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#1 15-09-2011 21:49:00

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2831
Website

AWESOME: New forex hedging strategy! (ver. 2.0)

I went over this second strategy in a previous thread, but in order to remove any confusion between it and the previous one, I thought it would be better to dedicate a separate thread to it, so voila!

Here's what you do: if price is trending up, place a buy order for .01 lots (also place a Stop Loss at 29 pips and a Take Profit at 30 pips). At the same time place a Sell Stop order for .02 lots 30 pips below with a 29 pip SL and 30 pip TP. If the first position hits SL and second order is triggered, place a Buy Stop order 30 pips above your new order for .04 lots. Etc... Your order sizes will be .01/.02/.04/.08/.16/etc...
If ever your stop loss is hit and the new order has not been triggered because price has reversed, place this new order on the opposite side, where price is now headed towards (in this situation you will have both a buy stop and sell stop order set up for the same lot size).

I've been testing this for over 2 months, and have yet to have a losing day. At the very most, I'll have a size .32 lot position open, but I have yet to encounter a .64 lot size...prices can't range forever.

Arrow I recommend that if you have a 1000$ (or €) account, your first position be .01. If you have a 2000$ account, I would recommend trading two different pairs (ex: if you go long on EURUSD, also go long on USDJPY, that way you're sure to see half of your open positions hit a take profit, and this will therefore divide your overall risk in half). I would go so far as to trade 4 different pairs if you're trading a 4000$ account, and only increase the weight of your initial positions as you have more capital to trade with.

Arrow Experience has shown me that managing 4 different currency pairs at the same time can be a pain in the ass. In fact, in the morning, when I decide to dive in, it takes me up to 10 minutes to get my 4 positions and 4 pending positions in place because of the mental gymnastics required to set the stop loss levels and take profit levels on those 8 different positions. My friend Ludovic at broker-forex.fr came through with some awesome scripts that cut this 10 minute process down to about 2 minutes (of course, if you only trade one pair, this will take way less time). The scripts automate the process of calculating and implementing the 29-pip stop-losses and 30-pip take profits. Now, before today, I didn't know a damn thing about scripts, but here's what it is and here's what you do (assuming you're using MetaTrader!):
1. Download the MT4 scripts (Unpack the files and copy them into your MT4/experts/scripts folder).
2. Relaunch MT4.
3. On the upper menu bar, click on View + Navigator.
4. Make sure the Expert Advisors button is pushed in in the upper menu bar.
5. On your left, double-click on Scripts.
6. Now, let's say you want to make a buy order, rather than doing it the usual way, you're going to launch the order by double-clicking on the Simple Buy command in the left menu. A window will pop up. By default the first position is set at .01, SL=29, TP=30. Simply click on the "ok" button and your first order is launched and your SL and TP will be set perfectly, you won't have to go back manually to set them!
7. If you're happy with the above default values, skip to 8. If you want to change the parameters (ex: I'm at Instaforex, which uses 5 decimal values, my SL and TP needed to be set at 290 and 300 respectively), you need to EDIT the scripts. To do this, from the upper menu click on Tools + MetaQuotes Language Editor + on the right side of screen select the script you want to change, then modify the 1-3 parameters at the top and save. When you RELAUNCH MetaTrader they should work. Repeat as necessary with any other script you wish to modify.
8. Ok, so your first position is launched, now you need to set up your next one. The second position you launch, you will do it as usual, only this time you don't need to worry about setting the SL and TP. You will do it after you have placed your pending order.
9. Once your pending buy or sell order is setup, highlight it and then double-click on the stop loss script on the left side of the screen. In a few seconds your SL will be set. Do the same for the take profit.
Using the above scripts saves you from having to mentally/manually calculate the take profits and stop losses.

Arrow If you want to follow my trading progress, you can see my stats here (includes charts of my performance). I only trade 2 or 3 times a week on average, if the market's quiet I don't bother, I'd rather read a book or go to a sunny coffeeshop! Also, I only hooked up my account to MyFxBook recently, so there isn't a whole lot of data there, but you can see my trading history and everything. You can even see my balance!


"Anything worth having is worth going for - all the way." - J.R. Ewing

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#2 29-09-2011 09:34:28

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2831
Website

Re: AWESOME: New forex hedging strategy! (ver. 2.0)

Update #1:
September was my first full month trading this strategy at InstaForex with my new account. I'm still taking small positions as my account balance is still relatively low, but will double the size of my account in January assuming I keep having positive months like this one.

My first position is always a size .012 and I do 4 different pairs at the same time: EUR/USD, USD/CHF, GBP/USD and either USD/CAD or AUD/USD (I stopped trading USD/JPY as that pair hasn't been moving much lately).

I will sometimes close out a position manually if it's the 3rd or 4th position and close to the TP if I'm tired of waiting!

Overall performance: +186.52€ (or +$255) or roughly +3.5%
Winning days: 11
Losing days: 0

To see my performance, history and graphical representation of my overall performance go to my myfxbook page.

Also, not to brag, but...on Monday I bought stock in Société Générale (France's number 2 bank) with all of my savings and Tuesday it soared +16.81%! Recessions are a great time to go shopping for stocks and indexes! (especially if you're good at buying in the "bottom zone").


"Anything worth having is worth going for - all the way." - J.R. Ewing

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#3 11-10-2011 10:52:22

anuj20jain_India
Member
Registered: 11-10-2011
Posts: 22

Re: AWESOME: New forex hedging strategy! (ver. 2.0)

Hey John,
I understood you First Strategy ccompletely...
But I am not able to understand your second strategy..
Can you give example which might involve atleast five orders.

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#4 12-10-2011 21:00:21

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2831
Website

Re: AWESOME: New forex hedging strategy! (ver. 2.0)

Sure, here's one I did on the 5th of October.

USD/CHF, first order placed at 10:22 (GMT+)
Order type / Lot size / Price / SL       / TP        / Profit or Loss
Sell             / .012 / .92012 / .92302 / .91712 / -2.84€
Buy stop / .024 / .92312 / .92022 / .92612 / -5.68€
Sell stop / .048 / .92012 / .92302 / .91712 / -11.35€
Buy stop / .096 / .92312 / .92022 / .92612 / -20.90€
Sell stop / .192 / .92012 / .92302 / .91712 / +43.24€
NET PROFIT = 2.47€

Not a huge profit, but when you pull off this sequence several times a day, it adds up.


"Anything worth having is worth going for - all the way." - J.R. Ewing

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#5 13-10-2011 12:20:46

anuj20jain_India
Member
Registered: 11-10-2011
Posts: 22

Re: AWESOME: New forex hedging strategy! (ver. 2.0)

Thanks John...Can i use this strategy with SL 10 and TP 10 ???

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#6 13-10-2011 19:24:13

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2831
Website

Re: AWESOME: New forex hedging strategy! (ver. 2.0)

In theory yes. You'll hit your TP a lot faster...but the downside is that you will be hitting your SLs more often (and it may be tricky to manage more than one pair at the same time)...I would try it out on a demo account first...let us know how it works for you if you do!


"Anything worth having is worth going for - all the way." - J.R. Ewing

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#7 14-10-2011 06:02:15

anuj20jain_India
Member
Registered: 11-10-2011
Posts: 22

Re: AWESOME: New forex hedging strategy! (ver. 2.0)

In case 10/10 is risky proposition...would 15/15 be a asfer bet..?

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#8 14-10-2011 09:17:35

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2831
Website

Re: AWESOME: New forex hedging strategy! (ver. 2.0)

I honestly don't know, but if I had to choose, I would test 15/15 instead of 10/10.


"Anything worth having is worth going for - all the way." - J.R. Ewing

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#9 17-10-2011 10:29:45

anuj20jain_India
Member
Registered: 11-10-2011
Posts: 22

Re: AWESOME: New forex hedging strategy! (ver. 2.0)

Will Instaforex provide , interest , rebate and bonus on 800 USD??

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#10 17-10-2011 17:42:44

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2831
Website

Re: AWESOME: New forex hedging strategy! (ver. 2.0)

Yes (interest is paid at the end of each month), yes (you get your rebate 2 days after your trades), yes (but to get bonus, make sure you follow instructions halfway down this page; but note it will take you a very long, long time to actually free up the bonus using this strategy, but it can be done. My friend Ludovic trades like a madman, sometimes taking very big and risky trades, he was able to free up his bonus in just a few weeks).


"Anything worth having is worth going for - all the way." - J.R. Ewing

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