Hedging strategy

[hubert1111]

Hello,
i new i just want to ask:
When i see hedging strategy there is something like that :
first 0,1 lot than double 0,2 than 0,4
and final like multiple times it goes to 48 or something like that
so its 8 or 9 operation to make this strategy succesful
im i right

My question is why ???? what happend if i will double lot goes to 48 lot and what if market will still in my "wish"
Second question: If that works like that how much min money must i have to make this trategy work , i can start from 0,01 lot its ok

do i have chance to start with 450$ and use strategy,,, i will have then only 30$, 60$, 120$, 240$ so its 4 "possition" not 8 or 9 when it s show on images of hedging strategy which i still dont get . Best regards

 

[Fin_Trader]

This is a martingale strategy. Naturally, its first goal is to increase the deposit as quickly as possible. Experienced traders are wary of this method and resort to it rarely, because the risk of a deep drawdown or complete loss of the deposit is too high.

 

[Polakandil]

Using a lot size that is larger than the first position in my opinion is less wise and more risky. Besides trading costs, it is also more complicated to manage trades and account balances so that they are healthier in the long term.

 

[borzy]

Hello,
i new i just want to ask:
When i see hedging strategy there is something like that :
first 0,1 lot than double 0,2 than 0,4
and final like multiple times it goes to 48 or something like that
so its 8 or 9 operation to make this strategy succesful
im i right

My question is why ???? what happend if i will double lot goes to 48 lot and what if market will still in my "wish"
Second question: If that works like that how much min money must i have to make this trategy work , i can start from 0,01 lot its ok

do i have chance to start with 450$ and use strategy,,, i will have then only 30$, 60$, 120$, 240$ so its 4 "possition" not 8 or 9 when it s show on images of hedging strategy which i still dont get . Best regards

Sometimes the required number of doubling will be less like 5 or 6, your example means some worst case scenario that may happen in 0.001% cases. But it will certainly happen if you make a lot of traders. In other words you will most probably encounter bad streak of trades that will let your strategy eventually fail.

 

[PhoenixJ]

This is a martingale strategy. Naturally, its first goal is to increase the deposit as quickly as possible. Experienced traders are wary of this method and resort to it rarely, because the risk of a deep drawdown or complete loss of the deposit is too high.

Well said.

 

[brooksjanet24]

Hello,
i new i just want to ask:
When i see hedging strategy there is something like that :
first 0,1 lot than double 0,2 than 0,4
and final like multiple times it goes to 48 or something like that
so its 8 or 9 operation to make this strategy succesful
im i right

My question is why ???? what happend if i will double lot goes to 48 lot and what if market will still in my "wish"
Second question: If that works like that how much min money must i have to make this trategy work , i can start from 0,01 lot its ok

do i have chance to start with 450$ and use strategy,,, i will have then only 30$, 60$, 120$, 240$ so its 4 "possition" not 8 or 9 when it s show on images of hedging strategy which i still dont get . Best regards

With $450 I think you'd run out of margin way before reaching the higher lot size. Do you plan to test it on demo first?

 

[Polakandil]

Using an averaging up strategy may be lower risk than martingale. In averaging up the trader adds a new position when the price has risen and the trader believes the price will rise higher. On the other hand, martingale is very risky when adding double lots when prices fall with the trader's belief that the trend will move as before.

 

[brooksjanet24]

Using an averaging up strategy may be lower risk than martingale. In averaging up the trader adds a new position when the price has risen and the trader believes the price will rise higher. On the other hand, martingale is very risky when adding double lots when prices fall with the trader's belief that the trend will move as before.

How do you decide when to stop adding positions in an averaging-up strategy?

 

[Polakandil]

How do you decide when to stop adding positions in an averaging-up strategy?

I rarely use the averaging up strategy, but a scenario that can be tried is modifying the stop loss in the first position.

 

[Fin_Trader]

How do you decide when to stop adding positions in an averaging-up strategy?

The averaging strategy is dangerous for the deposit. If the price suddenly reverses on the news market, it is very easy to lose the deposit. It is better to trade on the market, setting the stop higher and opening a trade with a large step only when the previous position is already in breakeven.