Carry both long and short position over night

Just think it out...you will get it......forget the rules about offset.....why would anybody that trades multiple systems in the same instrument want to do this? Perhaps you want account statements to verify the system trades unique to the system being traded on one equity run. ......is the only reason I could think of the reasoning behind this stupid thread.

Michael B.
 
I totally disagree w/ the last post and do not think this is a worthless thread!! Traders think in terms of strategies. These strategies can have different time frames and traders want to stick to the rules of each strategy.

Thus, suppose in a long swing trade a trader has accumulated a significant profit and price has become extended from the daily 20sma. The market opens up one morning down and sets up for intraday scalp shorts. The trader finds that his swing stock is the best short candidate because he did such a great job picking it as a long in the first place. In my mind he should be able to short!

Why should the trader have to exit his longer term play (for which he expects the pullback not to challenge his swing stop)? Now he can't enter a setup on a shorter time frame strategy because of these useless rules.

He should also be able to use offsets to manage his risk! Yes I know there are other ways to do this (options, other sector stocks, etc), but why shouldn't this be available as well? No good reason!
 
Buy and hold qqq's long term and sell NQ short term. Whenever you buy (offset) NQ your net position is long qqq's. Suggestion is to pay full price for qqq position.

It takes quite a bit of money but it can be and is being done all the time.
 
I understand the logic, but if you are long one contract in your long term system, and you buy one contract in your short term system, you have, in effect, closed out your position, and are net flat. It's not a matter of whether you want to close it out or not, whether it is in one or two accounts, you have done so regardless, as far as your net equity and trading results reflect. If you want to trade the two systems together, that's fine and you can do it, but you also have to manage using net position instead of each separately to do it. That is commonly done by multiple strategy firms, who have to do risk management on an overall basis. You can be trading 100 different systems, but can still be net flat, or net long, or net short, and that is what your results will reflect.
Jessie
 
don't embarass yourself.......you will get it......read this later.....do the math the long way......the end of the road leads you to the same place....but read this later after you think it out...

Michael B.
 
your methodology is flawed.....you are not thinking correctly...In your example take profits on the swing and reverse with the short term......always put money in your pocket first with opposing positions on the same instrument...ok?

Michael B.
 
A few things:

1. If you're new to futures, they don't work like stocks...you don't have a "Sell" and "Sell Short" option. It's just "Sell"...so you you either "Sell" your long, or you "Sell" to get short. Therefore, like everyone else has posted, you will be net flat if one system is short and the other is long. You can't be "short" here and "long" there on the same contract. It's not like boxing up a trade in equities.

2. Just trade the net of your positions. If you're not lazy...track each system independently in Excel. Record your entry price, and signal entry price...it shouldn't be hard to do.

I trade 5 systems simultaneously on the ES from a TS account and have no problem. Simple math let's me know how many contracts I'm supposed to be long or short....

Good luck!
 
There are definitely reasons why one would want to "offset" their longer term position by going short in a SEPARATE account. Clearly, you cannot do this in the same account because the software is not going to differentiate between opening and closing existing positions. So you need a second account to do this. This technique is nothing new, it is used all the time by fund managers as a means to reduce open equity giveback or drawdown on existing profits without the hassle of assuming initial entry risk. For the size these guys trade, its not always easy for them to re-enter with trend after there is some sort of climatic move in their favor. So, perhaps these are times where they will offset in the second account...

Perhaps, another way to think of this is via options. Think in terms of vertical spreads or ratio spreads. Yes, for all practical purposes you are going flat, but you are also locking in open profits. Its basically like trading into a vertical spread(nevermind the Greeks for a moment) but doing it as a debit for credit...
 
There are reasons to do this with equities, (having to do with shorting rules, cap gains, etc.) but with futures, if you offset in a second account to reduce re-entry or exit risk in the first, all you have done is shift exactly the same risk to the second account (plus additional costs), as you have just established a new (albeit opposite) position, that will also have to be unwound with costs & slippage. You will also have significant additional costs of carry, as you now require margin funds equal to twice your initial position, whereas if you traded net position in one account, you would now be net flat and have NO margin requirement. Fund managers will trade multiple accounts, as you said, but they are generally doing so solely via ledger balance (to avoid the cost of carry for two positions that net flat, which will almost always exceed the slippage in getting in and out), and also always trade net position for risk management purposes when doing so.
Jessie
 
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