Forex Hedging for Beginners (old version)
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- Опубликовано: 9 июн 2024
- Get the UPDATED version of this video here: • Forex Hedging For Begi...
Learn the basics of Forex hedging in this video for beginners. I'll give you specific examples of how it can be used, show you why Forex is the best market for independent traders to hedge in, and squash common myths about hedging.
Watch more Forex Hedging videos: • Forex Hedging
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0:00 Introduction
0:50 What is Hedging?
2:56 Why Forex Hedging?
4:07 Example: The Common Misconception
4:48 Example: The Solution
5:26 Example: Percentage Hedge
6:28 Example: Covered Hedge
7:01 Example: Full Hedge + Roll Off
8:25 Roll-Offs are the key to Success
9:14 Review of Hedging Benefits
11:53 Success Story
Watch my UDPATED beginner's guide to hedging here: ruclips.net/video/anRGAPHpzro/видео.html
Watch all of my hedging videos here: ruclips.net/p/PLOn0-_K-aYvRtCAS-wm9VuUw4ozdIS8kF
FINALLY i found a video about hedging. I’ve only just started trading this year but i basically came up with this hedging strategy in my head. I wrote this for notes:
After making a hedge, execute the order of whichever (buy or sell) trade that has made significant profit. For the other, just wait for it to bounce (with market analysis you can determine the measure of loss or even potentially profit). If price goes too far in one direction, execute both trades simultaneously, which would result in a break even.
For this strategy to work, make sure there is significant volatility and also make the trade when price is around the middle of the support and resistance zone.
This video explained most of it perfectly. Loved it!🚀
Nice! It's always reassuring to see that it's working for others too, especially when there isn't much on the internet about it.
Your voice.. is soothing and it makes one wanna listen to your topic
Thanks!
Wow, this is awesome! Thank you for the free guide, sir!
My pleasure!
Thanks for this
You're welcome!
Its a good introductory video to it youve made here. I've been using hedging in all markets for years now. There are many. many different ways to do it even from the ones you mentioned. For daytrading purposes i prefer to pair it with high win rate strategies on lower timeframes with poor risk reward like a 3-1 or very low win rate but really good risk reward. Also i set weekly targets for myself and if its been a poor week ill start to use hedging more progressively to help achieve the targets. The drawback is that it can be time and or capital intensive so id prefer not to use it but its an excellent alternative to a firm stop as you dont need to worry about stop hunting or fake outs not to mention that it significantly reduced my stress levels. In forex its fairly simple compared to future and stocks when you start incorporating options strategies mixed with shares it gets a little more advanced
Thanks, yeah it can get pretty complex. Just depends on how a trader's mind works and which exit strategy resonates.
I appreciate you sharing your experience. The idea of using it to make up for the shortcomings of a strategy or performance is awesome.
What baffles me, is that the market works in such a way that the less successful traders there are, the more successful the very few that succeed make money. Keep in mind that another trader has absolutely NO REASON to give you a winning method. On the market it's always gonna be YOU vs THE OTHERS. Why would someone want you to desperately us their "winning method" if that leads them to success on the market? That means they would offer you a solution to beat them? Think for a second people, the only thing you're gonna find on RUclips and forex courses are ways to get you bankrupt, because that's how the market works. Learn how the economy works, stare at candles all day and look at patterns, see the reactions, how things spike, etc... DO NOT LISTEN TO SOMEONE ELSE, YOU WILL FAIL.
Trading is just like any other endeavor, there will be a small number of very successful people.
There are 2 reasons to share a winning strategy: 1) a genuine desire to help others 2) to make money in a business. I don't see anything wrong with either one. Everyone goes to a job or has a business to make money...educating other traders is no different. Teachers in school teach kids for money, it's the same thing. Volunteer organizations help others without expecting a monetary return.
I agree that we shouldn't follow one person exclusively, but we do need to learn from others if you want to succeed. It speeds up the learning process dramatically, and how any skill is learned more quickly. That means seeking out as many opinions as possible, then using our discretion and intellect to figure out what works for us and what doesn't.
@@TradingHeroesgreat response to this comment. I’m glad you put these type of videos out. It’s actually helping me alot
Thanks for the valuable education, sir.
You're welcome!
bro this is really valuable video. thanks very much!
You're welcome!
Great video . I've been looking for something to help understand the concept. I requested your pdf. Thx
I'm glad it helped.
I would take two correlated pairs and only sell on the highest or buy on the lowest and then if it went against me instead of a stop loss I would put an opposite order on the other correlated pair and then often they would converge into profit
The logic I used before learning that what I was doing was hedging, was like this riddle. There’s this snail. He needs to climb a 10 meters wall. He manages to climb 4 meters everyday, but at night, while he sleeps, she slips also (haha) 3 meters. How many days will it take until he reaches the top? That’s close to how I read charts. I don’t use candles, hate them. I trade at the 1M chart, by market, no stop loss. Scary statistics. Any asset, any time. Better trading hours are sessions openings, news periods, day close. I do quite the opposite of what everyone do and teach. And I wouldn’t have it any other way. I never had to memorize not even physics formulas (except for eletromag, that’s smth appart), and I got desperate because I had a really different reading from what pros tried to stick in my head
hey thank you so much
You're welcome!
😊 thanks.. I think 50% hedge near resistance and support is very beneficial..
do you mean 0.50%? Just wondering
It is great for mitigating downside risk, If you can kill of your risk you can just move on to the next market with better opportunity cost
Thank you
You're welcome
Hey man, I purchased your course. Don't know how to access the videos though
Thanks for the video! Really insightful. Just wondering if this approach is accepted by most brokers? Ive heard they can withold your withdrawals if found out?
Most brokers allow it. If you have any doubts, contact the broker before opening an account.
A very informative and thought provoking video. I have always been fascinated by the concept of hedging but have only scratched the surface to date. Tired of technical analysis which is nothing better than 'an informed guess' at best, hedging the way you do it appears to be a very logical and mathematically pure way of trading that 'goes with the flow' rather than relying on preconceived trade setups where there are no guarantees of success. Many thanks.
You're welcome!
awesome content ...love it
Thanks!
Hello. I have been using the tradovate simulation. I have not been able to figure out how place both a long and short order at the same time? Does tradovate not let you place both at the same time? Or do you know of good platform or program that lets you place both long and short at the same time?
NakedMarkets: ruclips.net/video/5wx7ehDGnV0/видео.html
Hello thanks very much
You're very welcome, thanks for watching!
Thank you for your video. I am interested in trading the forex. Which brokers have low fees and good trading platforms would you recommend for us traders. Thank you.
Hi, here you go: www.tradingheroes.com/resources/
Would your Zen 8 course strategies work for CFD indices like GER40, AUS200 and US30 on Metatrader 4?
It's best on Forex. Other markets will depend on the spread and rollover.
Hello! I've got a question for the 1st method (Percentage hedge).
Wouldn't it be the same if instead of shorting 1 pip and longing .25 you would instead just short .75? Maybe I'm not understanding the difference or the benefits of that method of hedging, perhaps someone can explain to me. Thank you!
Hi, this will answer your question: www.tradingheroes.com/hedging-vs-stop-loss/
Awesome way of explaining hedging, I'm gonna dive into this. You should program this into an EA..
Thanks...it's not possible to program it. This is pure discretionary trading.
@@TradingHeroes it's not possible to program a 100% monotonous EA, It would take an AI. The indicators needed would probably conflict with each other but nevertheless I'm gonna attempt to start writing down the basic rules and build up along the way. To determine the turning points I can experiment with fib, support & resistance, supply & demand indicators on higher time frames , I would also need an indicator that averages out.But first I'm gonna watch your vids a few times over and study your zen8 guide. I'll keep you posted 🙂
The biggest challenge would be a trending market, ranging market wouldn't be a big problem to make it work
Cool.
It can be done in both, but ranging markets to tend to be a little easier.
Hi, is there a way to prevent ''ranging price'' move to hedge without placing many positions? What market session hedging is most profitable?
Hi, the solution is usually to practice on demo or simulation. When you do that, you'll learn how to not place excessive trades. I don't have one favorite session, I'll trade in any session.
How does this apply to FIFO Rule? In the US now we are no longer allowed to have an open buy and sell on the same currency pair at the same time. Also, we are unable to reduce cost as each entry much be a separate and different unit size for each and the first trade must be closed first. Is there a work around for this rule?
ruclips.net/video/ZmjLBCefhXY/видео.html
Kindly send me the PDF on hedging. Thanks.
Bro at 5:30 What if the price starts to fly up? You'll have the 0.25 lot long to profit in but the 1 lot short will make you make lose money because its flying up..? What is the solution here? Thanks in advance.
Hedge again.
hi very interesting, but I have one question in Full hedge after closing 1 lot long profit taken and half lot short take loss, then do you need to do again half lot buy again for another hedge? how many hedges do we need to do? to get profit at the end? Please advise many thanks hari
There are so many ways to do it. The best thing to do is to open a demo account and try it. This video is also old, so I'm going to make a new one.
thank you so much for this explanation. But what should I do if my Broker doesn't allow me to hedge?
Get another broker.
hi Hugh, wanted to ask how much profit percentage usually you get per month? because if it only around 1% I guess its not worth the effort and the risk
It depends, I have to take what the market gives me. But I switched to the 1 hour chart and have made as much as 6% in a week.
Thanks for this clear explanation. I'm subbing. However, you didn't explain indirect hedging .ie. hedging of negatively correlated pairs.
This is a video for beginners, that's an advanced topic. Thanks for watching!
@@TradingHeroes oh yes for beginners. However I would like to see you cover that in your future videos. You explain stuff really well. Also, a quick question, when hedging, how do you decide when to open and exit a trade. Do you open 2 opposite trades literally at any price or point on the chart ? Or do you base on some indicators to open positions in hedging? . So confusing
Glad it's clear.
It depends on the situation. Sometimes I use a pending order as the hedge. I use support and resistance.
Hi,
Thanks for this. A quick question for if I may, please . . .
You were very explicit in saying that the hedging strategies you outline in this video are only to be used trading forex and will not work in any other markets. Why only forex - surely the principles apply equally well to indices, commodities crypto and equities etc.?
Forex has the cheapest carrying cost, spreads, liquidity and transaction costs.
Just bought your hedging course, wish me luck sir.
Welcome to the course! No luck needed, just study, put in the work and ask questions. Version 2 is coming soon, it's much better than version 1.
@@TradingHeroes yeah I saw some of it thanks, I can't wait to practice it to demo account this coming week.
Where on the site is the course?
I’m having trouble understanding how you can roll off a trade without the original trade ever increasing more draw down. I mean by the time the hedge is in profit, the original trade would have incurred more loss. 🤔
@@message22610 you can read the RUclips description the course is there, and it's worth it.
hi , i just opened a buy position and market went down 130 pips . after saw your video i opened a sell position , but i don t know if i can still close my positions because the distance is to big
Did you read through the PDF?
@@TradingHeroes i am waiting for the email to come
To roll off losses you need to be right about market direction then, otherwise they accumulate and take you out?
No, you don't need to be right about market direction. That's the best part of hedging.
Cross hedge is underrated as it mitigates the risk of 1 pair to another.
Great if it works for you, but don't do that anymore. Just complicates things.
This lesson thought me alot, thank you sir. I thought about it but now I have no doubt about Hedging anymore. Stay blessed sir ❤️
Great, you're welcome!
I read a Japanese investor looking to buy 10-year US government bonds would face negative yields after accounting for hedging costs. How would they hedge buying US Bonds like that? Thank you.
I don't trade bonds.
In US.. could you just for example do a sell on cadusd and a buy on usdcad ?
That's essentially 2 buys or 2 sells, depending which order you put the currencies in. The best thing to do is open a free demo account and play with it to see how it works.
Good but better to play the top and bottom of recent ranges
There's no best style, only what works best for the individual.
I am not sure how after roll off and rehedge again with 50% short can make money either market goes down or up. Could explain more in detail regarding after the rollofff part rehedge. Thank youu
Did you download the free PDF guide?
The strategy seems to work until you have several 0.01 lots open and the market keeps moving in the opposite direction for a long time. I'm in that situation now and i don't know how to come out of it. Any ideas?
The first thing I do is hedge 100% to stop the bleeding. Then I look for other trades to offset the hedged loss. Once I have accumulated profit that's more than the hedged loss, I close out the losing hedge at a net profit.
God bless you so much. Thank you for the knowledge you share on this channel
why not start with 0.75 short from the beggining , why put 1 short and 0,25 long?
What happens if you're wrong about the short?
@@TradingHeroes Well if you are wrong with your hedge you would still be fuked the same amount because you have 1 lot losing and 0,25 wining soo is a net 0,75 lot losing what you do with that ? Makes no sence this kind of hedging as he said 0,75 short from beggining is the way you save in comision I belive hedge is fine mosltly for mental but that was stupid
Can you explain the roll off part i don't get it..
So exp: u'll buy and sell 1lot at same price then the price drops down u take all the sell position (profit) and only half the buy position.. hmmm of course u're at +1-.5=.5 lot profit but u still have that opened position of -.5 lot..
YOU'RE AT 00000???????
After executing the sell trade, he waits for price to bounce back up and then executes the buy. Its as simple as that.
I'm not sure how soon you can reply to this comment, but I'll be grateful if you reply fast. What happens when you have 0.01 lot size of both positions open. How do you go about that when one has a greater loss than the other? How can you close half of one position to secure a profit?
You just close the profitable full 0.01 lot, then look for another trade. If you're going to trade with MetaTrader, then the account size has to be enough to accommodate multiple 0.01 positions comfortably.
OK, thank you soo much
The strategy seems to work until you have several 0.01 lots open and the market keeps moving in the opposite direction for a long time. I'm in that situation now and i don't know how to come out of it. Any ideas?
I love hedging, since i discovered a good hedging technique i dont care anymore where the market is going because i know in the end ill always win. It simply takes away the anxiety and stress of hitting SL's.
The only thing i hate is when hedges 10+ pips away get triggered on huge overnight spreads. How are you handling this?
Don't place orders during rollover.
@@TradingHeroes I don't but I have stop orders (because it's nighttime where I live so I sleep during and after rollover) and often times they get triggered at unfavorable conditions while price didn't even come close.
Then you're trading pairs that have too big of a spread.
@all6senses can u teach me sir your hedging technique pls
Is this effective even when the spreads aren't tight?
It's easier when spreads are tight, but it's still possible to do.
if your in a short position and then add a long position doesnt it just close your short???
Only in US net accounts. To get around that you can use 2 sub accounts.
is Hedging guaranteed small profit every trade like some people say ?
No, nothing in trading is guaranteed. Anyone who says that hedging is guaranteed profit is just making videos to get views.
@@TradingHeroes 🤣🤣🤣
Halo sir hugh...just verified my email but still i dont recieved the pdf yet...im so interested with this strategy..
Hi, send me a message via the Contact page on my website and I'll send you the PDF.
@@TradingHeroes how to send message to you and how to go to contact page pls?
Hi, thank you so much for sharing.
However, I have a better idea.
Instead of trading live account like most traders, why not do hedging in demo accounts first?
Then once at halfway mark to either Take Profit and Stop Loss, you simply copied and pasted the winning currency trades into real live account.
😂
@@fpsrush5478 The other way is to hedge in 2 instead of 1 live accounts.
But lot size wise, you have to select based on your capital.
Not forgetting to place SL and TP on your trades.
I will be doing my own video on this very soon.
@@wesleyamuro good idea🤔
This i was interest but i cant no interest so i try this case you please me ✊️✊️
This is very informative....but as a newbie in the trading world, its a lot for me to take in. I am stuck in a hedge trade and my entire account is blocked because of this. Please let me know how I can connect with you to discuss this further. Looking forward for your response.
Ask your broker why your account is blocked.
@@TradingHeroes Thanks for your prompt reply.
This is a very nice strategy, will like to go deeper but don't know why it can't be used on crypto. All crypto exchange have the features you listed just like forex trading. Please can you explain more love to get the course.
Hi, cryptos are like stocks. Easy to go long, not as easy to go short.
Where the step to trade hedging?
This won't work for US Forex traders as brokers in the US don't allow you to take both sides buy/sell of the same currency. You would have to do this in 2 separate accounts- which is a bit cumbersome.
It takes a little getting used to, but it's fine. We can choose to see limitation or opportunity.
Why won't this work for crypto? I think it would.
Have you actually done it?
yes ive had trades open in both directions on btc
@@6joel4 yes it is i turn 20 usdt to 70 usdt using hedging i am trading the SAND coin
Great, I feel that most cryptos are too illiquid to do this with.
Hugh?!?
Wassup Chase! Happy Holidays!
i dont understand how do you make money with the roll off. you go long and short 1 to 1. then the trade that is in profit you close 100% of that trade and pay with that profit to the losing trade. then again you match the losing trade with the same size and now you are 1 to 1 again . the size of the trade is getting smaller but the loss in dollar is still 100% the same. Please help me understand what am i doing wrong?
I show you complete trades in my course: store.tradingheroes.com/product/zen8/
@@TradingHeroes Umm looks sketchy, can you make a video and explian the roll off ?
If you don't resonate with it, then it's probably not for you. 😀
4:30 beginner's hedging mistake, wth
👍
You just show us how to have an infinite profit strategy just with using math🤣 but something confused me about your zen8 guide on page 9. When you decided to partially close enough of your short position that would take the loss that would be about 50% of your 15$ gain by subtracting 2 micro lots, it said now that your short ended up with 8 micro lots. And then when you decide to hedge the short position your short position mysteriously changed to 7 micro lots in which you multiplied by -30 pips=-24$. But I thought 70 cents multiplied by 30 would be 21$?🤔 And what made it confusing is that after that you continued on with the guide by hedging 50% of 7 micro lots as if nothing just happened☹️ Was this just a simple mistake on your end?
LOL, right?! Thanks for downloading the guide and noticing the error. Yes, that's a typo. I'm working on a new version of the PDF and will have that soon. There are a lot of things that need to be improved with that guide 😀
@@TradingHeroes Yayyy!!! You made me love math more than I use to.
@@TradingHeroes Please keep us updated when you launch the pdf. You're a hero man. And in the meanwhile I want to make enough money to actually buy the ZEN8 Course😃