trading futures

cvds16 · Feb 1, 2017

you'd better ask yourself: 'what can go right with this strategy' ?
it's not a strategy; it's just people (beginners) fooling themselves ...

Mdtbyk · Feb 1, 2017

cvds16 said:
you'd better ask yourself: 'what can go right with this strategy' ?
it's not a strategy; it's just people (beginners) fooling themselves ...

thanks i am a beginner

and thats why i am asking why is not right to do it, and why is it fooling myself? i don't have the expirence thats why am asking you guys to learn thanks

cvds16 · Feb 1, 2017

I you hedge a position (like described in forex) you don't really have a position: you are flat so you can't make money unless you 'unhedge' the position ... it just makes no sense, you might as well close your position and initiate a new position later ...

Mdtbyk · Feb 1, 2017

cvds16 said:
I you hedge a position (like described in forex) you don't really have a position: you are flat so you can't make money unless you 'unhedge' the position ... it just makes no sense, you might as well close your position and initiate a new position later ...

thanks

Trader13 · Feb 1, 2017

Mdtbyk said:
Hello
i am wondering if its a good strategy if i think that the markets are going long and i buy a long position and at a certain point if the trend is going against me i will hedge it with the same contract and sell it meaning i do understand that I'm technically flat cause I'm selling and buying at the same time but with market volatility they might be profitable and if not i lose on one one of them at pre decided levels with losses that are not more then 2% of my portfolio what can go wrong in such a trading style ?
thanks

The biggest problem with this approach is that you won't react quickly enough to open a new hedge (in your example, going short a contract) in a fast moving or gapping market. You need to have your hedge solution already in place as part of your opening position. Of course, this approach has challenges of its own, but that's what makes trading not-so-easy.

Mdtbyk · Feb 2, 2017

Trader13 said:
The biggest problem with this approach is that you won't react quickly enough to open a new hedge (in your example, going short a contract) in a fast moving or gapping market. You need to have your hedge solution already in place as part of your opening position. Of course, this approach has challenges of its own, but that's what makes trading not-so-easy.

thats exactly what I'm looking for! so it won't help to place orders and stop losses on the positions that i have open ? that in case of gap or moving fast markets? but if you trade the es that are very volume that is not a problem no?

MarkGroes · Feb 2, 2017

Mdtbyk,
Your strategy sounds good enough! What is a problem to test it on a short ES history?
If you are beginner in trading and can't write the EL code, try to go it on paper by hand.
It takes some time, but you'll really know "what can go wrong in such a trading style ?"

speedo · Feb 2, 2017

Begin with the understanding that losses are inevitable.

Trader13 · Feb 3, 2017

Mdtbyk said:
thats exactly what I'm looking for! so it won't help to place orders and stop losses on the positions that i have open ? that in case of gap or moving fast markets? but if you trade the es that are very volume that is not a problem no?

I'm not sure if I understand your reply. But if you're suggesting that the high volume in ES will ensure continuous pricing so that you get filled at your stop loss, that is not necessarily true. Slippage and price gaps occur in all markets. That's what makes options appealing, because they are anchored at their strike price. But protective put options are expensive, so that's the tradeoff.

bone · Feb 3, 2017

Mdtbyk said:
Hello
i am wondering if its a good strategy if i think that the markets are going long and i buy a long position and at a certain point if the trend is going against me i will hedge it with the same contract and sell it meaning i do understand that I'm technically flat cause I'm selling and buying at the same time but with market volatility they might be profitable and if not i lose on one one of them at pre decided levels with losses that are not more then 2% of my portfolio what can go wrong in such a trading style ?
thanks

Turning an outright flat price loser into a "hedged position" never works out from my experience. In fact, it usually makes things much worse - plus, you'll not only have to margin the original stinker, you'll have to margin the "hedge".