Can you be long and short at same time?

[tar]

but one position will still negate the other so still pointless unless for ease of use.

Agree yes , but i don't want to tamper with my long term position , so i have an account for scalping ... i can see that if someone is doing it that way .

 

[tar]

Yeah, knowing which trend you are trading generally helps

Many daytraders and scalpers keep switching from bullish to bearish in the same session , especially if they are following a MA crossover for example or something similar , keeping a bias during the day would be helpful in my experience .

 

[tar]

Fair enough if its a case of do whatever you have to if it works.
This is surely at odds with preserving capital by not keeping tight
control of costs?

I don't know, maybe costs aren't as big an issue for most people
or they are unaware.
For what I do costs have a significant impact, which is why I can't fathom this thread
Willingly increasing costs just seems bizarre to me...
Wouldn't it be better to work on the psychological aspect that thinks this is of benefit?

Costs are the worst enemy in this game , seriously look at how much you make on average /trade , if it is something like 7 points or less then yes doubling the costs will hurt badly , most daytraders don't average that much/trade ...take a look here on average pips ( advanced mode table ) :

ZuluTrade - Performance

 

[the hare]

Many daytraders and scalpers keep switching from bullish to bearish in the same session , especially if they are following a MA crossover for example or something similar , keeping a bias during the day would be helpful in my experience .

Assuming they get the bias right. Conversely, its unhelpful if they get the bias wrong

Anyway, enough of these trading gems, I'm back in lulz mode

 

[tar]

Assuming they get the bias right. Conversely, its unhelpful if they get the bias wrong

Irrelevant for scalpers , you will have moves both directions during the day , the idea is to concentrate on your setups in one direction and avoid confusion , i found it very helpful ...

 

[the hare]

Just out if interest, what's your definition of a scalper ?

 

[tar]

Just out if interest, what's your definition of a scalper ?

Its a loose term , but i guess many will agree if it was based on 5/1 min charts then it is scalping ...

 

[barjon]

The tactics are worthless because they cost you the spread slippage commission x 2 for no advantage. Just run through a few examples with 1 point spread and you will see why its worthless. Over time it will cost you money.

cable

No, the tactics are not about being long and short at the same time, but about how you might play it when you were. Read my post again to refresh your memory http://www.trade2win.com/boards/dis...-you-long-short-same-time-26.html#post2144374 ).

Surely, the answer is that that you effectively open a new position from being flat - as you and everyone keep rightly pointing out - and the tactics are no more, or no less, worthwhile than if I had asked the question as a straight trading one. "Is chasing momentum with a tight stop worthwhile". Similarly, if you played it all as straight trades by closing off the initial long and then opening a new "momentum" trade there is no less cost involved other than the costs of overnight carry whilst you are flat with the long/short.

The point I was labouring towards is that by going short you have effectively closed your long position at the price, but you have left yourself with two open trades. You MUST deal with those trades at some time and you may be able to do so with further advantage to your balance. Whether you think of it as part of the original deal (sort of, long trade closed but not finalised) or a new trade is immaterial.

 

[cablemonster]

Breathtaking!

 

[tar]

Nobody mentioned this strategy : going long and short from the get go

 

[the hare]

Breathtaking!

This actually raises some very serious issues.

When the moderators and staff of a commercial trading forum are advocating, and strongly arguing for methods that increase transaction costs, you really do have to ask is there an ulterior motive ?

The NFA considered this issue in the US and legislation was changed to protect retail clients.

We have a ridiculous situation where a staff from a NFA registered business are attempting to convince retail clients in the UK to act in a manner that's prejudicial to their interests.

Quite seriously, its time to escalate this matter and end this nonsense.

 

[barjon]

This actually raises some very serious issues.

When the moderators and staff of a commercial trading forum are advocating, and strongly arguing for methods that increase transaction costs, you really do have to ask is there an ulterior motive ?

The NFA considered this issue in the US and legislation was changed to protect retail clients.

We have a ridiculous situation where a staff from a NFA registered business are attempting to convince retail clients in the UK to act in a manner that's prejudicial to their interests.

Quite seriously, its time to escalate this matter and end this nonsense.

So would you care to expose the flaw in what I have said in post 249 above? Or to explain how transaction costs are increased beyond the cost of overnight carry?

On the way you might also point out where I have "advocated" going long and short at the same time? I have merely pointed out a scenario where such a thing could be used whilst, all the time, understanding and accepting the valid points made.

It's called debate you know and what will persuade or dissuade "retail clients" is not cries of "nonsense", but reasoned argument and counter-argument.

 

[the hare]

It's called debate you know and what will persuade or dissuade "retail clients" is not cries of "nonsense", but reasoned argument and counter-argument.

As you very well know US retail clients where prevented from engaging in this "nonsense" due to changes in legislation.

One of the primary reasons for those changes was that "nedging" was detrimental to the clients financial interests. Brokers who offered the facility where dreamed to be exploiting their clients ignorance.

You can twist and turn as much as you like, but a member of t2w's staff responsible for content has argued the possible benefits of a method that increases transaction costs, and which has be outlawed in the USA.

Its inevitable that these questions are going to be asked under the circumstances

 

[barjon]

Where are the increased transaction costs in what I said in post 249?

1. As long/short

open short = transaction cost (TC)
later, close original long = TC
finally, cover short = (TC)

total 3TC

or

open short = transaction cost (TC)
later, cover short = TC
finally, close original long = (TC)

total 3TC

2. As separate trades

close original long = TC
open new momentum trade (long or short) = TC
close momentum trade = TC

total 3TC

 

[cablemonster]

Where are the increased transaction costs in what I said in post 249?

1. As long/short

open short = transaction cost (TC)
later, close original long = TC
finally, cover short = (TC)

total 3TC

or

open short = transaction cost (TC)
later, cover short = TC
finally, close original long = (TC)

total 3TC

2. As separate trades

close original long = TC
open new momentum trade (long or short) = TC
close momentum trade = TC

total 3TC

aha the penny will drop soon. What about the scenario where you go short (to get flat) but price carries on north and you realise you dont want to get short. You then have to close both trades or just the short if you want to get long. One of these involves paying an extra set of commish/slippage/spread. I know you are going to say 'well I will close the short to go long then' but this is quite absurd.

by the way my long short on the FTSE I opened at 8am is still down twice the spread

 

[Hakuna Matata]

Right: for the sake of argument let's assume the price of cable is as follows at the respective time shown:


11:00 - 1.5999 / 1.6001
12:00 - 1.6009 / 1.6011
13:00 - 1.6004 / 1.6006

Now, we go long at 11:00, and Sell at 12:00 - our profit is: -1.6001 (cost of buying cable) + 1.6009 (proceeds from selling cable) = +8 pips

Instead, let's "hedge" our long trade at 12:00...

-1.6001 (cost of buying cable) + 1.6009 (proceeds of shorting cable)...

And, after an hour, decide that the move is finished so we close our original long position as well as covering our hedge

... +1.6004 (proceeds of selling cable from original long) - 1.6006 (cost of covering our short cable hedge) = +6 pips.


So, quelle surpirse, entering the additional trade has cost you the spread (2 pips)

 

[barjon]

aha the penny will drop soon. What about the scenario where you go short (to get flat) but price carries on north and you realise you dont want to get short. You then have to close both trades or just the short if you want to get long. One of these involves paying an extra set of commish/slippage/spread. I know you are going to say 'well I will close the short to go long then' but this is quite absurd.

by the way my long short on the FTSE I opened at 8am is still down twice the spread

cable

All I am saying that it is a way of taking your profit and continuing to play the same instrument in a way that you might not do if waiting for your usual set ups (if you play momentum in this way as your normal method you wouldn't bother).

As well as equities I also pair trade ftse/dow trying to exploit the change in the relative difference between them. So I will be long ftse and short dow or short ftse and long dow. When it comes time to exit, if the markets are going down I will exit the long trade first and hang on to the short if it keeps going (and cover speedily if it doesn't) - vice versa if the markets are going up. I have merely suggested something similar.

 

[barjon]

Right: for the sake of argument let's assume the price of cable is as follows at the respective time shown:


11:00 - 1.5999 / 1.6001
12:00 - 1.6009 / 1.6011
13:00 - 1.6004 / 1.6006

Now, we go long at 11:00, and Sell at 12:00 - our profit is: -1.6001 (cost of buying cable) + 1.6009 (proceeds from selling cable) = +8 pips

Instead, let's "hedge" our long trade at 12:00...

-1.6001 (cost of buying cable) + 1.6009 (proceeds of shorting cable)...

And, after an hour, decide that the move is finished so we close our original long position as well as covering our hedge

... +1.6004 (proceeds of selling cable from original long) - 1.6006 (cost of covering our short cable hedge) = +6 pips.


So, quelle surpirse, entering the additional trade has cost you the spread (2 pips)

no surprise there, HM, but that's not what I was suggesting - see reply to cable.

 

[Shakone]

Barjon, with 'hedging', there are scenarios where you will come out the same as just normally closing the position. There are scenarios where this 'hedging' will cause increased transaction costs. BUT, there is no scenario where you come out better by 'hedging'. So in summary, it is sometimes worse, and never better. Why would you want to do that?

Also, why is the hare banned?

 

[barjon]

.......... BUT, there is no scenario where you come out better by 'hedging'.................

well, that's the point we disagree on as I've tried to explain.