Trades closed overnight. How?

compu-forex

Sergeant
Messages
120
As others have mentioned, you were exposed to the overnight spread. GBPUSD can easily run to 20 or 30 pips. When you are hedged, you have double exposure without realising it.

I don't know what strategy you are trading but some words of wisdom :-

1. Hedging is one of the most useless strategies that exists in trading.
2. ANY hedge position can be resolved into 1 single trade.
3. Opening a hedge trade doubles your spread cost + commission(unless you use advanced closing strategies like Multiple Close By, which is unlikely). In your case, if you had simply closed your original trade, you would not have blown your account.
4. A hedged trade goes nowhere. If you have a trade running at a loss, you cannot "protect" the trade by hedging it. Once you hedge a trade, you may just as well have closed it because you have put yourself into a corner. The swaps will eat your account whilst you figure out what to do about the corner you are stuck in. In the meantime, your equity will be diminishing and you will be worse off that if you had just closed the original trade.

In short don't hedge. The only time you could use hedging is when it happens unintentionally using multiple strategies that have their own individual trades, so it's not actually hedging.
 
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