fxsol vs oanda

MidKnight · Mar 26, 2005

Quote from ElectricSavant:

I hedge to capture volatility in both directions and to earn interest on the carry....

Mechanically it sort of automates this...before, I did not understand why anybody would want to hedge....but after finding a method (not mine) and trading it, I see the light...

There are many logical arguments against hedging, and I have been on the other side debating them...But I have found a valid use for hedging from one of these boards in Spot Forex Trading. If the shoe fits wear it. If you can find a style that works for you...trade it! In the long run it will be more efficient to find your style and grow from there.

Michael B.

Hi Michael,

I'm interested to know what it is that has made you see the light and also, how bright is the light?

Any references would be warmly welcomed.

MK

techiecool · Mar 26, 2005

Quote from MidKnight:

The ability to hedge by going both long and short on the same pair is just a way for them to make more money. An IB rep wrote this and it makes sense to me. He said psychology traders feel they are better off doing the hedge rather then getting out of a position because they hate to be wrong. It is a win for the broker because they get more transactions out of you. Think about why you really want this hedge - you are probably better off exiting and then re-entering.

MK

MK,
true it does have pyschological value, but i really think it has some true value when used at specific times. you are right, it does have to do with when you made a trade in the wrong direction and you can't always hedge that...sometimes you take the loss. but if you definitely see range trading and happened to step in on a wrong swing, then why not hedge take the profit in the opposite direction and then when the market improves in the other direction sell again. worst case if you hedge and hedge wrong (instead of exiting outright), you make pips that offset your lost pips and probably end up with the same net loss anyways. but by exiting you realized that loss.

but we all have different trading methodologies. if you are a long term investor, then hedging this way probably has little value. maybe my view of hedging is completely different than others...what am i new? actually yes

ElectricSavant · Mar 26, 2005

you can purchase up to 50:1 at Oanda, but the effective margin call is 100:1.

p.s. I have three computers dual monitors laptop and wireless...

Quote from techiecool:

ElectricSavant,
the two pc setup isn't hard...i'm a programmer and have 5 machines in my house. 3 in my soho. java programming, how/why do you need to use that?

my concern w/ 2 oanda accounts is that i will be using 2x the margin whereas when hedging is offered you don't need the extra margin. otherwise, it seems fine. i'm also a little worried about the 50:1 leverage oanda offers, i've been trading 100:1 on most demos and feel i like it more.???

for me to hedge is simple, P/L is only realized when you buy/sell. but you can't hedge all the time...i guess each one has their own trading system.

techiecool · Mar 26, 2005

Quote from ElectricSavant:

you can purchase up to 50:1 at Oanda, but the effective margin call is 100:1.

p.s. I have three computers dual monitors laptop and wireless...

dual monitors for each...now i'm jealous.

regarding the leverage/margin at oanda...for some reason i seem to not quite get it.

let's assume 20,000 units
50:1 purchase ----> $400
100:1 margin call ----> $200

ElectricSavant · Mar 26, 2005

Well no,

1 laptop w/wireless card no external monitor
1 laptop w/hard wire card no external monitor
1 desktop w/hard wire card with two 21" sony's.

This is all in one network..(when I traded full time I had more and two networks, one dsl and one cable).

If you have $800.00 you can purchase up to $400.00 and then you can't purchase anymore...but you are not called until your down $800.00 and lose it all (on major pairs).

Quote from techiecool:

dual monitors for each...now i'm jealous.

regarding the leverage/margin at oanda...for some reason i seem to not quite get it.

let's assume 20,000 units
50:1 purchase ----> $400
100:1 margin call ----> $200

ElectricSavant · Mar 26, 2005

There have been discussions on two other forums in three threads, about grid scalping.

I have found them rather enlightening and I have my ray bans on and I told Wifey to load up the truck that were movin' to beverleeee'...(sung in the tune of the Beverly Hillbillies theme song).

Michael B.

P.S. I only wish I wrote the system, but I cannot take credit for it. I do have my own tweaks though...

Quote from MidKnight:

Hi Michael,

I'm interested to know what it is that has made you see the light and also, how bright is the light?

Any references would be warmly welcomed.

MK

MrsSavant · Mar 26, 2005

Were not moving anywhere.

There goes Electric again with novice attributes. He works on systems for hours at a time, then wakes me up and tells me he struck oil...do you know how many times he has done this!

Novice! Sulong is correct, he turns full circle after two years of posting here...and STARTS over!

Wifey

TradingWise · Mar 27, 2005

Quote from techiecool:

MK,
true it does have pyschological value, but i really think it has some true value when used at specific times. you are right, it does have to do with when you made a trade in the wrong direction and you can't always hedge that...sometimes you take the loss. but if you definitely see range trading and happened to step in on a wrong swing, then why not hedge take the profit in the opposite direction and then when the market improves in the other direction sell again. worst case if you hedge and hedge wrong (instead of exiting outright), you make pips that offset your lost pips and probably end up with the same net loss anyways. but by exiting you realized that loss.

but we all have different trading methodologies. if you are a long term investor, then hedging this way probably has little value. maybe my view of hedging is completely different than others...what am i new? actually yes

This makes no sense at all. If you believe your position is going the wrong way on your timeframe, you should EXIT the position and trade the other side.

Please reread your post, it's really wrong to trade like this.

Hedging could be of use when trading different timeframes, but for that, multiple subaccounts can be used.

let's assume 20,000 units
50:1 purchase ----> $400
100:1 margin call ----> $200

Yes, this is correct. $400 to initiate the position and a margin call when your NAV is below $200.

Lon Eagle · Mar 27, 2005

Quote from Baruch:

Well, it's not good if your broker loses money if you win and earn money if you lose.

This isnt true though. Say you get a 2 pips spread on euro dollar - most brokers will either be getting hit on their side of the spread or could hedge it with a bank, who typically quote 1 pip spreads. Therefore you can both win.

Baruch · Mar 27, 2005

Quote from Lon Eagle:

This isnt true though. Say you get a 2 pips spread on euro dollar - most brokers will either be getting hit on their side of the spread or could hedge it with a bank, who typically quote 1 pip spreads. Therefore you can both win.

Yes, that why I wrote IF...
But a bucketshop can't, because they don't hedge, because they count on that their customers lose.