Hedging idea for trading your own $

Surely that’s a loss isn’t it? Your euro originally cost you $1.28, they’re now worth $1.23. Apart from that there’s the loss of interest, Euro is at 2.75% and Dollar at 5.25%

Have I missed something obvious?

The real hedging which can make you money in forex would be as follows. The following strategy has the following characteristics:

a. There shouldn’t be a single loosing trade.

b. You should not need to watch charts, read economic news and analyze them, etc.

c. You need not use a stoploss.

d. Only keep taking profits, of approx 100 pips every day.

e. The strategy is so simple that a robot can easily be programmed which will place 30 buy and 30 sell pending orders at the same price at a distance of 100 pips. Next, it will keep sending pending orders which have been closed with a profit of 100 pips.

Long Term Hedging Strategy:

1. Findout a reasonable range of the pair you want to trade, say GBPUSD.

2. The top ever achieved by GBPUSD as far as I can see on my weekly chart is 1.9550, for safety we can take 2.000

3. The bottom achieved by GBPUSD during past 3 years is 1.7050, let’s say 1.7000.

4. Now, a safe range for hedging in GBPUSD is 3000 pips.

5. Since you will buy and sell after every 100 pips without a stoploss with a profit targedt of 100 pips, you should have enough equity in your account to run all 30 trades against you, each at the distance of 100 pips from Top to the Bottom. Now if you start off with 1 mni lot, you need $46,500 to use this strategy. And if you have $1.2M you can trade wit a lot size of 27 mini lots or 2.7 standard size lots.

6. If you keep trading this strategy you will definitely earn upto 51.5% of your equity per year, without increasing the trade size.

6. Say you are at the bottom of 1.7000, buy & Sell a lot at 1.7000, set the profit target of all trades 100 pips, because GBPUSD invariably moves more than 100 pips a day.

7. When the market moves to 1.7100, your long trade should be closed and once again 2 new pending orders will be activated, one buy and one sell.

8. Keep doing it and keep taking profits on your trades AND keep placing pending orders for the trades which have already been closed with 100 pips profit.

This strategy is based on the assumption that the market remains range bound 80% of the time and you will be making money during that time, but if the market starts to trend heavily, the best you can do is to stop placing counter trend trades and increase the size of your trades in the direction of the trend.

FxGenius,
I like your explained method. Do you actually trade that way?
I was thinking of the (3 year high – current price) / 200 = #minis to buy and (current price – 3 year low) / 200 = #minis to sell. Each time one is in profit by 200 = exit that mini and keep doing it until a fib pullback gives a net profit for the entire trade. I was looking to use GBP/US for the 200 pip moves and to time my entries during the beginning of a narrow BB.
Your method sounds better because i don’t have to buy and sell so many minis at the start.

FxGenius,

I think it is not clear to me the way you are actually doing. In step 6 your long is closed for TP 100 pips, but your short is still in place, when are you going to close that short ? If you open a new pair of trades at 1.7100 and you get TP at 1.7200, your first Short is -200 and the second -100, and you just have won only +200, so you are -100.

Please tell me if I’m wrong.

Elkin

I am also confused with that, I think we should double the lot size of 2nd short trade inorder to close 1st& 2nd short trades to be in profit, if we open 2nd short trade also with same lot then 0 profit from both short orders and we should set the TP is new short order to renaming all opened short orders to close all at a time with profit.

He also mentioned you need some huge capital inorder to trade based on this startefy, He told for 1 mini lot we need to have $46500 balance, now i am tarding with 0.01 lot with similar kind of strategy but there are some slight changes so $465 is enough according to his MM, but now i am maintaining $500 balance for 0.01 lot.

MY TP is 45 pips, i know its risky to have such kind of strategy but we may over come this risk if we use some good amount of capital, so that our account stay alive even after some good number of pi[s drop/ raise.

Now my EA ppened $1 lot trade because of the raise in GU yesterday, waiting for some retracement to close trade with ptofit.