downside?
Or in the US you can open two accounts with the same broker: go long in one & short in the other. Oanda has never allowed hedging but they will tell you to open 2 accts to accomplish the same thing. I assume other US broker will allow this but check them out. Also you can use a broker that has an OCO type order entry, One Cancels the Other. Place a Buy Stop and a Sell Stop order, when one is hit the other is cancelled. GFT & MB Trading has this and maybe others do too.
Actually, you can’t, at least for some brokers. First, there’s no firewall between accounts. Your margin gets hit from both accounts, my broker at least doesn’t segregate accounts. Second, I’ve done about 10 demos from various brokers and some of the brokers prohibit hedging from multiple accounts, you get the standard “hedging prohibited” message.
What is an OCO order? First time I’ve seen this, its it part of a standard MT4 package? curious, would accomplish the same thing, need to research this.
What is an OCO order?
Reread the 2nd to the last sentence.
Why hedge? You’re locking in the loss at the point you hedge.
still don’t understand the point of the hedging.
If you’re trading long term and short term on the same pair then I can see the point but it’s not really hedging.
If you’re going to hedge on the same pair because a trade is not working out, then it’s pointless, you’re just locking ion the loss.
If you’re going to hedge a long term trade on 1 pair on a different instrument then it’s possibly suitable but you need to know what you’re doing, you’re still locking in a loss if it doesn’t come back.
Oanda does allow you to go long in one account and short in another so you have the effect of a hedge.
I know one trader who says hedge the retraces in a trend but you have to be a better trader than I am to do that.
And it’s exactly the same result as if you closed the trade and got back in.
yeah, that’s what I think too, so I guess it’s just personal preference since the result is the same.
I think the right term here is ‘straddle’.
E.g. (just for illustration) for E$
longstop 1.2750, 2 parts trade, SL= 1.2625, TP1=1.2900
shortstop 1.2575, 2 parts trade, SL=1.2700, TP1=1.2350
I know a broker located in the US that allows hedging, short/long its called Wall Street Brokers.
By the way this is the brokers which I trade with.
That’s a nice strategy too I’d try this.
Yea I’d like to know more about the OCO too.
When you hedge, and return with your loss to the start point, you didn’t start from 0 again, you’ve made profit from the opposite operation you did, that’s why you hedge, and it prevents losing too.
The I’d not use Oanda.
Nope its not the same, you’ve made the profit of the opposite operation that you closed when your indicator started rising up again, when you get to your starting point.
Totally incorrect. If you go long at 100 and the market falls to 95 and you then go short at 95 you’ve locked in a 5 point loss. If the market then rallies back to 100, the long may have made back the 5 points, but now the short has lost 5 points. You can try any permutation or combination you like. If you buy/go long at X and sell/go short at Y, regardless of the order in which you do it or what you call the process) your P&L is always going to be Y-X.
I am watching this thread with some interest. 
Adam2010 clearly needs to learn some things about hedging. - or better stated - offset trading. 
Adam, if I took such argument to my snooker buddies in ‘the constitution debate’ I’d get barred from the next two or more rounds… here pips have learned to just watch in amusement then hand it back to sender two years down the line when ones learned how to really trade.
The idea or querry here was how to not miss out on the sudden jumps being made by price? How is a hedge expected to achieve this? I insist its a straddle.