Is it legal to hedge in another account?
- Thread starter clambill
- Start date
Just open an offshore FX account. Pay the taxes and avoid making bad trades. "When the going gets tough the smart ones get out"
Akuma
Akuma
Yes it is dumb. Why not just enter one trade when the "price takes off in one direction"?
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I don't see any practical use to hedging.. unless you are using different strategies on different time-frames.. but that's another story.
hedging is only banned for retail traders. If you have your Series 3/CTA you can hedge.
Retail clients can still hedge on most American broker platforms. But this comes at the expense of a commission + spread, or margin requirements for the reverse position.
I know a few people who have accounts linked to ZuluTrade and are allowed to hedge. (spread+commission model).
If you signed up as a signal provider, and linked your account, you would also be getting a rebate on the commission charged by zulutrade.
hedging is only banned for retail traders. If you have your Series 3/CTA you can hedge.
Retail clients can still hedge on most American broker platforms. But this comes at the expense of a commission + spread, or margin requirements for the reverse position.
I know a few people who have accounts linked to ZuluTrade and are allowed to hedge. (spread+commission model).
If you signed up as a signal provider, and linked your account, you would also be getting a rebate on the commission charged by zulutrade.
Well, I was kind of thinking of it from a mathematical point of view. If you looked at it like a coin toss, let's say every once in a while you could have 10 consecutive losses. If you did only one trade per day, you could have 10 days of losses. I figured if I did two trades per day instead, then I'd only have...wait, it wouldn't be 5 days of losses, I don't know how to calculate the chances of being stopped out in both directions. Oh well, my forward testing will reveal how realistic this is I guess.
I understood hedging in a different way.
If you were not completely confident in your current trade, you would take a smaller position in an inversely correlated vehicle, (AUD/USD versus EUR/AUD for example). If you were wrong on your initial full-size position, your smaller 2nd would help to offset the loss.
If you were not completely confident in your current trade, you would take a smaller position in an inversely correlated vehicle, (AUD/USD versus EUR/AUD for example). If you were wrong on your initial full-size position, your smaller 2nd would help to offset the loss.
being long/short the same instrument is the same as being flat. There is nothing clever or useful about it (sort of what someone said above). Just be long, short, reduce/increase #positions or be flat when your methods so indicate
Quote from Buy1Sell2:
Not only is it illegal, it makes no sense. Thank you for your time.--Izzy
Are you kidding? If I was long in a GFT Forex account and short the same currency at DBFX, it would be illegal? How could anyone know I was long and short at the same time?
What in the world is the logic behind banning that anyway?
Quote from Buy1Sell2:
Not only is it illegal, it makes no sense. Thank you for your time.--Izzy
Moron.
Page 8, paragraph 2 (or 3 depending on how you count):
"The proposed rule would not prohibit customers from pursuing long and short-term strategies in separately margined accounts, and it is not clear that the benefits of maintaining a directional position justify the costs."
http://www.nfa.futures.org/news/PDF/CFTC/CR2_43_ForexPriceAdj_112408.pdf (proposed amendments as was implimented)
Key Phrase: separately managed accounts.
Which means if you have 2 accounts with the same broker, because they are margined separately it is allowed. If you have doubts, call your broker.
Now, as to why you would want to do go long and short...