Why Hedging your positions ?

[spamme]

Experts makes huge profits by hedging their position and holding it for a long time. But this strategy is totally Not suitable for new traders who don't have enough experiences. Traders should understand this strategy properly to move towards it. xxxxxxx has removed all restrictions on trading techniques. So you can use Hedging Strategy with this broker so easily.

@tamzid92 stop spam threads. That show only how bad your broker is .... Good brokers do not need to spam .... ( Even if you write fake posts )

[Tony Darvall]

Hedging is useful when your short term view if different from your long term view.

You create real profits and losses with the hedges trades and there is a swap spread paid for the privilege.

If you find yourself hedging more than 20% of your trades you probably over-hedging.

If you can not close a trade that is going against you then a hedge is better than nothing.

New traders sometimes it the only way to stop a loss because psychologically it is much easier to do than closing.

Cheers

TA

[spamme]

Metatrader 4 is for broker not for traders
Brokers earn easy money on news traders ....

Yes thanks, I understand that. Thanks for your detailed explanation.

My point was much simpler though.
Why does the MT4 terminal show 2 open positions when in fact there are none?
Surely in the scenario mentioned it should just close out the long position when you take the equal and opposite short position.

[BillHuppert]

do you follow @BillHuppert ?

Yes thanks, I understand that. Thanks for your detailed explanation.

My point was much simpler though.
Why does the MT4 terminal show 2 open positions when in fact there are none?
Surely in the scenario mentioned it should just close out the long position when you take the equal and opposite short position.

[spamme]

Just to clarify. Are you stating that if, for example, I opened a long position in EURUSD for 1 lot, and then later opened 1 lot short, even though
MT4 will show two open trades, I am actually flat with my Broker?

*When you initiate a long position on the EUR/USD (let's say 1 standard 100K lot), this is what happens:
- You lend 130KUSD from your broker
-You buy 100K Euros for 130K USD (if EUR/USD trades at 1.3000).
-When you close your position (for example after EUR/USD rose to 1.4000), you sell back the 100K Euros for 140K USD and you make a 10K USD profit (=1000 pips) because you bought them at only 130K USD.

*When you initiate a short position on the EUR/USD (let's say 1 standard 100K lot), this is what happens:
-You lend 100K Euro's from your broker.
-You sell these 100K Euro's for let's say 130K USD (if EUR/USD trades at 1.3000).
-When you close your position (for example after EUR/USD fell to 1.2000), you buy back the 100K Euro's you bought at 130K USD for only 120K USD.
-The 100K Euro's you just bought back are returned to your broker and you make a 10K USD profit (=1000 pips) because you sold 100K Euro's for 130K USD and then bought them back for only 120K USD.

So if you now lets mix those 2 scenarios together
Open one buy at 1.30 and one sell - hedge - at 1.30 also
-You buy 100K Euros for 130K USD (if EUR/USD trades at 1.3000). ( Close this position at 1.30 will be "you sell back the 100K Euros for 130K USD" that exactly what a short is )
-You sell 100K Euro's for let's say 130K USD (if EUR/USD trades at 1.3000).

That means you are "flat" on the market do you follow @BillHuppert ?

[BillHuppert]

@Timo. If you are full hedged on one pair. lots Buy = lots Sell then there is no trades on the forex market.

Just to clarify. Are you stating that if, for example, I opened a long position in EURUSD for 1 lot, and then later opened 1 lot short, even though MT4 will show two open trades, I am actually flat with my Broker?

[spamme]

not really I trade at http://www.cfhclearing.com/ and my account is not small.

Good luck to you to

Uhm, okay.

I think it's safe to assume you are with a bucket shop broker that pays a positive swap when you hedge a position. Lollerskates.

Good luck with that!

[timo]

Hi,

I'm not here doing any advertisement of my broker so will not answer in forum.
My or other broker will have no trade on market when single trade hedge.

Ok I think my view about hedging is clear and I will not comment more about this.

Cheers ....

Uhm, okay.

I think it's safe to assume you are with a bucket shop broker that pays a positive swap when you hedge a position. Lollerskates.

Good luck with that!

[spamme]

Hi,

I'm not here doing any advertisement of my broker so will not answer in forum.
My or other broker will have no trade on market when single trade hedge.

Ok I think my view about hedging is clear and I will not comment more about this.

Cheers ....

@spamme - who is your broker?

[timo]

@spamme - who is your broker?

[spamme]

@Timo. If you are full hedged on one pair. lots Buy = lots Sell then there is no trades on the forex market.
So there is no swap.
I'm full time trader and on my broker I have 0 trades on the market - in the back office - if I put one full single pair hedge but metatrader show me 2 trades and swap are paid and charged.
What will then happens is that my BO is off sync with mt4 and when my account is flat the broker "sync" BO with MT4.
BO is what I have.
Mt4 do not show the reality.

This thread was a head up but if you do not believe me then fine for me

Have a nice Sunday

Of course, no hard feelings

But your statement above is incorrect. My example illustrated that perfectly.

Naturally YMMV with different brokers, but ICMarkets is a fair example.

[timo]

If you are full hedge then there is no trade on market and 0 swap should be paid.

Of course, no hard feelings

But your statement above is incorrect. My example illustrated that perfectly.

Naturally YMMV with different brokers, but ICMarkets is a fair example.

[Pianetti]

Hi,

I'm just telling my view and appreciate that we can talk about our views without hard feelings.


If you are full hedge then there is no trade on market and 0 swap should be paid.

Remember when you trade with leverage then some part of the swap is removed/added from/to you

Really interesting topic indeed.

[spamme]

Hi,

I'm just telling my view and appreciate that we can talk about our views without hard feelings.


If you are full hedge then there is no trade on market and 0 swap should be paid.

Remember when you trade with leverage then some part of the swap is removed/added from/to you

Orly?

Must be a magic broker then. On normal brokers you will still lose money daily on swap if you are fully Hedged.



ICMarkets USDCAD Swap rate as of 6 July 2014:

Long: -3.9
Short: 0.9

So even you are hedged fully, you still pay a net swap rate of -3 pips daily. Hardly a money making activity.

If it were that easy everyone would be opening 100 lots fully hedged and making killer swap profits

[timo]

You will earn money because you will not be charged for the swap....

Orly?

Must be a magic broker then. On normal brokers you will still lose money daily on swap if you are fully Hedged.

ICMarkets USDCAD Swap rate as of 6 July 2014:

Long: -3.9
Short: 0.9

So even you are hedged fully, you still pay a net swap rate of -3 pips daily. Hardly a money making activity.

If it were that easy everyone would be opening 100 lots fully hedged and making killer swap profits