How to Hedge trading Forex | Forex Hedging Strategy
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- Опубликовано: 14 май 2024
- This is my Forex Hedging Strategy. Hope you find something useful!
#forexheding #forextrader
00:00 Introduction
00:30 When to Hedge
02:49 Trimming the Hedge
10:02 Squeezing the Hedge
11:46 Building from the Inside
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*None of this is meant to be construed as investment advice, it's for entertainment purposes only.
The information contained here and the resources available for download through this website is not intended as, and shall not be understood or construed as, financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information contained on this Website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.
I have done my best to ensure that the information provided here and the resources available for download are accurate and provide valuable information. Regardless of anything to the contrary, nothing available on or through this Website should be understood as a recommendation that you should not consult with a financial professional to address your particular information. I expressly recommend that you seek advice from a professional.
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CFTC RULE 4.41
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
using my strategy + replacing my stop loss with your idea = a game changer for me thanks aloooooot......you got my respect and a new subscriber
can you share your setup?
You saved my life, this video is EXACTLY what I needed. I spend countess hours trying to find it something about it. Man, I can't thank you enough. I hope you the best, thank you very much for the knowledge. God Bless. Subbed
Thumbs up for simplifying hedging. Usually every where one can see closing down profitable position and doubling down loosing one and average out. This is opposite and reduces risk significantly.
End to End example where gap increases significantly like 200-300 plus pips will be helpful in addition to V shape reversal.
Yes! I’m so glad you see the reduction of risk. This is my main priority. Video coming soon with more explanation on trading from the inside!!! Thanks for the comment, really appreciate it!!
Can finally hedge with knowledge of an exit strategy, thank you very much. Great video and the first content provider too not ask for the thumbs up or subscribe and that was the first thing I did. Thanks again.!
Ha. Thanks! Glad you found it helpful
I have been experimenting with hedging for a few months now and this trimming idea is genius. May be the last piece of the puzzle for me. Thx!
Heck yea!!! This made my day. Make sure you let me know how it is going for you down the road!!
i do like it 2. inplace of loss you end up with some profit,if you got the direction wrong.
@@toms8879 Exactly!!!!
Welcome, thank's for the information. Clear and concise.
Thanks!!! Sure appreciate the feedback! Glad you stopped by!
Awesome informative video, please keep them coming !!
Thank you!!! I'll try to keep them coming!
Thank you so much for your knowledge. Can't wait your next video for further explanation.❤❤
Stay tuned. Planning to do some live trades. So you can see it in action!!!
i can call this one of the best trading videos ever. best strategy
Oh wow!!!!! Thank you for the compliment!! Totally made my day!!!!
This is a brilliant idea and I have found a EA bot that does this for me. 💯
Do you mind to share the EA bot name that does this hedging strategy please?
Could you be so kind and share the bot name or where can be found and tested? Thx a lot!
Sir, Your wisdom is great--my question is how to slow down too many orders on volatile pairs eg-- gbp/aud, gbp/jpy, eur/nzd where reversal/hedge order has to be about 50 pips out and so profit has to be around 100 pips otherwise commissions eat up any edge/profit. Volatile pairs run & run in front of your eyes & hedge orders keep on getting hit & process becomes big project in itself. We need your wisdom.
Thank you SO MUCH, I was struggling with the math:D
In this example when you are inside the hedge your position goes straight to the take profit so you can trim the outside long position, but i wonder what would you do if that position gets hedged too, how do you decide which ones you will trim in this case? Keep up with these nice videos!!
Ironically, you're such a "Chad" for coming up with and sharing this. It's truly brilliant. I really appreciate it, you're a pleasure to listen to, thank you.
There's one thing I'm not understanding, about unrealized loss. If the hedge position is 30 pips away, and your take profit is 40 pips away, the drawdown would be 70 pips. But then you add another 30 pip buffer for a chance to get a clean trade. But if it triggers then your next take profit would be another 40 pips away. Each trade essentially would add another 70 pips. If you're able to reduce it by 50% the first time, the distance has doubled and left your unrealized loss the same as it was.
In this case, is the unrealized loss only addressed by Inside trades? Either by using a portion of what you'd pocket, or by clean inside trades (or squeezing inside trades). But with less units on the inside, it seems like it would be a long grind to offset the unrealized loss. Then that inside hedge may eventually become as wide as the outside one, with less shares at your disposal to do another inside hedge inside of the inside hedge, lol.
I get that it's unrealistic for the chart to trade within your hedge that long, but trying to understand. Thank you again. Best regards.
same thought I had
Maybe consider hedging at the market or say 10 pips. For your style this may work better. The bones of the strategy are to take profits and trim losses. You can totally change the spread to fit your style!!!
@@theforexhedge already moved it to 10:30 before I began. Was going to mention it to you, but later saw you were experimenting with 10:30 also. Btw, how is that going? I know you do the CAD, personally I’m doing it on the EUR/USD … but wondering if the lower volatility of the CAD, makes it more likely to get a clean trade even with 10:30.
Trading aside, hope all is great. Genuinely.
Thanks a lot for the wonderful content. I am still trying to get my head around your strategy. I have watched some of your videos multiple times now. Quick question - At the end of the video you added a 11,275 unit position in order to bring the two outer positions in balance. How do you trade from that point onwards? Do you assume the outer orders are perfectly hedged and start trimming from the inside? But isn't that bringing you back to where you started when you had two outer positions of 29k units each? They will never get closed as they keep get balanced?
I use hedging pretty much as a replacement of a stop loss but I always have trouble getting of the hedge, your video helped a lot. Thanks!
Glad it helped!
Really nice approach and explanation, will mesh it with my own hedging and see how it goes. Have a sub!
Awesome, thank you! Good luck in your trading!!!
How is your hedging done?
its a fun way to trade. check out the video, might help you get started!!!
@@archiebrymah7891 It is not done yet. I have not done anything new, so no new video. I was hoping to trim it today, but it just did not get far enough in the money. So, we wait. Patience!!!! As soon as there is new activity, I'll get a new video out! Stay tuned!
I'm using hedging strategy to but one thing that didn't come into my mind is to trim the lossing side as win you on other the side and I was like OMG!! that strategy really makes sense I was mind blown dude ahahahaha. Anyway thanks for this and will continue to support your channel I may learn more about hedging.
Right on!!! I love seeing comments like this!!!!
This is very good strategy
thank you for sharing this strategy with us
Thanks for the video, I`m currently trading a good strategy and hedging but didn`t know how to trim the hedge until I saw your video, thank you so much for the information, I`m now starting to apply it in my account to bring back my liquidity.
Right on!!! So glad I could help!
Hi again!! I have some questions for you that might also help you as well.
1. At 6:50 mark, why don't you just enter the short hedge immediately? Why add additional 30 pips? Your long position is already in drawdown. So, if you add 30 pips to its down side, isn't this working against you?
2. Is there a difference if you use a larger pip size as your take profits? I see you typically use 40 pips. But, would the end result look the same if you used, say 100 pips for TP? Or would that actually negatively impact the initial long position by creating a huge disparity between the two hedged positions?
Thanks!!
Great Questions!!!!
1. I like to let them breathe in hope of being able to squeeze them. Trimming and squeezing is a great combination to make some profit, reduce some risk, and narrow the hedge!!
2. I love it when the market moves way beyond my 40 pip target. This is a range....my favorite is when it spikes and you get 80, 90 or more pips in profit. really trims the hedge!!!
Great one's 🎉
Thanks for the video 😊
Wow. Trimming Down is what I don't have in this strategy, I will try this.
thats the secret sauce!!! you gotta trim that hedge!!!
Sir... You earned Yourself a loyal subscriber ❤
Great video! Question: How do you calculate the units to close when trimming the hedge?
Hi, thanks for all of your videos. I was just wondering, I have a hedge on with an 80 spread between buy and sell orders, I know I must be able to trim this, do I need to wait till one side is 80 pips in profit before trimming or is it possible to start trimming from 30 pips in profit?
I usually start thinking about trimming at the 40 pip mark. But getting 80 pips is awesome!!! just a bigger trim!
This seems awesome. Very technical....will need to watch it again. Any chance you can show this on a chart..??
Thank you
Thanks!!! You can watch the live trading and see it live. I may look into a decided as well!!! Thanks for the feedback
Nice video. good job. I have a question. when we do build from inside, what if the price goest to a range market and takes both orders and continue ranging? what should we do then?
Great video. I like the trimming method, had not thought about that. It sure seems a lot of work though to try and get back to a smaller loss/small profit rather than having a tight stop loss and decent RR in each trade. What is your average monthly profit and RR using this method? cheers
Great question. I get around 3-5% return each month. I agree, if you could call the market correctly all the time, and only have an occasional loss. Traditional trading is the way to go. I am not that good at call the market. So, this allows me to NOT be correct. I just have to manage the hedge. And you are 100% correct, it is a lot of work!!!
Great video. Thanks for your really amazing information. Only one question , i am in the middle east and when you say 100,000 units or pips the only way it is in my understanding equal to 10 lot ?because I didn't understand the 100,000 .
Hey there. 100,000 units is equal to 1.0 lots
Great video series mate, looking forward to further videos.
Ive been using hedging in my trading instead of a stop loss for about 4 weeks now, but in a slightly different way.
I had a quick look on forex tester today on some old GU data using your approach, this was a buy trade, sell hedge was triggered, price kept dropping and every 40 pips I closed the hedge, trimmed the buy and reset the hedge, but tbh it just kept capitulating over several days, to the point where my original buy was down to micro-lots with big drawdown so couldnt really trim any more off, and not much inside opportunity, although im guessing there will be a way round this.
Would be good if you could elaborate more on the different scenarios that may play out, especially when your inside trade hedges are activated. Maybe even an FX Replay video showing the flow would be amazing.
Cheers mate 👍
I thought about this too. The thing is, I think if you use supply and demand or any strategy to be honest and only hedge losing trades,you would be in profit.i mean if the price tanked like that it showed that it was trending and you possibly had an entry in the direction it was going to...
I know some of my good supply and demand setups were killed by stop losses
Hey! I’m so excited you are diving into the strategy!!! Remember, you don’t have to trim at 40pips. That’s when I start to look for a trim. If the market is moving hard let it move. When it pulls back, don’t forget to squeeze it back as much as possible. Every pip counts on the squeeze. And finally, you don’t have to wait for the market to get exactly in the middle to trade from the inside. Once your lot size is down and you have margin you can open a trade anywhere in between the two outside positions. Good luck and keep me posted on your journey!
thanks for your videos. I have been a fan of Grid, hedge, and martingale for a decade and lost a lot in this so far. You have a genius idea but still need clarification on the edge of your strategy.
right on, hope this might help out!! Can you explain more on what you mean by "edge" of your strategy?
❤ I love this strategy
wahooo. thank you so much!!!
Amazing job! Finally someone covering hedging :) a video that covers managing multiple inside hedges would be awesome. What percentage of your account would you allocate to your opening position since you are essentially locking in drawdown?
Hey, great question. I think around 20% per side needs to be allocated. This may be different for everyone though. we all have different leverage. in the states I have 50:1 or 20:1 depending on the chain. that makes a big difference on how big your position can be
use 20 % lots left over just in case
Can you please clarify? If you are in USDCAD hedge are you saying you use 40% of your margin?
@@voodster yes. This is the cost of the position. The rest is for draw down and managing the hedge. Hope this helps to clay!!!
@@theforexhedge thx so much
Thanks!🤑
What an amazing strategy... I wish I could get a consultancy from you even if it is paid...😊
Thanks a lot Chad.
I've also been hedging and this looks great.
It's a great way to trade as long as you're not chasing gigantic profits. But now with prop firms, you can get big accounts and stick to making ~2% month low risk. Game changing! Slow and steady is the way.
I totally agree. Slow and steady!!!!
it's against the rules in most of prop firms
Hello. Thanks for the great video. May I ask which broker do you choose and what is your lot size. In my place there is only micro lot size, 1 pip equal 0.1 USD which makes the hedge strategy only available for account large enough like 1000$ or 10000$.
I use Oanda and I trade in units!!!!
@@theforexhedge oh. So the problem comes from my location. Thanks again.
Great job and videos... Awesome bro...
thank you!!! really appreciate it!
Hello Sir. I wish to thank you so much for this very interesting strategy. I was looking for a low risk hedging strategy for quite a long time but i found it today. Just one question.
What currency pairs you had the most success using this strategy?
Great question!!!! All of them work. But I have found the USD/CAD and the GBP/USD seem to be my favorite. I like a little faster movement. The EUR/USD works really well, it just moves less pips each day.
How do you trim the hedge and how do you also put some money in your pocket, where do you go to make these adjustments on your chart. I'm new to this style of trading
hi great video, im intrested
but i have some questions, let me ask the first one
at 7:37 of video
what if the sell stop when activated and it bouncing up and not going down like in the video you explained
what to do if it happens, thanks
at 10:02 it goes over this. But basically just trim, squeeze and work the hedge from the other direction. Hope this helps
@@theforexhedge no i ask something else as you said at 10:00 (if you do not pick up your stop sell at the bottom that's when we squeeze)
im asking if we picked up the stop sell and price go up then what should we do i dont see you talk about that in the video ?
ahhh. Ok, this is easy. Just trade it from the other side. This is the best part about hedging, you can work it from either side. So if it picks up your hedge and immediately turns on you you can trim from the other side if it gets in the money. this happened to me in this video. ruclips.net/video/fj1LHNq943k/видео.htmlsi=ELebLknM2WEa5iUb @@secretsmile9219
Hi, really enjoyed this video. I am thinking of implementing this strategy. Just want your guidance on sizing. If you have a £30k account , what would your initial size be on a trade and what was the worst drawdown % of your total account size you have experienced? Have you ever blown an account using this system before mastering it? Thanks
In one of the comments, you talked about sharing this XLS calculator... Is there a way to get that...
I have a doubt, what UD un 13:04 we do picje up the hedge? What would be the way of managing?
Would this work
with synthetics ? I doubt it since the synthetic market is a computer generated market which I think is manipulated despite all that they say .
Hi thanks for the great and concise videos. Not to long videos works great and you are clean in explanations thanks. I have 2 questions if I may.
1- I was wondering if you ever tried not to close the hedged position when you reach the TP area, but let it run and still trim the value of the outside hedge as it goes in favor, only close if it starts to reverse?
2 - Why do you reopen at a 30 pip distance from previous position, why not closer or even at the closing price from the top ?
Hey. Great questions!!!!
1-I will let the position work beyond 40 pips if it’s moving. But I never trim without closing. This is a hard rule for me.
2-I always have a stop order in at 30pips. Closet thank 30 it seems to be to right and gets picked up to fast. I don’t want it at the closing price because I want to squeeze as much as I can. Hope this helps!!!
@@theforexhedge thanks for the feedback. I havent seen all the videos im still trying to fully understand the hedging from the inside, sometimes i get a bit lost with the meaning of the terms because english is not my language . I like these videos better then Nick Shawn, keeping them short is key. Thanks
Thank you!! I agree, shorter videos for the win!!! here is a "longer video" on working the inside. you dont have to watch the whole thing, but it may help you understand working the inside!! ruclips.net/video/IlFnjHJRCOo/видео.html
Really great explanation and the way to trim. Can I get the working excel sheet
Thanks found in the description 😂
Hi, nice video i just have a doubt , is it posible to do this in Perpetual Futures in cryptos? the problem or maybe i havent found how, its that there is only 1 long and 1 short. Prices are averaged
I have to watch this again.
awesome!!! let me know how it goes!
You are a Genius
oh wow.....you totally made my day. Thanks for the kind words!!!!
Hayy my question is wich broker give a facility to trade in forex with Unit position size
And wich broker you use plz clear my doubt
Can you put a link to the excel calculator for lot sizing. Appreciated
This is a good idea. Keep posted, I am working on a way to share it.
Thanks much appreciated
Thank you very much for your valuable information. Quick question, can i still make money if i don't trade from the inside and I only focus only trimming?
Yes. But eventually your trims will become very small.
Say you get hedged again on an inside trade. Do you follow the same trimming steps every 40 pips? At what point do I open another inside or close the basket of trades?
Great question. Yes, you follow the same steps trimming at 40 pips or more. I just made a video on how to work from the inside. Should be up later tonight!!!
I see your video. It's very impressive, COngrats. But whats your strategy if the price, after reaching the first step (100 units long, 100 units short, so full hedging), go long upon the buy? Thank you
Hey, Great question!!! The strategy is the same...Trim, Squeeze and finally trade from the inside. This video might help to clarify that. ruclips.net/video/IlFnjHJRCOo/видео.html
Hayy my question is wich broker give a facility to trade in forex with Unit position size
And wich broker you use plz clear my doubt🙏🙏🙏
Thanks much for sharing your method, I have learned much from your videos! Any thoughts on daily financing when positions are held past 5pm EST and how this works in your trading and strategy? EDIT: Looks like trading the Loonie you pay a bit on either side (I read it incorrectly the first time).
I do pay some swaps. But taking profits along the way more than offset swaps!!
Hello, when doing the calculations, do you include the amount of losing swap ? thank you@@theforexhedge
Very Useful Video .Thanks for sharing. Im going to watch this many times as its still a little unclear at the moment. However I can see the value of hedging.
Good luck. Can’t wait to hear how your journey progresses!!
Good morning !
I have watched this video several times and have tried to do the calculations myself as the video progressed, and finally I understand every bit of your strategy, along with how much risk is involved , etc... and after all of that I still think this is an unreal strategy lol!!!
Now,
I know that you have gone a long way to find out the best combination of the elements in your strategy, meaning, trading specifically the USDCAD, leaving 30 pips buffer zone before you hedge, risking $10 per pip, keeping the buy and sell orders balanced all the time, banking only 1/1000 of the winning position and applying the rest to reduce risk, reducing the outer positions first... etc...
Having said all this, have you done the exercise of not leaving the 30 pip buffer to wait for entry, but instead entering immediately after you close the winning position? .... this will eliminate the squeezing and will give you more "hedge trims" which is what ultimately makes you money.
I would love to hear your thoughts on that.
Thanks again for sharing your experience.
TZ.
yes, I have done it immediately and had a buffer up to 30 pips. I have started using a 20 pip hedge. I think this totally up to you!
Thank you for your response 🙏🏻
Were you able to reach to the conclusion which one option makes the most money?
Trims I think are important to catch such pull backs. Remember it's aim is to reduce the hedge gap
vary similar to what i was doing ...but i had no history or guidance so i cut the experiment short but i have to say that its a great cash flow solution ...because your making cash as you wait for the trend to change in your favor... so if i made 4000 and was losing 4700 ...not so bad as its a matter of time before it goes my way ....HIT and MISS BABY HIT AND MISS sometimes we get a hit
Yea. Exactly!!! Great way to look at it!!
I am wondering why you prefer USD/CAD instead of GBP/USD even though GU moves pretty fast. Do you prefer range bound pairs like EUR/GBP, AUD/NZD or high volatile like GBP/JPY which most often moves 1000 pips without retracement.
Great question. I don’t generally trade the cable (GBP/USD) because it’s 20:1 leverage. That just stinks!!! The CAD moves and I like big moves! I’m playing with the GBP/JPY, no reason not to trade it. I just like the CAD. after a while trading the same chain, I think it’s easy to get comfortable with it.
@@theforexhedge if using like 30:1 leverage do we just need to use more of our account size for operating costs?
awesome strategy, i like the fact that statistically 50% of my trades can win clean, and the losers can be hedged back to BE or profit. Thanks
Just question. What if the price touches the stop order so the order is executed and then goes opposite? And if this happens on every stop order several times either inside the hedge or outside the hedge, it seems to exceed the margin and also blow your account. Never easy to exit. You can earn little like that but just 1 loss will be huge.
This is a great video - I’ve just signed up to a hedging strategy course but find your explanations really easy to follow and reinforce my current knowledge. Great content. Can I ask what your name is??? Thanks
Right on. Good luck on your journey, I’m grateful to play a part. My name is Chad. ;)
Hi do you close the buy position
How is possible to close a part of a position? For example halving the original position or like in this video close 61% of initial trade?
Great video! I'm now trying this in a demo account for the first time, and have just completed my first trim. Could you please make a video that talks about how you chose 30 pips as the entry distance for the hedge and 40 pips as the target profit, and also maybe some basic fundamentals like sensible capital amounts for the volumes used and typical returns to expect. Also, aside from getting the trim wrong (as in your other video), what other things can go wrong in the hedge that beginners should look out for? Thanks!
Hey Thanks!! appreciate the comment. the 30 pip hedge and 40 pip profit came from trial and error. Feel free to play with that on your own, make sure you find something that works for you. This is where I found the most success! As far as other traps and/or mistakes. Well, you saw it live and thats about the only one I have found. Capital is hard to recommend, so many variables. ie. leverage, where you live, what chain you are trading....etc.
@@theforexhedge Thats what I was wandering too. Just another question to ask is what forex pairs is that most effective with?
I prefer the EURO and the CAD. But I think you could use this on the pair of your choice...you just might have to adjust the 30/40 pip and/or your margin to work with that pair!!!@@chint8215
@@theforexhedge Thanks for sharing, only thing with hedging is when to call it quits!
I'd love to hear more of your thoughts on this. If managed correctly, why would you need to call it quits? If you have a scenario, or a timeframe on a market. Please share it with me, I'd love to backtest it. @@chint8215
Does this Excel work wit lots instead of units???
Hi again. Your technique is amazing . just asking what if there is original long position and the market goes down then the hedging short position start.. what if the market continues to drop down and down and down lets say up to 2000 points .. in this case i think there must be a solution in which we must do another hedging outside the original hedge.. do u agree?
Hey, Great Question!!! I answered it question in today's vid!!! ruclips.net/video/n-O4JZDRQpc/видео.html
Im finding swaps eating away at my account or maybe im just not winning enough? I feel like im always picking ip my hedge and waiting so long.
Is swaps really a concern?
Mantap sekali, sangat jelas bro...
Bikin vidio lainya seperti nick Shawn, dengan real chart kalo bisa sih setiap hari❤
Thanks a ton!!! I plan to make videos of live trades!!! Stay tuned!!
Hi there ,Im slowly understanding your strategy which is the best I've seen out there. Would there be any chance of sharing your excel calculator as Im having troubles working out how many units to trim and the conversions. I'll completely understand if you'd prefer to keep that private. Keep up the good work.
Thanks for the compliment. I hope the strategy helps you out a bunch. I'm going to look into how to share the calculator. I'll keep you posted on that. Seems like everyone could use it!!
Thank you , I'll stay tuned.@@theforexhedge
great..🍻
How do you avoid volatile moves that trigger your hedge and then pull back when you asleep?
I welcome volatile movement. It really does not matter the direction the market goes. Just go!!! Take some profits and trim the hedge!!!
In which pair this strategy will work
I remember you said monthly return is 5%. What is your initial lot size to begin with. For example if I have 10K usd account what will be initial lot size to target 5% return on investement.
There is no cut and dry answer for this. so many variables, where you live, what your leverage is, etc. I would just recommend starting over very small!!! you can always scale up
@@theforexhedge I agree but if I trade 0.1 lot (1:1) leverage on 10K account I am not going to get 3-5% returns. I am just trying to understand optimum size per account which you have tested for consistent 3-5% returns
I have 50:1 leverage trading with Oanda in the US. For a 10k account I personally would trade 100,000 units. And trim down from there. This is just how I do it with my leverage. Please, make sure you test this for you and all the variables in your situation. @@samirorange83
Is it possible to give an example on xauusd with lot size instead of quantity.
Hey there, I dont use lots, but the overall strategy would be the same. As far as the XAU, there is no difference between it or any other forex chain. Here is the video on the Trim the Hedge calculator. You can download the calculator in lots, and that might help you!!!
Just a clarification.......you need to do an outside trim first then you are able to do an inside hedge...?
yes, trim the hedge down to get margin back and then when you open a position on the inside you are not increasing your original risk exposure! Great question!!!
i suppose use broker with units (OANDA) and not fix lots mini lots to apply this strategy
Yes, I use Oanda with mini lots. Two separate accounts. One for long positions and one for short positions!
How did you do the calculation of first lot substation. You have made $730. You put $100 as profit. Then you give $630 back to the outside -$1030. How did you calculate the 1.0 lot to reduced to . Lot to close to be 0.6165？
What is the calculation and can we download the sheet
Hey great question!!! Check out this video. FOREX HEDGE CALCULATOR | Forex Hedging Strategy
ruclips.net/video/JEggTWy1lLk/видео.html
The links to download the spreadsheet are in the description!!
Hope it helps!!!
Can this method be used in any time frame, eg 5 minute charts. If so, would be safe to leave trades open overnight?
sure, it can be used on any time frame. I do leave positions open overnight, but there is some added risk for sure.
So my main issue is what do you do when you set a hedge order, and then the hedge just gets caught on a wick, and price starts going back towards the original entry? Just close in the middle for a small loss?
Hi, what a great video. I wonder if you can make it easier to understand by explaining it with "lots" instead of contracts. Thank you for acknowledging. Regards from Indonesia
I mean like standard lots 1.00, 2.00 and so on
I trade units live, so thats why i default to that. but, to give you a conversion. 100,000 units = 1.00 standard lot.
The strategy works on both, you just have a decimal in a different spot.. hope this helps!!!
interesting style of hedging, just a few questions: how long have you been using this strategy and how profitable have you been in total? thanks again for sharing!
Hey thanks for the comment. I’ve been using this strategy for a while now. I average 3-5% a month.
@theforexhedge thx for your reply, do you track your trades using online platforms such as myfxbook or fxblue? Would be nice to see how it would be viable for me too as I'm also someone who can't be on the screen monitoring my positions 24/7 hahah
Hi again. Can i use it for lesser time frames like 1 hour or 30 minutes?
yes! You can use any time frame you like.
Can you do a second video on trimming?
Hey there!!, Here is a live trade of me trimming. ruclips.net/video/tx1ByAwrZzQ/видео.html
Allow me to clarify traders who operate outside the USA, it is a completely constructive comment and I think it will help many traders. As far as I know, there is a big difference (or advantage) in hedging outside the USA (correct me if I'm wrong): I operate with an Australian broker with 1:500 and when opening two opposing positions in the same pair and same account , the margin returns to zero (free margin). If the price moves away, for example, 3k or 10kpips, I can continue to open new positions with the entire balance available (- the difference between the two positions which will be negative) to operate, that is, there is no blocked margin reducing my equity and % margin. In my case, it pays more to keep the positions open for as long as necessary until the price returns to breakeven and then make decisions (or close or manage price reversal). In the USA, I think there is no way to reset the margin by opening a contrarian position and then it makes a lot of sense to trim the lots that were left behind, in order to open up more margin for new operations. I hope this help some of you. By the way, thank you for your videos and attitude!
Same here
Which Australian broker offers 500:1 leverage?
Hedging is expensive on a 30:1 account.
@@Calagat icmarkets
I’m interested in this but have no understanding of what you mean by ‘trimming’ or ‘applying’.
Are you saying that by trimming you are just closing x amount of your open losing position?
And ‘applying’ makes absolutely no sense to me. Could anyone direct me to a video where they explain these terms and processes?
can we just using this concept of trimming and squeezin with the same lot ? so i dont need to do the calculation ? getting a bit confuse on it xD
fantastic
but where is the calculator ??
what about drawdown. could you stay below x% of drawdown
I try to trim as fast as possible, this keeps from having a "large" position eat up your margin. If hedged, you lock in a difference, once you close the position in profit and trim the position that is in a loss you reduce your position size and reduce your draw down. Hope this helps!!!
Is a stop sell the same as a sell limit entry? Can i hedge in America ?
A stop is not the same as a sell limit. A stop closes your position. A sell limit would open a short position. You can hedge in America. You just have to have two separate accounts. 1 account for long positions and 1 account for short positions.
They are practically the same my dear. Ask your self this question why are they called sell stop or sell limit instead why not called them sell pending order simple right?????? The primary reason is market markers gave this orders different names to enable them to balance there books there for sell stop mostly are stoploss for hedge long holders
And sell limit are take profit for hedge long holders. To simplify when market markers want to stop loss hunt will simply move the price towards the sell stop orders and avoid the limit orders.
I've always associated a stop loss as an order that closes out a position that is long or short. A Sell stop is an order below the market that would open a short position and a sell limit is an order above the current market price that would open a short position. A sell stop does not close out a position and a sell limit does not close out a position. You can have a sell stop order without have a long position. just my understanding........ Great conversation on the difference, cuz it is very confusing!!!
Also, a follow up question. Would it perhaps be more profitable to not get some profits along the way, but to use all of the hedge profits to close up the opened position in drawdown.
Here is my logic.
Say you have a long position that's in heavy drawdown of $3000 so you open hedges, squeeze them, work them, etc. And you keep exiting at profits on those hedges but you keep some money and you use the rest to close the drawdown. However, you increase the number of needed trades to close the drawdown because you aren't using all hedge profits to close it, so more trades requires more commissions, swap fees, etc.
On the other hand, if you used all of the hedge profits to close the drawdawn, you would get all of the profits anyway at the last hedge that has higher profits than what remains of the drawdown. For example, if you are $3000 in drawdawn and you close it with say 3 hedges. First hedge 1700, second 800, third 1000, totaling $3500. You anyway get all of the hedges profits above the initial drawdown value with less trades. I don't know if what I am saying makes sense. But, I would love to hear your thoughts!
Thanks!
Great question, I love that you're thinking of ways that you can apply it. I agree, you can wait and take profit later, or take some along the way. I prefer along the way. For one big reason, no pressure to get flat. Getting flat is not my goal.... If you have not watched this video it might help out on this concept... ruclips.net/video/IlFnjHJRCOo/видео.html
This method in the video is a safe net method. You keep getting small profits but u must get used to having negative balances running for a long time
Why don't you increase the lot size in Hedge account, so it will be covering first trade more strongly?
Thank you for your video... I am beginner... I am quite lost... may you recommend me a book or document to start learning hedging step by step? Thank you
Sorry. I don’t have a recommendation. This is my personal strategy that took me years to develop. I just decided it would be fun to share. Your welcome to watch these videos as many times as you want.
@@theforexhedge Thank you
Any chance to share that spreadsheet
Good video and thanks for sharing. What timeframe do you use for this?
Hey there!! I trade the 4 hour time frame.
@@theforexhedge ok awesome thanks man
@@Boostingcoach your welcome!!
Where can I get TTH spreadsheet?
Great strategy. What lot size would you suggest for $10000 account, 1:500 leverage and what pairs? Thanks in advance for your response
I would start small. I would also recommend using 1:50 leverage until you nail down how much margin you need. You can always size up once you get the hang of it!