Nothing to think about, 'hedging' intraday in the way they're doing it is only profitable for the broker because it costs the trader money. It's simple, in order to realize a profit the trader needs to be either net long or net short, there's no way of escaping that fact. You're missing the reason why people like pqt have opposing positions on the same pair (or as they like to call it 'hedging'), it's not so they can trade different positional/intraday strategies. If you read some of their posts on other forums you will soon see that, like pqt, they trade that way on a session by session basis, pqt said himself "when I do use it, I always end the trading session in profits". They simultaneously trade long and short solely to be able to take profit irrespective of which way the market goes and that makes them feel good, but what they seem to fail to realize is that for every pip they make on one trade they are losing it on the other trade. Although their account balance is going up their NAV remains static or is actually going down due to spread costs. In order to make any money eventually they simply have to analysis the market, predict probable price direction, make a decision, and close/reduce one side of their 'hedge'. Their 'hedging' strategy is pointless, they may just as well have made an analysis and traded one way to start off with, realized a profit/loss, and saved themselves dozens of trades and spread costs in-between, not to mention saving time and energy. Broker love these people, they're paying for something without receiving any benefit or advantage from it. The single spread and swap costs associated with positional trades lasting maybe weeks or months are negligible compared to the potential return unlike intraday where the spread cost could be >10% of the potential return on a trade-by-trade basis, but the point is they're not getting anything for their money, hedging in this way isn't helping them in the slightest. The benefit of separating intraday and positional trading strategies in different accounts is that it's easier to manage and monitor longer term trades on one account, performance, return on investment, and risk are all clearer. Transferring funds between accounts is a very simple process taking only a few seconds, there is no need to have trading capital just "sitting there waiting for a trade, not working for me". In any event this is all acadmeic, the NFA have quite rightly banned the practice.
If you really need to hedge, can't you just go with a broker that isn't regulated by the NFA? There are some good brokers...but theres only a few
i've heard brokers are letting their clients open overseas accounts that aren't subject to NFA rules, or you can just open subaccounts and go long in one and short in another.
I have long AUDUSD trades collecting interest from 0.65... & i like to scalp the corrections all the way up. I must be a n00b.
Yeah, you must be doing something wrong. According to the NFA, YOU ARE NOT SUPPOSED TO MAKE MONEY WITH "HEDGING"...!:eek:
hedging is a zero-sum game. at least untill rollover. and only if there are no holding fees. not a negative-sum game at all. Why doesn't the NFA understand that.
lol, trying to be clever but you're just making yourself look dumb! He's not 'hedging' he's trading both directions of the market which he'll still be able to do. The normal (and most sensible) way would be to reverse his trend-following long if he thinks price is going to retrace, and then reverse again when he thinks it's finished retracing and resuming it's uptrend. If for some reason he would rather keep his long open while at the same time trading retracements then it's easy enough to do in separately margined accounts, although it won't be as profitable. And if neither of the above suit him he can just accept his brokers offer to transfer his account out of NFA jurisdiction (assuming they're a broker who has an office outside the US) It's not rocket science, although it probably seems like it is to people like you
This just in from 'Interbank' (lol) FX..... Interbank FX's MultiTrader 4 Recently the NFA issued new regulations prohibiting traders from hedging (having long and short positions open on the same currency pair at the same time). We realize that said regulatory changes will affect the trading style of many customers. As a solution, IBFX's MultiTrader 4 allows users to easily manage multiple accounts at once; via this new trading tool you are able to go short in one account and long in another or vice versa! Margin Keep in mind when using this tool, you are now operating in two separate accounts, and thus, margin rules will behave differently. Formally, additional margin was not required when hedging open positions. Going forward, traders utilizing MultiTrader 4 as a hedging tool will be required to post margin on both sides of the trade, thus increasing the risk of a margin call. Visit our website for more information Get started today: 1. Open an additional account. Opening multiple accounts with Interbank FX is a breeze. Just fill out the additional account form on our website here: (link deleted) 2. Download and install the MultiTrader 4 platform. This platform is similar to our MT4 platform, making it easy for first time users to navigate. We have also created a tutorial video that will make using the platform even easier! Watch the tutorial by clicking here. *Please note: Each account entered into the MultiTrader 4 platform needs to be hosted on the same IBFX server. If you have accounts on more than one server, please contact client services for further help. 3. Login and start trading! Once the additional account has been approved, simply enter in the account information to the MultiTrader 4 platform, and manage all positions from one convenient place. You will be able to: ⢠View all closed positions from all accounts. ⢠Place new orders. You can also set up your trades and distribute them across all of your accounts, or buy and sell (hedge) in individual accounts. ⢠Place pending orders. Interbank FX, Member NFA 3165 E Millrock Drive, Suite 200 Salt Lake City, UT 84121