1690 is supp and can hold to some extend 1697 break now is required.
XAU/USD & XAG/USD - Gold & Silver Traders Thread
- #20,764
- Sep 5, 2012 11:00am Sep 5, 2012 11:00am
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
- #20,765
- Sep 5, 2012 11:03am Sep 5, 2012 11:03am
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
- #20,770
- Edited 7:59pm Sep 5, 2012 7:58pm | Edited 7:59pm
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
- #20,772
- Edited 8:42pm Sep 5, 2012 8:30pm | Edited 8:42pm
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
Read my last post please as well.
--------------------------------------------
Ask other traders with any experience and they will tell you the same,
you only hedge as a speculator, (oh umm unless you are a farmer hedging your corn crop on the CME? No didn't think so,
) thus you only hedge a winning position.
To quote you actually
What you said here is the EXACT definition of taking a long and a short at the same time, no conviction, no real bias, no real set targets, a bit afraid it could go up but it could go down, yeah, that's the market brother!!!
There is absolutely no reason to open an opposing trade against YOURSELF!
when there is a trend emerging and clear opportunity before you.
Had you presented a 10 USD range scalping system to us that says you are always hedged and you take profits SUCCESSFULLY on both sides of the trade by doing XY and Z than fine. But that's not the case.
Let's put it into swissy than because I believe the last time I did use GOLD and 1600 as a reference.
OK here we go. EXAMPLE 2
YOU are SHORT swissy for 900 PIPS. YOU have just hit a major support and believe due to news and techs the pair "could" rise 300 pips. THUS,
You open up a long and catch the retracement up, ( While you could also just wait for the pair to fall again while monitoring your position instead of overexposing yourself to the market, but thats fine some feel they need every pip.)
SO LONG hits 300 pips and NOW at resistance, CLOSE SAME PAIR HEDGE and perhaps double up short while the pair continues to drop.
THIS COULD ALSO BE CALLED GREED.
The TRUEST FORM of hedging and the reason it basically MADE the futures market is EXACTLY what I mentioned before. The farmers in the midwest were losing crops, due to bad weather etc. obviously some of these farms had investors, however the futures market offered the farmer looking at a season full of torrential rain, destroying his corn crop (Yes, the farmers actually produce a commodity, speculators do nothing besides risk money.)
could go onto the futures market and SHORT CORN, thus at the end of the HORRIBLE SEASON when he almost can't put food on the table, thank the market for that futures contract that basically PAID HIM FOR HIS LOST CROP IN REVERSE. THAT is how hedging started and it's initial purpose. Gold miner's will likely do the same thing all the time, with respect for the market, as do say car dealers that sell Mercedes Benz's in the USA but need to buy them in EURO'S.
I am not going to get into an argument about this I am just trying to educate here.
Two more things I have to say,
One. is WHY if you are going to GO LONG GOLD should you HEDGE by taking a short on the exact same pair? This is spot not options, where these kind of straddle and strangle trades only get triggered once a certain price is hit and there IS A COMPLEX strategy usually attached to this kind of trading. Thus you are not risking loss or gain constantly against yourself.
Now, if you are shorting GOLD, why not look at it's inverse relationship usually enjoyed with the USD, thus HEDGING, by SHORTING THE USDX or a pair like USD/CHF.... DYODD..
TWO. Ask your broker what happens to the initial buy price of your trade in the back office once you open a hedge, the first thing they will likely tell you if they have any integrity is you have AUTOMATICALLY LOCKED IN A LOSS..... Not to mention you have paid and now have to beat the same spread twice.
The rest was explained to me by a market maker twice over 2 half hour sessions and was so ridiculous and confusing not to mention UNFAIR sounding that I said, to hell with this!
Thus, again, you SHOULD ONLY HEDGE a WINNING position. Hedging a loser is adding to the loss and Hanging on to HOPE that the trade will do exactly what YOU WANT, which let's say is rise 100 pips allowing you to take profit then fall 200 allowing YOU again king of the market to simply collect profit!!!
YEAH! HOW many times does that happen
Not saying it can't be done. Just trying to eliminate losses here......
Sincerely,
XT
--------------------------------------------
Ask other traders with any experience and they will tell you the same,
you only hedge as a speculator, (oh umm unless you are a farmer hedging your corn crop on the CME? No didn't think so,
) thus you only hedge a winning position.To quote you actually
To me that indicates that you are fearful of losing profits and are making decisions off emotions. I say take positions as the market allows you to.
There is absolutely no reason to open an opposing trade against YOURSELF!
when there is a trend emerging and clear opportunity before you.
Had you presented a 10 USD range scalping system to us that says you are always hedged and you take profits SUCCESSFULLY on both sides of the trade by doing XY and Z than fine. But that's not the case.
Let's put it into swissy than because I believe the last time I did use GOLD and 1600 as a reference.
OK here we go. EXAMPLE 2
YOU are SHORT swissy for 900 PIPS. YOU have just hit a major support and believe due to news and techs the pair "could" rise 300 pips. THUS,
You open up a long and catch the retracement up, ( While you could also just wait for the pair to fall again while monitoring your position instead of overexposing yourself to the market, but thats fine some feel they need every pip.)
SO LONG hits 300 pips and NOW at resistance, CLOSE SAME PAIR HEDGE and perhaps double up short while the pair continues to drop.
THIS COULD ALSO BE CALLED GREED.
Hedging
Hedging, a common practice of farming cooperatives, insures against a poor harvest by purchasing futures contracts in the same commodity. If the cooperative has significantly less of its product to sell due to weather or insects, it makes up for that loss with a profit on the markets, since the overall supply of the crop is short everywhere that suffered the same conditions.
The TRUEST FORM of hedging and the reason it basically MADE the futures market is EXACTLY what I mentioned before. The farmers in the midwest were losing crops, due to bad weather etc. obviously some of these farms had investors, however the futures market offered the farmer looking at a season full of torrential rain, destroying his corn crop (Yes, the farmers actually produce a commodity, speculators do nothing besides risk money.)
could go onto the futures market and SHORT CORN, thus at the end of the HORRIBLE SEASON when he almost can't put food on the table, thank the market for that futures contract that basically PAID HIM FOR HIS LOST CROP IN REVERSE. THAT is how hedging started and it's initial purpose. Gold miner's will likely do the same thing all the time, with respect for the market, as do say car dealers that sell Mercedes Benz's in the USA but need to buy them in EURO'S.
I am not going to get into an argument about this I am just trying to educate here.
Two more things I have to say,
One. is WHY if you are going to GO LONG GOLD should you HEDGE by taking a short on the exact same pair? This is spot not options, where these kind of straddle and strangle trades only get triggered once a certain price is hit and there IS A COMPLEX strategy usually attached to this kind of trading. Thus you are not risking loss or gain constantly against yourself.
Now, if you are shorting GOLD, why not look at it's inverse relationship usually enjoyed with the USD, thus HEDGING, by SHORTING THE USDX or a pair like USD/CHF.... DYODD..
TWO. Ask your broker what happens to the initial buy price of your trade in the back office once you open a hedge, the first thing they will likely tell you if they have any integrity is you have AUTOMATICALLY LOCKED IN A LOSS..... Not to mention you have paid and now have to beat the same spread twice.
The rest was explained to me by a market maker twice over 2 half hour sessions and was so ridiculous and confusing not to mention UNFAIR sounding that I said, to hell with this!
Thus, again, you SHOULD ONLY HEDGE a WINNING position. Hedging a loser is adding to the loss and Hanging on to HOPE that the trade will do exactly what YOU WANT, which let's say is rise 100 pips allowing you to take profit then fall 200 allowing YOU again king of the market to simply collect profit!!!
YEAH! HOW many times does that happen
Not saying it can't be done. Just trying to eliminate losses here......
Sincerely,
XT
By definition that is what hedging is. However I think you meant (for example gold) that you should only be selling gold if you are already long gold. I don't know if I agree with that. To me that indicates that you are fearful of losing profits and are making decisions off emotions. I say take positions as the market allows you to. Why pass up an opportunity to short gold simply because you are not long gold?
Agree with this though.
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
- #20,773
- Edited 9:27pm Sep 5, 2012 8:39pm | Edited 9:27pm
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
- #20,774
- Sep 5, 2012 9:49pm Sep 5, 2012 9:49pm
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
- #20,775
- Sep 5, 2012 11:07pm Sep 5, 2012 11:07pm
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
- #20,776
- Sep 5, 2012 11:07pm Sep 5, 2012 11:07pm
Ask other traders with any experience and they will tell you the same, you only hedge as a speculator, (oh umm unless you are a farmer hedging your corn crop on the CME? No didn't think so,
What you said here is the EXACT definition of taking a long and a short at the same time, no conviction, no real bias, no real set targets, a bit afraid it could go up but it could go down, yeah, that's the market brother!!!
There is absolutely no reason to open an opposing trade against YOURSELF!
when there...
So for example if I was long gold at 1600. What if I got a valid setup short at 1800? Should I cash in my long position? Hell no. I would rather leave my long position at breakeven and take a short in the opposite direction, because I don't know where the market is going. One of two things will happen. 1) I take a small loss and my long position grows as the uptrend continues. 2) New short position moves into profit and I move stop to B/E.
Now if scenario two happens I've got the market trapped between my two positions. How do I know this short won't go back to 1600 and below? I don't.
Now this kind of strategy cannot be implemented on a 1hr, 4hr, or even a daily chart because the scale is too small and there is not enough room to maneuver. That is why I place all of my emphasis on the weekly and monthly timeframes while using lower timeframes to pinpoint entries in line with my monthly and weekly bias. Right now for gold my monthly and weekly bias are up as I've stated previously.
YOU are SHORT swissy for 900 PIPS. YOU have just hit a major support and believe due to news and techs the pair "could" rise 300 pips. THUS,
You open up a long and catch the retracement up, ( While you could also just wait for the pair to fall again while monitoring your position instead of overexposing yourself to the market, but thats fine some feel they need every pip.)
SO LONG hits 300 pips and NOW at resistance, CLOSE SAME PAIR HEDGE and perhaps double up short while the pair continues to drop.
THIS COULD ALSO BE CALLED GREED.
Thus, again, you SHOULD ONLY HEDGE a WINNING position. Hedging a loser is adding to the loss and Hanging on to HOPE that the trade will do exactly what YOU WANT, which let's say is rise 100 pips allowing you to take profit then fall 200 allowing YOU again king of the market to simply collect profit!
I hope I've cleared up what I've been saying.
Twitter: @zusch_ -- Preselecting trending pairs, stocks on a weekly basis.
- #20,777
- Sep 5, 2012 11:14pm Sep 5, 2012 11:14pm
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
- #20,779
- Sep 5, 2012 11:31pm Sep 5, 2012 11:31pm
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
- #20,780
- Sep 5, 2012 11:34pm Sep 5, 2012 11:34pm
- Joined Aug 2009 | Status: Patience = Simplest of all skills | 7,152 Posts
You have it backwards.
THE trade was a 900 pip booked (or shall we say RIDING) - booked would mean closed) short, you got long to catch a possible 300+ pip upswing.
Then "possibly" added to the short.
I would in this scenario. Especially had my trade went from 900 gross to 600 gross but I had an extra 300 net.
Edit 2 = The "greed" part was opening the hedge in the first place. I am also discussing longer term trading here, in day trading I see no need for hedging at all.
XT-
THE trade was a 900 pip booked (or shall we say RIDING) - booked would mean closed) short, you got long to catch a possible 300+ pip upswing.
Then "possibly" added to the short.
I would in this scenario. Especially had my trade went from 900 gross to 600 gross but I had an extra 300 net.
Edit 2 = The "greed" part was opening the hedge in the first place. I am also discussing longer term trading here, in day trading I see no need for hedging at all.
XT-
I was only trying to explain what I thought I had already clearly explained, not start an argument. Your Swissy example is a good one, but I wouldn't call doubling down on your short greedy as long as you have valid reasons. I also wouldn't be taking a 300 pip profit on that long, but instead leaving that stop at B/E in case it was the start of a new uptrend.
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News