Quote from edbar:
I have seen this method of trading before. We called it hedging.
[..]
It sounds complicated but it's not. However, it is near impossible if done manually. It's easy with an ATS and requires 2 accounts. I don't think it can be done with 1 account.
[...]
It certainly cannot hurt to simulate it a while see if it pans out.
Ed
"hedging" may be an appropriate name, as it conveys the idea of using one account to "protect" the other one, while attempting to pursue a profit...
A quick test on some past days on a few stocks/etfs "seems" to indicate that the "go Long signal" is more "reliable".
In other words, an intraday price change (like a 1% drop) and a (significant) reversal seems more reliable if used to make a long entry.
Besides, a much "stronger" signal seems needed for a short entry. (or vice versa in case of ultrashort etfs)
That is, there is no indication of any "simmetry".
Tommaso
PS
Some of you have pointed out some advantages of using a pair of accounts.
Another way I have seen using this device by (profitable) users of mine, in several customized variants, is along the following idea.
---
On one account you always either enter long or close.
On the other account you always either enter short or close.
Set up a strangle (before starting autotrading) and use appropriate position management.
---
These strategies (do not know how you call them) are generally not based on "signals" and therefore their robustness can be determined with high precision.
This is a powerful idea, if well implemented. Generates hundreds or thousands
dollars commission per day (to IB heart's content) but also large profits. (Clearly, requires large capital.)
_