--------------------------------------------------------------------------------
I have been experimenting with a form of hedging (I think it is hedging) and so I am looking for some feedback. I have been doing it for a few weeks now with a lot of success. As always, I am sceptical of short term success. Here is how it goes:
Example: Use Metatrader because of "pending orders"
Best Case
Buy EUR/USD at say 1.3350 with a S/L of 30 pips so 1.3320. Set target of 3:1
Set up a pending order to Short if the pair drops to 1.3335 (-15 pips) with a S/L of 15 pips to 1.3350 but a target of 3:1.
The benifit is that if the "buy" trade goes against me, I risked 30 pips but it only cost 15 pips in value but I can make back that money when the Short continues downward.
You may have to give up a little in order to get the right trend and make the big trend.
I have had some great results with this catching a 93 pip JPY and 70 pip EUR during the night when I was sleeping and not watching my screen. In general, I have been only giving up 15 pips if I am wrong about the trend.
Worst Case
The trend may move into a horizontal channel and not trend up or down but stay in a narrow 50 pip range. In this case I would give up 15 pips for nothing if my "Long" trade drops to -15 pips and then goes back up and then reverses again and goes Short for another 30 pips. With this, I could potentially lose 45 pips on this day.
This has not happened to me yet but it eventually will I am sure. I did have a situation where I lost 30 pips but I was in front of the computer and I re-set the hedge and made the money back.
The good thing is that I use the xpMA, EMA Cross IND, MACD and the most important thing being the "Pending trades" function of the Metatrader platform.
Please, if anyone uses a similar set-up or would like to point out the pit-falls of this, I'd like to know because it is working very very well for me.
[get this widget]
March 13, 2013 at 2:47 AM
I am really impressed with your writing skills as well as with the layout on your blog.
Is this a paid theme or did you customize it
yourself? Either way keep up the nice quality writing, it's rare to see a great blog like this one today.
Feel free to visit my web site ... stock trading after hours