Thursday, 26 July 2007
sleepless night
For some reason i couldnt sleep well last night. My 2 year old daughter was sick and kept appearning in my bedroom like a ghost to see what i was doing; to check i was sleeping. Perhaps i am developing an intuition: either way i checked in on the markets to see the huge drop in progress. wow!
When it is dropping in front of you, fast, with no end in sight, assuming your account allows it, place a short to cover your long positions. I place a short which covered my longs and a bit more for profit. These runs down generally last for a week at most, so you need to be able to lift that hedge pretty quickly also, so a trailing stop is not a bad idea here either.You dont need that hedge weighing you down like an anchor when the market turns back up.
I was thinking of doing this on the demo account, as a sort of demonstration; but felt that it was a form of interference that couldnt be guaranteed by someone else running the account, and so best so leave it alone, plus it will be good to answer the drawdown questions, which form the bulk of the carrygrid questions.
When it is dropping in front of you, fast, with no end in sight, assuming your account allows it, place a short to cover your long positions. I place a short which covered my longs and a bit more for profit. These runs down generally last for a week at most, so you need to be able to lift that hedge pretty quickly also, so a trailing stop is not a bad idea here either.You dont need that hedge weighing you down like an anchor when the market turns back up.
I was thinking of doing this on the demo account, as a sort of demonstration; but felt that it was a form of interference that couldnt be guaranteed by someone else running the account, and so best so leave it alone, plus it will be good to answer the drawdown questions, which form the bulk of the carrygrid questions.
Labels: hedging
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How would you manage the hedge? Would you place one short position that totals all your longs? And how long do you keep it on, when do you release it, etc?
# posted by 
: 26 July 2007 20:42
: 26 July 2007 20:42
Yes, one short to cover the total of all the longs, in the most prominent pair, which is gbpjpy in my case. I would keep it on, until i determined that the trend has turned back up. i would expect this to happen some time next week, and i will post when i think that point is reached.
Great thank you. I think we're going to have one terrific run as we move back up.
In the previous version, all trades could simply exit when the trend changed. Why not just stick with that and avoid the hedging altogether?
In the previous version, all trades could simply exit when the trend changed. Why not just stick with that and avoid the hedging altogether?
# posted by : 27 July 2007 12:32
: 27 July 2007 12:32
Yes, if you had your settings set that way it would have just closed all - i.e. CloseOnlyProfitableOnReverse = false. then even if there were some losers, and you got in late, you would take a small hit. i didnt have my settings set like this, so i hedged, and have made quite a bit on the short side for a change, but its time consuming, as you need to get that hedge off at just the right time.
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