how to BEAT the NEW HEDGE RULE...in the same account...
two things guys: try this, AND SPREAD IT ALL OVER THE PLACE...
how to BEAT THE NEW HEDGE RULE!!!
now, I like being a spoiler, especially when it comes to the BIG GUYS implementing stuff to put the squeeze on the little guy, namely me, so I'm gonna try and THROW A WRENCH IN THEIR PLANS!!!
(I was just about to start trading in forex, when I FOUND I COULD NO LONGER HEDGE...really cramped my style...wondered why...found out about the NFA rule change, and decided I'd have a real problem, if I couldn't do an "end-run" around this stupid rule...so, I put it to my intuition, and this is what came back....)
Ok, now I know you can open two accounts, but margin loss on the opposite position WILL STILL likely WIPE YOU OUT in one account...so I'm gonna show you HOW TO BEAT THE NEW RULE with JUST A SLIGHT MODIFICATION...IN THE SAME ACCOUNT...then will see if the SMARTIES at the top can NULLIFY THIS.
Now, I'm somewhat of an "intuitive" I was NOT that great in math, but great in "instant intuitive solutions to problems." The reason I'm telling you this is: I didn't do the math...just intuited the answer to BEATING THE NEW HEDGE RULE...SO HERE GOES:
1. an exact example...I tried it...it seems to work...some math wiz can back up the logic...etc.
the solution to HEDGE in the SAME ACCOUNT...despite the NEW HEDGE RULE:
now you can use ANY THREE CURRENCIES...(you used to be able to use just two before they started monkeying with the rules...)
an example: by live positions you must:
BUY the YEN and SHORT the DOLLAR,
BUY the DOLLAR and SHORT the EURO,
BUY the EURO and SHORT the YEN.
now notice what's different:
there are now THREE CURRENCIES involved instead of TWO.
there are now THREE POSITIONS OPEN instead of TWO.
THIS IS A LOOP...so you have an effective hedge IN THE SAME ACCOUNT...I tried this for an hour in my practice account, and except for the initial pip spread give to the broker, it MAINTAINED AN EFFECTIVE HEDGE (should as long as you keep the three positions open...used to be TWO OFF-SETTING).
essentially you are using a mathematical loop with THREE POSITIONS (3 currencies) in a loop, whereas before you could just do TWO OPPOSITE POSITIONS.
try it out, and let me know if you run into any problems...IF IT'S GOOD TO GO...
SPREAD THE IDEA ALL OVER THE PLACE... AND WE'LL PUT THE SCREWS TO the NFA AND FRIENDS!!!
again, YOU ONLY USE THREE CURRENCIES and YOU GO: long/short...long/short...long/short forming a loop as in the example above.
YOU CAN DO THIS WITH ANY COMBINATION OF THREE CURRENCIES...
EFFECTIVELY CIRCUMVENTING THE "new hedge" rule...IN THE SAME ACCOUNT!
flashrob
Ps. for example after the three trades are running for a while...when one is winning big, and depending on the "short-time chart pattern" ...I might sell the winner and wait for the
cyclical back move on what then becomes an UNHEDGED POSITION!
tell me what you think???
two things guys: try this, AND SPREAD IT ALL OVER THE PLACE...
how to BEAT THE NEW HEDGE RULE!!!
now, I like being a spoiler, especially when it comes to the BIG GUYS implementing stuff to put the squeeze on the little guy, namely me, so I'm gonna try and THROW A WRENCH IN THEIR PLANS!!!
(I was just about to start trading in forex, when I FOUND I COULD NO LONGER HEDGE...really cramped my style...wondered why...found out about the NFA rule change, and decided I'd have a real problem, if I couldn't do an "end-run" around this stupid rule...so, I put it to my intuition, and this is what came back....)
Ok, now I know you can open two accounts, but margin loss on the opposite position WILL STILL likely WIPE YOU OUT in one account...so I'm gonna show you HOW TO BEAT THE NEW RULE with JUST A SLIGHT MODIFICATION...IN THE SAME ACCOUNT...then will see if the SMARTIES at the top can NULLIFY THIS.
Now, I'm somewhat of an "intuitive" I was NOT that great in math, but great in "instant intuitive solutions to problems." The reason I'm telling you this is: I didn't do the math...just intuited the answer to BEATING THE NEW HEDGE RULE...SO HERE GOES:
1. an exact example...I tried it...it seems to work...some math wiz can back up the logic...etc.
the solution to HEDGE in the SAME ACCOUNT...despite the NEW HEDGE RULE:
now you can use ANY THREE CURRENCIES...(you used to be able to use just two before they started monkeying with the rules...)
an example: by live positions you must:
BUY the YEN and SHORT the DOLLAR,
BUY the DOLLAR and SHORT the EURO,
BUY the EURO and SHORT the YEN.
now notice what's different:
there are now THREE CURRENCIES involved instead of TWO.
there are now THREE POSITIONS OPEN instead of TWO.
THIS IS A LOOP...so you have an effective hedge IN THE SAME ACCOUNT...I tried this for an hour in my practice account, and except for the initial pip spread give to the broker, it MAINTAINED AN EFFECTIVE HEDGE (should as long as you keep the three positions open...used to be TWO OFF-SETTING).
essentially you are using a mathematical loop with THREE POSITIONS (3 currencies) in a loop, whereas before you could just do TWO OPPOSITE POSITIONS.
try it out, and let me know if you run into any problems...IF IT'S GOOD TO GO...
SPREAD THE IDEA ALL OVER THE PLACE... AND WE'LL PUT THE SCREWS TO the NFA AND FRIENDS!!!
again, YOU ONLY USE THREE CURRENCIES and YOU GO: long/short...long/short...long/short forming a loop as in the example above.
YOU CAN DO THIS WITH ANY COMBINATION OF THREE CURRENCIES...
EFFECTIVELY CIRCUMVENTING THE "new hedge" rule...IN THE SAME ACCOUNT!
flashrob
Ps. for example after the three trades are running for a while...when one is winning big, and depending on the "short-time chart pattern" ...I might sell the winner and wait for the
cyclical back move on what then becomes an UNHEDGED POSITION!
tell me what you think???