Check Out this Method of Hedging VS Stop Loss!

[Aspecpower]

Hey Everyone, I use this and have created a script in FXDreema for the 1st Hedge to be placed and the SL of the original Position to be moved. From there, I remove the EA because I am stuck and I manage any additional hedge legs that are necessary manually. It is all about proper sizing and placement of the initial stops for your starting position. You need to keep in mind how easily the trade will close based on where the new TP will be of the 1st leg of a hedge. I trade using this technique with great success, happy to share with anyone but I need help. The math is correct in lot sizing based on moving the original position TP to a 1:1 R/R AFTER the hedge order triggers. The math is different if you stay at a 2:1 or 3:1 etc. I prefer to change the trade to 1:1 once hedged so as to close out all positions more quickly. If not 1:1, the distance of the TP of the Hedge will be the same size in pips/pts as your original position's TP. There is a greater possibility of trading in range and needing additional hedged legs. Downside: The lot size increases substantially as you go down from an initial trade of either 3:1/2:1 down to a 1:1. The size of your account is not so much the issue because hedging allows you to generally offset your margin such that only the difference of lot sizing from long vs short is factored against your limits. The bigger issue is if you are in fact adding legs to the hedge, the sideway nature of the trade is causing both sides of the trade to be negative and it makes your floating P/L look pretty rough until the trades close. For anyone with funded accounts, you have to be careful and size down while figuring out how to structure your trades. If anyone is interested in the actual equations for the other R/R ratios I will gladly give them out if we can get some movement and help in completing this EA:)

• Needs to work on manual or auto trades and with an on/off button
• 1st Position opens w/ SL and TP
• Turn "on" Hedge EA or drag/drop to chart

1st Hedge:

• Pending Order is placed on SL of 1st Position
• *LOT Size: 2X of 1st Position
• TP of Pending Order is the same size in pips as 1st Position SL.
• SL of Pending Order is: 2X Pip Size of TP (0.5R/R)
• Move SL of 1st Position to TP of Pending Order

"If" 1st Hedge Triggers, place 2nd Hedge Pending Order:

• Move TP of Original Position to SL of 1st Hedge. Now all open positions are at 0.5R/R
• Pending Order (2nd Hedge) is placed at the same Entry, SL and TP of 1st Position
• *Lot Size: 3X of 1st Position

"If" 2nd Hedge Triggers, place 3rd Hedge Pending Order:

• Pending Order is placed at same Entry, SL and TP of 1st Hedge Position
• ***LOT Size: 2X of LAST HEDGE LOT SIZE

"If" Neither SL or TP levels trigger, Pending Orders (New Hedges) are placed each time price reverses and crosses the opposite Entry Level. Lot Size continues to increase @ 2X of the LAST Hedge. All Buy Orders/Positions have the same Entry, SL and TP. All Sell Orders/Positions have the same Entry, SL and TP. ALL orders will close when TP level is reached on either end of the range.

The last Pending Order that is "NOT" opened should be deleted after the trade closes.

I would love to add a setting that would close ALL orders based on a floating p/l total of all positions in the current hedge.

Let me know what you think and if you'd like me to email you a spreadsheet or anything else. So far I have a very simple FXDreema EA that puts on the 1st hedge order and moves the SL of the 1st position to the TP of the Hedge. I then close the EA and manage the trade manually.

THANKS!!!!!

[l'andorrà]

@aspecpower Did you try this strategy manually? Was it profitable? I'm very skeptic on hedging strategies.

[Aspecpower]

@l-andorrà First, I appreciate all of your content on YouTube! And yes, I use this method to hedge almost all of my manual trades. It is not for a profit, it is to replace a stop loss. The moment the hedge is triggered, you are now in the mode of managing the hedge...the trade will no longer be profitable. Due to slippage sometimes you are up or down 1-2% of your initial risk amount. It is not without risk but it is SEVERELY decreased. There have been times that I have to cut a trade due to exceeding a daily loss limit in the case of multiple hedges being required and trading inside a range because of bad order placement. I trade an FTMO account. That happens much less often now. Early on I tried different methods to latter out of different legs of the position to post some kind of profit but I found my results were at best 50/50 and it was not worth the risk. By using the hedge to break even, that has changed my view and shared previous experiences of how and where to use hedging strategies. The reality is, while much more complex, all of wallstreet uses hedging in their risk management. This is just some simple math so I can do the same thing in a way my mind understands:) I'd love to have your help on this and would be happy to share additional info such as trade info with you.

[TipsyWisdom]

@l-andorrà said in Check Out this Method of Hedging VS Stop Loss!:

@aspecpower Did you try this strategy manually? Was it profitable? I'm very skeptic on hedging strategies.

The markets move in a way that those who move it are hedging their positions constantly. Same as with the bankers. Constantly in all sorts of positions hedging.

It works, if you have the capital and knowledge to understand how to do it well. Check out Nick Shawn on Youtube. I will admit hes very gimmicky in trying to get people to follow and sub, but its not about the money or cars, he has valuable knowledge and proves hes profitable.

[Aspecpower]

@tipsywisdom Thanks for the input! I'll check it out based on your suggestion

[Aspecpower]

@l-andorrà Any input or feedback?

[l'andorrà]

@aspecpower Well, I'm not a trading guru, soI prefer not to offer any suggestion on how to deal with the market. I prefer to focus on helping how fxDreema works. Personally I don't like hedging, but I'm an openminded trader after all. If you are searching for help on specific fxDreema implementation, I will help you.

[Aspecpower]

@l-andorrà Oh...the FXDREEMA part is EXACTLY what I need help with! I already use the strategy and have successfully made the first part of the code but I cannot figure out what to do next:( Right now, I drag the EA onto the chart and then place my trade with SL/TP. The EA creates a pending order at the manual trade's SL in the correct size relative to the starting lot size. The EA moves the 1st SL to the TP level of the pending hedge. Then I have to remove the EA because the next steps are not complete IF the hedge triggers.

Here's where I get stuck:

• If the 1st pending order (hedge) triggers, I need the TP of the opening trade moved to the hedge's SL. I don't know how to use use the trigger of a specific pending order to modify the stops of the 1st Position. I was successful in modifying the SL the first time because there was only one open position.

• I also need a new pending order placed when the 1st hedge triggers. The levels are all the same of the 1st opened position.

• The math changes for lot sizes from the 1sf hedge to the 2nd, but thereafter it is the same.

• After the 1st and 2nd hedge is placed, my idea was to make some type of pending order loop based on whether the last order is a buy or sell. I thought a loop like that would handle the alternating aspect of the orders with the lot size being increased.

• The last step would be to cancel pending orders after all orders close (placed by hedge EA)

I apologize in advance for using incorrect terms, I'll work on that:)

Should I post or send what I have so far?

Thanks, Andrew

[l'andorrà]

@aspecpower Ok. Then we will move step by step. Can you please share the link to your project? We'll begin from there. However, I cannot a daily response here, Ok?

[Aspecpower]

@l-andorrà I appreciate ANY help, no worries if you cannot respond daily! Here is the link: https://fxdreema.com/shared/Uca51xeD

I'm sure there is more wrong than right in how I have approached the code thus far...but I use this everyday in my trading as it is. I load the EA, make my trade, it automatically loads my first pending order (1st hedge) and moves the SL of my 1st position to where it needs to be. Then I REMOVE the EA after the pending order is created. If I leave the EA on in the event of the hedge order triggering, the next pending order is incorrect because it creates a stop/limit order, moves the SL of the recent order etc.

Summary: The function of this code is correct for creating the 1st pending order/hedge position and in moving the SL for the opening position to the correct location. The size calculation is also correct.

Next Step/2nd Hedge:

1. When pending order from first step above is triggered (1st Hedge), TP of opening order needs to be moved to the SL level of the 1st Hedge/1st Pending order
2. A new pending buy/sell stop order needs to be created with Entry, TP and SL matching the adjusted/current levels of the opening position.
3. Lot size is calculated as follows: (2X First Hedge Lot Size) - (Opening Position Lot Size).

Last Step/3rd Hedge:

1. If the previous pending order (2nd Hedge) is triggered, a new pending buy/sell stop order needs to be created that matches the Entry, TP and SL from the position before last (1st Hedge in this case).
2. Lot Size is: 2XPrevious Hedge Lot Size

• This last step repeats in the relationship and lot size until price action breaks through either TP levels up or down

** Any pending order created by the EA needs to be cancelled if ALL positions close

[l'andorrà]

@aspecpower Ok. Let's begin. Here you have the first steps to do:

1. Move all blocks to the 'on tick' tab. All blocks on the 'on trade' tab need to be connected below a puprple block belinging to that tab, and you do not need that.
2. Pink blocks must be connected below a pink 'For each trade' block. Otherwise they will not work correctly. So substitute both blue 'if position' blocks accordingly.

The remaining structure seems correct so far.

[Aspecpower]

@l-andorrà Hello! I am excited to learn, I missed your response so sorry for the delay:)

I made the changes but I cannot get a pending order to trigger either manually or through another EA that I use which is just a trade manager (it enters the TP and SL at the same time as the entry). Here is the link for the change you specified, hope I did what you described:)

https://fxdreema.com/shared/DxVf16qic

[l'andorrà]

@aspecpower If you need to manage trades that were not opened/programmed by the current EA the you ned to select the following option:

[Aspecpower]

@l-andorrà Here is the link with the changes you specified:)

https://fxdreema.com/shared/hjd6U017b

If I install the EA on a chart and then create a position by any means, the EA is removed from the chart. What is causing that?

[Aspecpower]

@l-andorrà Here is the error message on the experts tab on MT5:

2022.03.28 21:35:56.455 HedgeTest4A_OnTick (3) (ETHUSD,M1) array out of range in '59235-39542.mq5' (5305,49)

[l'andorrà]

@aspecpower This is the first time I see that error. I have no idea why it is not working. Is that the whole Ea or are you adding other blocks to it?

[Aspecpower]

@l-andorrà Nothing else...the links I have sent are all I have. The first link with the "on trade" version executes and I use it in live trading. I cannot figure out how to get the same/similar code to work in the "on tick" tab as layed out in the last link I sent.

[l'andorrà]

@aspecpower Then I hope a real programmer can help you, sorry.

[Aspecpower]

@l-andorrà Well I will work on it and let you know if I figure anything out...thanks so much for your help!

[l'andorrà]

@aspecpower You're welcome.