Hedging Software Building a New EA

[Short14]

Hey all.... I know we all share our results and all, but I was thinking maybe we could make a donation account for koeiseun I am willing to set it up and donate the first $20.00 we all know this is going to take alot of work to accomplish..... That way if we end up with a kick ass ea from all of our suggestions and efforts maybe we can all profit from it.. Its just an idea.... Let me know what you all think, Or maybe the pot just goes to whoever can build an awesome ea with all of our suggestions....:confused:

[kajan]

Hey all.... I know we all share our results and all, but I was thinking maybe we could make a donation account for koeiseun I am willing to set it up and donate the first $20.00 we all know this is going to take alot of work to accomplish..... That way if we end up with a kick ass ea from all of our suggestions and efforts maybe we can all profit from it.. Its just an idea.... Let me know what you all think, Or maybe the pot just goes to whoever can build an awesome ea with all of our suggestions....:confused:
Good idea. I'm definitely prepared to pay $20 for this. Count me in

[Sooner]

I had a thought today related to hedging not just the current pair but maybe hedging based on a pair that correllates closely to the pair we are trading.

So lets say we are short EUR/USD, the best correlated pair to trade would then be USD/CHF trading only short signals. You would however be doubling your margin requirement but would this not likely work for hedging a EURUSD trading EUR/USD as any losses you would have in EURUSD from it going away from your trade direction would likely be offset with gains from the USDCHF pair going with your trading direction?

EURUSD Enter Long ---> It goes short for a while resulting in USDCHF going long
EURUSD Enter Short ---> It goes long for a while resulting in USDCHF Only Short

[Alfonzo]

Good idea. I'm definitely prepared to pay $20 for this. Count me in
Count me in too

[Alfonzo]

I had a thought today related to hedging not just the current pair but maybe hedging based on a pair that correllates closely to the pair we are trading.

So lets say we are short EUR/USD, the best correlated pair to trade would then be USD/CHF trading only short signals. You would however be doubling your margin requirement but would this not likely work for hedging a EURUSD trading EUR/USD as any losses you would have in EURUSD from it going away from your trade direction would likely be offset with gains from the USDCHF pair going with your trading direction?

EURUSD Enter Long ---> It goes short for a while resulting in USDCHF going long
EURUSD Enter Short ---> It goes long for a while resulting in USDCHF Only Short
If you're meaning using a hedge to counteract a drawdown, the problem you have is trying to make up gainst the drawdown you've already suffered.
For example, if you have a SL set at 400, but want to start a hedge running at say 150 drawdown to stop it going any further, you need a method to pull back your 150 pips, which means increasing the stakes on your hedge. This can then lead to greater losses than you would have suffered otigimnally, if you're not careful. I know cos I tried last night on my demo account!!

[Sooner]

In this case you aren't hedging in the technical sense of the term but rather profiting from the draw down ona pair which is 99% correlated, or at least thats the way it works out in my head. I haven't found a way to backtest multiple pairs yet however if anyone knows of something that can please let me know.

[koeiseun]

I have scratched a few line sof code on paper and will test as soon as the markets open on Sunday. Just a reminder, the EA I am developing is not intended to make profit, the aim is to protect your account when FAP is caught in a big draw down. If you set the hedge to kick in when FAP is -350 pips (which a lot of us are using as a stop loss) the hedge will keep your loss a 350 even if FAP goes down to -1000. BUT at least now you have the option to wait it out and if you see it will not come back, manually close both the hedge and the FAP trade for a loss of 350. The hedge is not a miracle cure for a loss, it gives you that extra time to think about a loss without jeopardizing your account balance.

[mystikdragon7]

Thread got a tad off of topic but you can count me in to EAGLE!!!