A perfect hedge would be to close out your position, sell your 1 10yr. The point of hedging is to take away risk, a perfect hedge would take away all your risk. The point of trading is to take on risk in order to make profits, a traded doesn't want to be hedged he wants to be on the right side of moves. You want to control your risk, so you will not lose (THIS IS THE WAY TO SPELL IT NOT LOOSE) too much and still have an opportunity for gains. Someone that hedges usually has to pay to do so, a trader is the entity that allows the hedge to take place and should be the one getting money for it, especially in the futures market. 5yr
i agree with this statement. I would concentrate more on simplicity, compunding the winners and cutting the losers short. It sounds like mentaly you dont want to accept a loss. COme up with a simple formula(with equities i double the position every 10% gain with a techncal or trailing stop loss)...i can program it and walk away. but you are thinking and looking for input to spot your errors...so that is great. Good luck.