Hi, I would like to try out a particular strategy that involves buying and selling the same currency pair i.e. Going long and short on the EURUSD at the same time. I know that IB does not allow this due to the FIFO rules on a single account. Would creating a new account and linking the account work? Alternatively if the above does not work could I trade under a secondary created user? How would the cash management work to be able to trade from with of the above? Cheers
2 accounts should work i think as long as the buy and sell orders dont risk filling each other at the same time. If there is a risk of that then IB might cancel one of the orders.
Aren't you flat if you go long and short at the same time for an equal number of contracts? If not equal contracts, arent you better off just going long or short and not paying double commissions?
He might be attempting to hold two positions at the same time, see which direction the market moves, then dump the loosing position and retain the winning position. Its a reasonable way to hedge if you can dump the loosing position in time to still make gains on the winning position (i.e., you see the trend as it starts rather than as it finishes).
Man that's utter bullshit, it's the same as just pretending you're long and short in your head and when you see the market go up you pretend you close your imaginary short and actually go long, you've just saved double commission as @lovethetrade mentioned
of course it is utter bullshit. I have tried to get this into the head of uncountable newbies on this site and each time they threw mud at me and accused me of criticizing the authors that postulated this whole hedging bullshit. At some point I decided to rather happily take the money off stupid players as long as they have been informed of their stupidity. Though the biggest beneficiaries are not us smarter players but brokers.
OP, you do realize that being both long and short the same contract is mathematically identical to being flat, right? If you must, you can achieve the same thing in a normal FIFO account by creating synthetic hedging in your trading software framework. Again, it's pointless since being simultaneously long and short a contract is just an illusion anyway.
OK, I think the OP's got the message. He may have some specific requirement that we've overlooked, like taking long and short positions for the same instrument in multiple time-series...in which case, his entry/exit logic and net long/short position will be managed by the trading system.