Hedging Only

[afelipe86]

I know some people who trade FX that hedge every now and then.
But I was wondering if you can make a living by only hedging all the time.

Right now I'm on a demo account, but I've been hedging for the last couple of hours and have pulled in a pretty good return (attached pic).

Whats the major drawback of hedging?...it just seems too easy, like everyone should be doing it all the time!

 

[psytrade]

put it this way- if someone is able to make money going with the trend or against the trend, then someone is probably losing by doing neither. That should answer your questions - yes, but with risk of course.

 

[Nashequilibrium]

lol.....the drawback is that you will only find out that u are wrong once you have tried it on live trading. To save you money, don't waste your time!

 

[dealmaker]

You definitely can make $ and be hedged. How you hedge is the key i.e. options, stocks etc.. One popular strategy is pair trading which is what the forex guys do. You will need multiple positions for this strategy to be profitable. Goodluck.

 

[afelipe86]

Quote from Nashequilibrium:

lol.....the drawback is that you will only find out that u are wrong once you have tried it on live trading. To save you money, don't waste your time!

Well, I guess we'll see on Monday. My live account is now setup, and I will start trading live next week.

As for my demo account, its only been two days and I now have $2100 with a beginning balance of $1000.

 

[afelipe86]

Quote from dealmaker:

One popular strategy is pair trading which is what the forex guys do. You will need multiple positions for this strategy to be profitable.

This is exactly what I'm doing...sorry I should have been more specific.

 

[Sandybestdog]

OK Call me dumb, but I'm not getting what's being traded here. What do you mean by making money from hedging? I understand pairs trading, but I'm not getting what you're doing. Please explain. Thanks

 

[afelipe86]

I'm completely new to trading and after doing some research, I found out that what I'm doing is possibly banned:

http://www.elitetrader.com/vb/showthread.php?threadid=97890&perpage=1&pagenumber=569


I was instantaneously executing a buy and sell order of the same currency pair.

Has this been banned?

I'll have to look into it more, but I think I have a way around this....

 

[total_keops]

Quote from afelipe86:

I'm completely new to trading and after doing some research, I found out that what I'm doing is possibly banned:

http://www.elitetrader.com/vb/showthread.php?threadid=97890&perpage=1&pagenumber=569


I was instantaneously executing a buy and sell order of the same currency pair.

Has this been banned?

I'll have to look into it more, but I think I have a way around this....

The NFA is a USA thing. You could just get of of the country and be fine. Also, it's national futures association and as long as I know forex is unregulated (I can be wrong on this).
You could just open another account and be fine.
Many of us are in search of the holy grail, hopefully you get it but the odds are against you

 

[afelipe86]

Quote from total_keops:

The NFA is a USA thing. You could just get of of the country and be fine. Also, it's national futures association and as long as I know forex is unregulated (I can be wrong on this).
You could just open another account and be fine.
Many of us are in search of the holy grail, hopefully you get it but the odds are against you

Thank you very much for your comment. I also came to the same points as you did (about NFA and FX). Right now I'm using FxPro (as a demo), but it kinda makes me nervous since its in Cyprus. I dunno, maybe I got nothing to worry about.

Oh I don't think this is the holy grail, but maybe a nice way to get some pocket change. And I think this method has been used for years...right?