I use a Correlation Hedge strategy with a good level of success. It involves two positively correlated pairs with at least an 80% coefficient, and a method to identify which pair is strong and which is weak. I buy strength and sell weakness. Achieving around 75% accuracy to date. It is not risk free...no strategy is risk free!Hello. Please excuse me for my newbie question. I want to hedge my forex positions (i.e buy or sell ) with other financial instruments with no loss to my capital. Is it possible anyway ? How i can do this if this possible ? Thanks.
I use a Correlation Hedge strategy with a good level of success. It involves two positively correlated pairs with at least an 80% coefficient, and a method to identify which pair is strong and which is weak. I buy strength and sell weakness. Achieving around 75% accuracy to date. It is not risk free...no strategy is risk free!
To each their own, but to me this sounds like 1) you have no conviction to a trade, rather you just want to trade 2) you are doubling your costs by doing this long/short strategy 3) if you want to hedge just hedge in opposite directions and forget about the correlation part. Why don't you just pick a direction based on whatever reasoning you have, set a clear SL/TP level and get out quick if its not going in your direction. This keeps costs down and does about the same thing.