How to hedge

Discussion in 'Index Futures' started by Mdtbyk, Sep 17, 2017.

  1. Mdtbyk

    Mdtbyk

    hi
    I only like and know to trade the es.
    I was wondering how can I protect myself in the way that I can control my loss to 1% of the account (not by using a stop loss I don't believe that system ) if I have a 10k account how do I make that I can lose only 100$ that's the max loss

    Thanks
     
  2. cvds16

    cvds16

    there is no other way but a stoploss duh ... no matter what you believe ...
    the only other thing I could think of is buying put options (if long) or call options (if short) but that might come pretty expensive
     
  3. Xela

    Xela


    I don't mean this to sound impolite, but that's why you have the problem.



    It is possible (at least in theory) to do that by hedging, if necessary by simultaneously using two different accounts, but it's (a) ridiculously messy and complicated in practice, (b) potentially up to twice as expensive in dealing-costs as using a stop-loss, and (c) totally unnecessary and of no greater benefit than using a stop-loss.

    What would be far more helpful to you would be to re-examine your underlying beliefs about stop-losses, and re-orientate your thinking on that subject. And - as they say in some parts of the world - "I wish you well to do so." :)
     
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  4. In addition to what Xela so kindly and correctly told you, learn to read price movement and learn how to trade so that you have no need to hedge. And then a stop loss will be all you need.
     
    Last edited: Sep 17, 2017
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  5. Mdtbyk

    Mdtbyk

    I tried using stop losses I don't trade with technical analysis or patterns and It could take sometimes 2/3 weeks till I make a profit on the position and using a stoop loss will just knock me out 80% of the time cause there is always a downside to each direction u go
     
    MACD likes this.
  6. So that should show you that your entry point is something requiring more study.
     
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  7. cvds16

    cvds16

    than just trade smaller so your stoploss is further from entry and at one procent of your account ... easy solution
     
    Lou Friedman and 777 like this.
  8. Xela

    Xela


    That's a reason to learn how to set stop-losses appropriately for the type, size, volatility and duration of the trading you're doing, not a reason not to use them - and certainly not a reason to be trying to hedge instead.
     
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  9. speedo

    speedo

    The only way to avoid losses is to have nothing left to lose.
     
    Lou Friedman and 777 like this.
  10. Mdtbyk

    Mdtbyk

    For some the stop loss is good , for me it doesn't work
     
    #10     Sep 17, 2017