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Testing a Hedging Strategy


winning11

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Hello. This is my journal of a test for a hedging strategy. This strategy was inspired by harvest from the MT5 forum.

 

The steps are listed below:

1. Make a hedge. (buy and sell)

2. Wait for the price to move.

3. Close a considerably profiting order.

4. Go back to step 1.

 

I will refine the strategy in the testing process.

 

Account information: Demo Account, $5000 fund, 1:500 leverage

 

Currency: GBPUSD

Spread: 3 pips.

 

First make a hedge

 

2011.07.14 5:08 BUY at 1.6156

2011.07.14 5.08 SELL at 1.6153

 

Balance 5000

Equity 4994

Margin 16.15

Free Margin 4977.85

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There has yet been a major price movement. We will wait patiently for such a movement. I will check my account anytime I feel convenient.

 

 

2011.07.15 14:02:18 '1363012': modify order #71387282 buy 1.00 GBPUSD at 1.6156 sl: 0.0000 tp: 0.0000 -> sl: 0.0000 tp: 1.6206

2011.07.15 14:03:19 '1363012': modify order #71387284 sell 1.00 GBPUSD at 1.6153 sl: 0.0000 tp: 0.0000 -> sl: 0.0000 tp: 1.6103

2011.07.15 14:07:34 '1363012': order was opened : #71548551 buy limit 1.00 GBPUSD at 1.6106 sl: 0.0000 tp: 0.0000

2011.07.15 14:09:38 '1363012': order was opened : #71548738 sell limit 1.00 GBPUSD at 1.6203 sl: 0.0000 tp: 0.0000

2011.07.15 14:12:35 '1363012': order was opened : #71548970 buy stop 1.00 GBPUSD at 1.6206 sl: 0.0000 tp: 0.0000

2011.07.15 14:12:55 '1363012': order was opened : #71548985 sell stop 1.00 GBPUSD at 1.6103 sl: 0.0000 tp: 0.0000

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Hello guys I'm back. Since it is weekend now and there is nothing really to do with forex training, I would explain a little bit of my method. The steps are describle below:

 

1. Make a hedge. (buy and sell)

2. Wait for the price to move.

3. Close a considerably profiting order.

4. Go back to step 1.

 

I am thinking of adding something new to it. I have attempted pending orders. Once the price moves 50 pips. The pending order opens a hedge and at the same time the profit is fixed as well, applying a T/P.

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  • 6 months later...

hedging strategy works best when the market is in side way.it means not bullish or bearish but just making zigzags and not yet decide wher to go.basicially it is going to hit all the targets within that range.so it is very good oppotunity for hedging.or other option is you really have to use stoploose when hedging couse if you will quit from earning side very early and do not use stoploose that will be very dangerious.

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  • 1 month later...

First of all I can't understand you way of thinking or special tricks. Because buy and sale are the only process which is done at foreign exchange. But I want to mansion the name of broker, because broker can only bring better rate (purchase or sale). Else we have to wait for a long time to become our expectable price. As per regular forex everybody should make transaction between USD,GBP & EURO - though sometimes use JPY, AUD,NZD,CAD. But sometimes we can see some rare currency's rate become too high.

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  • 4 months later...

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