Interactive Brokers Hedging

[Zzzz1]

Disagree here. While your generosity to the iq of OP is noted, that is not how he/she described his issue. It is apparent that he/she does not understand that being long and short an identical contract at time t0 and offsetting either of the two at t1 is inferior to simply waiting and only trading one side at t1.

An algorithmic strategy architecture keeps track of all positions pertaining to individual strategies (via tagging) but still nets out exposure across all strategies. In fact, a smart architecture will internally net out opposing orders and allocate a synthetic position to each strategy rather than send out 2 otherwise identical orders of opposing direction.

OK, I think the OP's got the message. He may have some specific requirement that we've overlooked, like taking long and short positions for the same instrument in multiple time-series...in which case, his entry/exit logic and net long/short position will be managed by the trading system.

 

[HappyTrader]

Man that's utter bullshit, it's the same as just pretending you're long and short in your head and when you see the market go up you pretend you close your imaginary short and actually go long, you've just saved double commission as @lovethetrade mentioned

I agree that it does not make a lot of sense (as opposed to holding both, just wait till you see the direction then jump in would make more sense).

However, I have seen people think this is viable and perhaps that is what he is seeking.

 

[Zzzz1]

But just because some people think it is viable does not make it viable, correct? I cannot even believe that some US regulated fx brokers were at some point in time allowed to shill this stupid approach to clients. I guess one should not be surprised about anything in this sector.

I agree that it does not make a lot of sense (as opposed to holding both, just wait till you see the direction then jump in would make more sense).

However, I have seen people think this is viable and perhaps that is what he is seeking.

 

[stevegee58]

Hedging in FX accounts is a common pitfall you see all the time in the Forex message boards.
Every noob with an MT4 demo account thinks he's genius coming up with the same ideas that thousands of others before him did e.g. hedging.

 

[lovethetrade]

Disagree here. While your generosity to the iq of OP is noted, that is not how he/she described his issue. It is apparent that he/she does not understand that being long and short an identical contract at time t0 and offsetting either of the two at t1 is inferior to simply waiting and only trading one side at t1.

Fair enough but no point alienating people that are still learning what everyone has to learn. Maybe that's why I gave him/her the benefit of the doubt. We want people to feel comfortable participating in the forums, not crucify them for getting something wrong.

An algorithmic strategy architecture keeps track of all positions pertaining to individual strategies (via tagging) but still nets out exposure across all strategies. In fact, a smart architecture will internally net out opposing orders and allocate a synthetic position to each strategy rather than send out 2 otherwise identical orders of opposing direction.

Spot on, good answer.

 

[Zzzz1]

re your first comment, don't you think it is fair to demand some balance? Is it too much to expect for someone wanting to invest serious funds and potentially make a living in this business to put in a certain minimum amount of effort? 5-10 minutes of thought process with a pen and paper should convince anyone with half a brain that hedging an equal long and short is absolute nonsense. Maybe not putting in a minimum bottom in the barrel in terms of intellect will invite more onto forums like this but it surely puts off anyone who puts in the work and efforts. It has become incredibly rare to come across a single post in a given day where I would say "wow, I learned something new that I find of value". It has become frustrating to have to sift through so much low quality content just to find the occasional gem. Should there not be some balance and minimum standard?

Fair enough but no point alienating people that are still learning what everyone one has to learn. Maybe that's why I gave him/her the benefit of the doubt. We want people to feel comfortable participating in the forums, not crucify them for getting something wrong.



Spot on, good answer.

 

[lovethetrade]

re your first comment, don't you think it is fair to demand some balance? Is it too much to expect for someone wanting to invest serious funds and potentially make a living in this business to put in a certain minimum amount of effort? 5-10 minutes of thought process with a pen and paper should convince anyone with half a brain that hedging an equal long and short is absolute nonsense.

...and the crucifixion continues lmao

Not everything in life has to be performance orientated. That desensitizes people and can be the cause of a lot of problems. If you want constant performance, get a group of like-minded people together and go hardcore with some venture, dont expect a consistent flow of stimulating commentary via a forum. Take the good with the bad.

 

[stevegee58]

Bah. Mister Market will hurt OP's feelings worse than anyone here.

 

[Zzzz1]

...but trading is. I do not remember that ET defines itself as a beginner's forum, only. It is an open forum for people of varying degrees of experience and skill set. It caters to beginners, but also is supposed to provide a place to exchange ideas and thoughts for more experienced people. Having said that, I believe it is not too much to ask for everyone to put in a minimum effort. Unless you want to sink to the very bottom. I find it outright ridiculous that nowadays those who demand higher standards are shot down while the dumbest of the dumb thought processes are promoted and touched with white gloves. Goodness.

You seemingly disagree and I am ok with that. You should maybe consider to be good with my approach as well.

Not everything in life has to be performance orientated

 

[lovethetrade]

You seemingly disagree and I am ok with that. You should maybe consider to be good with my approach as well.

On that note, we will leave it there. Good discussion.