Disliked{quote} I think this is exactly how the Institution position themselves. They break it down and hid their Buy orders in red candles and sell orders in green candles. Regards, FardeenIgnored
The orignal concept of my trading are based on hedging.
But not in pure form ,as I’ve modified it to my risk/rewards and styles.
In most of my trades I don’t use hedging techniques.
Sometimes, the system used are similar with what I think it's really the only way to be really successful without losing that much.
If we use the strategy right, we shouldn't really lose if you think about it.
We are doing the same thing that the big commercial traders do, which is called "circular trading."
A few big guys raise the market, & next session the next big commercial traders will come in & buy those positions.
These guys really can't lose & their profits are all off our backs.
To be smart, we need to trade like them.
Swing style with hedging is doing the same thing here.
If a trade goes against our orignal position, then have hedge about 40-60 pips below that will get triggered.
They will double the amount of lots on hedge position so that in order to make up the gap you only need it to go 20-30 pips into their hedge.
Once you "define" a reversal point & market heads towards your original position, cut the hedge & now we can employ another tactic called "double backing."
You can hedge long with gaining much more profit & once you get close to your original long position, you can either cut your orignal position or cut the (long) hedge & let it ride north for even more profit.
So you see, Professional Hedging traders is a smart money management method.
NOTE : There is a trader in this thread use hedging.
If used correctly, it can be used very successfully.
I would reccomend that to get a lot of experience using this method because it can also be somewhat dangerous if you don't know what the hell you are doing.
The key is "defining" where the reversal points are & market direction.
This is pivotal when knowing where to place a hedge & when to cut your hedge position.
So if applied correctly , hedging ( or some form of modification to it) has the ability to greatly reduce losses .
Instead of a stop loss , hedge the position .
Obviously this will not work as well in a trending market or if the prices are at historically high or low levels.
Avoid placing the order around pivots.
Perhaps place them just beyond support/resistance levels.
After all you want the pair to come around sooner rather than later.
This really appeals to me. We hate losses!
There will be times when a stop loss will be inevitable , but if you are able to sit at your computer and monitor the situation ,with some patience and no doubt practice , losses could and should be greatly reduced.
Hope this helps out a little....
PAT
I come from the future.
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