Hedging on position & swing trades

J

JT47319

Just wondering, but does anyone ever try hedging their longer term e-mini positions with another position in a similarly related e-mini?

For example, going long 10 contracts in NQ, but only short a couple in FE? Or short ES with a small long position in ER?

Obviously this isn't for intraday scalping, but if one had a position that they wanted to crash-proof. Not an exact 1:1 hedge, just sacrificing some potential upside, to be sure you aren't hit by the mother of all crashes/rallies.

I've been stepping away from my typical intraday scalping and taking up more swing plays lately.
 
Quote from JT47319:

Just wondering, but does anyone ever try hedging their longer term e-mini positions with another position in a similarly related e-mini?

For example, going long 10 contracts in NQ, but only short a couple in FE? Or short ES with a small long position in ER?

Obviously this isn't for intraday scalping, but if one had a position that they wanted to crash-proof. Not an exact 1:1 hedge, just sacrificing some potential upside, to be sure you aren't hit by the mother of all crashes/rallies.

I've been stepping away from my typical intraday scalping and taking up more swing plays lately.
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If I understand you correctly you are talking about straight hedging a position and not playing the spread?

I have looked into this quite a bit, in the end what I found, to use your above example, is just go long 8 NQ rather than 10 NQ. I believe the only thing hedging offers is a false sense of security. You would open up a Pandoras box of problems, including legging out at just he wrong time etc...

Unless you play the spread which I believe what spreadem does ES vs YM, you have to worry about the spread going against you in 10 NQ and short 2 ER etc.

Mother of all crashes/rallies is a day trader fallacy, if you swing trade using a consistent system, sure you may have those days when you're short and dow opens up 70 points higher, but in the long run this will even out. There will be days when you're short and dow opens down 20-30 points. Trading small, position sizing have to be looked at.

I think you're moving in the right direction getting away from scalping. If you swing trade 3-4 mkts t-notes, gold, crude oil etc you will be OK.
 
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