Hedging

saiki1122

Trader
Oct 19, 2015
5
0
7
33
hello everyone.how do the forex broker come to know we are hedging when we hedge using the second broker? i.e.buy at one broker and sell the same pair with other broker.(both brokers dont allow hedging).is there any possibility for a broker to come to know i am hedging? is there anything i should avoid when doing this? can i hedge like this?what are the difficulties i may face in doing this?thank you
 

Enivid

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Staff member
Nov 30, 2008
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There is no way of them knowing you are hedging unless the brokers are operated by the same company (e.g. one account at Forex.com and another one at City Index - both are operated by GAIN Capital). Otherwise, you are undetectable. The real problem, however, is the fact that you have to keep enough margin (and that's a lot!) in both brokers whereas if you would be hedging in one account, you wouldn't probably need margin at all.

What is the goal of holding those hedged positions? Interest rate arbitrage?
 
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eagle

Trader
May 21, 2015
103
1
9
Actually its not hedging if you buy in one broker and sell in another :) You are risking both of your accounts in this way. Hedging is buying and selling simultaneously in a single account.
 

saiki1122

Trader
Oct 19, 2015
5
0
7
33
Actually its not hedging if you buy in one broker and sell in another :) You are risking both of your accounts in this way. Hedging is buying and selling simultaneously in a single account.
hello.thanks eagle for your response.but i didnt get that.all though i am using two different accounts i still gain in one account and lose in another?this is what my basic statergy.gaining at one broker losing at other.what is the risks involved in this?.i am a complete newbie and i appreciate your help.thank you
 

Enivid

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Actually its not hedging if you buy in one broker and sell in another :) You are risking both of your accounts in this way. Hedging is buying and selling simultaneously in a single account.

Of course, it is hedging. It is not what most "Forex hedging strategies" are calling for, but that still falls under definition of financial hedging.
 
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radex78

Banned
Nov 15, 2015
676
17
54
45
Hedging strategy is we open two order with opposite order each other, if we open buy then we also open sell, and hedging used to manage the risk usually if trader open buy instant then also open pending order sell stop, if in fact both hit by price movement hence will become hegde position.
 

Lawrence

Active Trader
Aug 20, 2015
169
7
34
Hedging strategy is we open two order with opposite order each other, if we open buy then we also open sell, and hedging used to manage the risk usually if trader open buy instant then also open pending order sell stop, if in fact both hit by price movement hence will become hegde position.

There are many traders who are unable to make any income so they think of using the Hedging strategy for their trades. Here the main thing that i would like to say is that it is not at all easy to get income using this kind of trading strategy :)
 

radex78

Banned
Nov 15, 2015
676
17
54
45
There are many traders who are unable to make any income so they think of using the Hedging strategy for their trades. Here the main thing that i would like to say is that it is not at all easy to get income using this kind of trading strategy :)
Sometime I am ever trying use hedging strategy, and from three order i made two order getting loss more wider, so I am leaving this strategy and use general strategy with fixed stop loss and target profit, in my opinion hedging strategy more disadvantages because also will charged by spread fee on both position.
 

Lawrence

Active Trader
Aug 20, 2015
169
7
34
Sometime I am ever trying use hedging strategy, and from three order i made two order getting loss more wider, so I am leaving this strategy and use general strategy with fixed stop loss and target profit, in my opinion hedging strategy more disadvantages because also will charged by spread fee on both position.

For some traders using Hedge in their trading can become profitable but then they have to use it with care and only after they are having a good trading knowledge of how to place Hedged trades and how to manage them :)
 

radex78

Banned
Nov 15, 2015
676
17
54
45
For some traders using Hedge in their trading can become profitable but then they have to use it with care and only after they are having a good trading knowledge of how to place Hedged trades and how to manage them :)
Yes maybe some trader they still use hedging strategy to manage the risk, and for trader that have good experience and knowledge, with hedging might they can making loss position become profit position, but of course they must open lock hedging and trend market support order that still opened to obtained profit.
 

Lawrence

Active Trader
Aug 20, 2015
169
7
34
Yes maybe some trader they still use hedging strategy to manage the risk, and for trader that have good experience and knowledge, with hedging might they can making loss position become profit position, but of course they must open lock hedging and trend market support order that still opened to obtained profit.

We have to make use of such kind of trading strategy that is both Reliable as well as Time tested because in this manner we can get profits easily thru our trades :)
 

radex78

Banned
Nov 15, 2015
676
17
54
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We have to make use of such kind of trading strategy that is both Reliable as well as Time tested because in this manner we can get profits easily thru our trades :)
All strategy have goal to making profit, which wil depending with skil trader to analyze the market, hedging only one strategy to manage the risk and for expert, they might can trading well using this strategy, but sometime different trader also have different style to choose strategy.
 

ijak8510

Trader
Sep 29, 2015
83
6
19
36
Of course, it is hedging. It is not what most "Forex hedging strategies" are calling for, but that still falls under definition of financial hedging.
i heard rumors that actually, our trading logs are saved in Metaquotes server too, so brokers can match 2 diffrent orders , so if we open 1 lot EURUSD in broker A, and 1 lot EURUSD sell in broker B, brokers can match supicious order and put it in a group, and watch it carefully this 2 orders times, and closed times.
so this is why many bonueses brokers can say a trader do abusive trade with 2 account
 

radex78

Banned
Nov 15, 2015
676
17
54
45
i heard rumors that actually, our trading logs are saved in Metaquotes server too, so brokers can match 2 diffrent orders , so if we open 1 lot EURUSD in broker A, and 1 lot EURUSD sell in broker B, brokers can match supicious order and put it in a group, and watch it carefully this 2 orders times, and closed times.
so this is why many bonueses brokers can say a trader do abusive trade with 2 account
I don't know this matter, but indeed I am ever read such strategy which as trader open two account in different broker and use hedging to trade balance with take benefit from overnight interest rate.

Hedging as I know is open two order with opposite transaction which if one order with buy then to prevent loss due they faced with bad analysis then they also put pending order sell stop.
 

ijak8510

Trader
Sep 29, 2015
83
6
19
36
I don't know this matter, but indeed I am ever read such strategy which as trader open two account in different broker and use hedging to trade balance with take benefit from overnight interest rate.

Hedging as I know is open two order with opposite transaction which if one order with buy then to prevent loss due they faced with bad analysis then they also put pending order sell stop.
you mean a carry trade?well it is tricky. and carry trade always tricky
and even some of brokers like Tickmill allow carry trade,.

but it is rare to find free swap brokers happy if found a client open trades, only in one pair.and hold it for months.. and i understand why.
you deposit $10,000 in a free swap broker, hold 1 lot sell NZDUSD for months?compare with a client that deposit $1000 but can closed 1 lot in one month.lol
 

radex78

Banned
Nov 15, 2015
676
17
54
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ijak8510 yes it's very tricky, but so far I am never trying these trick in my trades , pure still trade with ordinary strategy with manual analysis, but seems will profitable although only small earning from interest rate,
 

SolomoNo9

Newbie
Jan 14, 2016
9
2
4
44
hello everyone.how do the forex broker come to know we are hedging when we hedge using the second broker? i.e.buy at one broker and sell the same pair with other broker.(both brokers dont allow hedging).is there any possibility for a broker to come to know i am hedging? is there anything i should avoid when doing this? can i hedge like this?what are the difficulties i may face in doing this?thank you

A normal STP broker should offer you zero margin requirements for hedging and the option to hedge when you have negative free margin too. If they claim to be DMA and don't offer this feature you should ask why
 

radex78

Banned
Nov 15, 2015
676
17
54
45
I am ever trying use hedging strategy but seems this not suitable for me, from three times use hedging strategy only one plan getting success, so now I am prefer trade with fixed stop loss and floating target, hedging in my opinion also required patience to waiting best timing open lock hedging.
 

ijak8510

Trader
Sep 29, 2015
83
6
19
36
ijak8510 yes it's very tricky, but so far I am never trying these trick in my trades , pure still trade with ordinary strategy with manual analysis, but seems will profitable although only small earning from interest rate,
manual trade offer highest return for traders , but i think it is depend on someone risk profile,
if someone has low risk tolerance, i think this carry trade suitable for him/her,
however i agree with you, with proper knowledge and trading plan, why do not risking some money to earn more.
i mean, this business is high risk high profit business rite?even Tickmill allowed carry trades strategy , but i think it need a lot of money to do carry trade, you need $10k or more, so your profit can be worth as your time