Can you be long and short at same time?

[Gregpearce32]

I follow solely usdjpy on m1 timeframe,
If i take long term long position at bottom of range market,
Can you take short positions while markets take small downmoves within the range?
(I use mt4 with Alpari)

Any advice would be great
Greg

 

[Splitlink]

My SB does not allow that but could you trade a different calendar on the futures? ie. trade long spot and short June or August future, perhaps. Although there may be a difference in price level, there may be the same price movement.

Margins and spreads could be different, though.

 

[Dinos]

IG allow you do it, there a box on the deal tickets called "force through", enables you to be long and short positions together.

 

[Lord Flasheart]

I follow solely usdjpy on m1 timeframe,
If i take long term long position at bottom of range market,
Can you take short positions while markets take small downmoves within the range?
(I use mt4 with Alpari)

Any advice would be great
Greg

There is absolutely no point if unless you are trading different futures contracts.
If you are trading 1m then its a complete waste of time. If you are 1 short and 1 long your net +/1 will never change and you pay an extra spread for the privilege. Think of it as betting £5 on black and £5 on red.

 

[graydrake]

Sorry, but I am in total disaggreement with most of the posts here.

I go bull and bear on the same ticker all the time - it is an iron condor. If you have a flat chart, you can enter a bull put vertical spread with 10% downside protection and bear call vertcial spread with 10% upside protection, in a single trade.

This means as long as the ticker movers less than 10% either up or down, the positions expire with maximum profit.

An outstanding strategy with certain ticker patterns.

Drake

 

[Lord Flasheart]

what instrument are you trading and how can you gain by this,you might as well just have one position.The moment you enter a trade the opposite way it totally negates the position if you are using the same instrument and broker,totally no point,period

 

[Lord Flasheart]

please give an example of what you do and include the prices,thanks

 

[Pi3141]

Lord Flasheart I think graydrake is referring to an options strategy that aims to trade volatility rather than the direction of the market.

I dont know if Gregpearce32 is trading options but if he is just trading normally (outrights) then you're right it is pointless to be both long and short.

 

[timsk]

The moment you enter a trade the opposite way it totally negates the position if you are using the same instrument and broker,totally no point,period

Hi Flash,
Whilst I take your general point and agree that your observation would apply to most people, I think there are possible merits in it and am actively experimenting doing just as you describe.

What I'm trying to do is to trade a longer timeframe and, simultaneously, trade any pullbacks in a shorter timeframe. This puts me long and short at the same time on the same - or highly correlated - instrument(s). It's a hedging strategy of sorts, the benefit of which is that I don't need to use stops (other than 'cato' stops) and, I have the potential to turn a profit on the pullbacks as well as the main trend. I admit that putting it into practice isn't as easy as I make the theory sound, but I think the idea has merit and will continue with my experiments on a demo account.
Tim.

 

[Splitlink]

Lord Flasheart I think graydrake is referring to an options strategy that aims to trade volatility rather than the direction of the market.

I dont know if Gregpearce32 is trading options but if he is just trading normally (outrights) then you're right it is pointless to be both long and short.

I was answering the question literally. Nevertheless, it does seem pointless unless one is an option trader and then only covered options. This is just a personal view which I would follow on my own account. Whether it is right, or not, I don't know.

 

[graydrake]

what instrument are you trading and how can you gain by this,you might as well just have one position.The moment you enter a trade the opposite way it totally negates the position if you are using the same instrument and broker,totally no point,period

I trade primarily options on stocks in the US markets.

Assume a stock is trading 100 - and you expect the stock will trade in a narrow range until optioun expiration. You sell a bear call vertical at 110/115 amd sell a bull put vertical at 85/90. As long at the ticker price stays between 90 and 110 at expiration, you keep the premium on both trades.

The advantage here over a single trade is that if the stock moves out of your projected range, you will always be a winner on one of the two spreads, so the max loss is reduced if you are wrong by the value of the winner. If you wanted to risk the same amount on 2 trades in one direction and you are wroing, your loss is much greater.

I am trying to start a thread on trading High Probability Credit Spreads, but have not had many people signing up. If interested go to Trading Systems to find this thread.

Drake

 

[Lax_Van_Dumb]

Being long ad short simultaneously is often used in commodities trading where the trader is planning to capitalise on the change in the spread.Very effective technique if you understand the particular market eg Corn you could go long the september contract then short the December contract.

Trading mushrooms is the only way forward#

 

[Lord Flasheart]

Hi Flash,
Whilst I take your general point and agree that your observation would apply to most people, I think there are possible merits in it and am actively experimenting doing just as you describe.

What I'm trying to do is to trade a longer timeframe and, simultaneously, trade any pullbacks in a shorter timeframe. This puts me long and short at the same time on the same - or highly correlated - instrument(s). It's a hedging strategy of sorts, the benefit of which is that I don't need to use stops (other than 'cato' stops) and, I have the potential to turn a profit on the pullbacks as well as the main trend. I admit that putting it into practice isn't as easy as I make the theory sound, but I think the idea has merit and will continue with my experiments on a demo account.
Tim.

Tim

How can this benefit you,if you go long and then add in a short then you are flat whatever the movement so whats the point. If you are trading the pullbacks you might as get out the short and just take the long. If it continues down you are just flat for the trade. Ive got to say I cant believe a Man of your knowledge can see anything else.Sorry for being blunt. As the other guy said he must be trading options in which case there might be some merit with time value etc

 

[Lord Flasheart]

Being long ad short simultaneously is often used in commodities trading where the trader is planning to capitalise on the change in the spread.Very effective technique if you understand the particular market eg Corn you could go long the september contract then short the December contract.

Trading mushrooms is the only way forward#

yes that is possible as mentioned if it is different contracts,but we are talking about the same

 

[graydrake]

Tim

How can this benefit you,if you go long and then add in a short then you are flat whatever the movement so whats the point. If you are trading the pullbacks you might as get out the short and just take the long. If it continues down you are just flat for the trade. Ive got to say I cant believe a Man of your knowledge can see anything else.Sorry for being blunt. As the other guy said he must be trading options in which case there might be some merit with time value etc

Flash this is a calendar spread. Check the published definitions and advantages.

Drake

 

[Lord Flasheart]

Flash this is a calendar spread. Check the published definitions and advantages.

Drake

that can work then. The initial post did not say that

 

[timsk]

How can this benefit you,if you go long and then add in a short then you are flat whatever the movement so whats the point.

Hi Flash,
Potentially, it can be of benefit in a number of ways . . .

1. As I mentioned in my last post, it obviates the need for stops, which are the bane of most traders lives. (Please note: I'm saying this as an ordinary member - not with my T2W hat on. I would not recommend this to newbies for whom stops are essential.)
2. Positions equally weighted on both long and short legs of the trade will protect you from any losses when no clear direction is indicated. As and when the market makes its move, you have the option to adjust your weighting on either side of the scales so to speak. You literally have double the number of options at your disposal, as you can add or reduce your position size on both legs of the trade.
3. It enables you to average into a position without incurring additional risk. I'm loathed to recommend other sites (hope Steve isn't reading this thread or I'll be in trouble, lol) but there's a thread on ET that discusses this in some detail that's worth a gander IMO: Averaging Down

As I say, I'm just experimenting with a demo account at the moment. So far, what I like most about is that it's a much more relaxed way to trade. How many times have we panicked and got out of a trade too soon, or hung on for even more profit and ended up giving profits back to the market? Opening an opposing position gives you time and breathing space without having to close out your main position.

Have a good weekend all.
Tim.

 

[malaguti]

As I say, I'm just experimenting with a demo account at the moment. So far, what I like most about is that it's a much more relaxed way to trade. How many times have we panicked and got out of a trade too soon, or hung on for even more profit and ended up giving profits back to the market? Opening an opposing position gives you breathing space without have to close your main position.

Tim.

Hey Tim, help me out here if you would..I've always thought it could be a really useful way, but at some point in time, you have to exit one or both of these, so you can either be nett zero (which doesnt really help, as you would most likely have incurred charges) or one of them has to be at a loss.
Lets say I short the FTSE at 6000, and immediately I enter one in the opposite direction..so price drops down to 5900, you are nett zero, having incurred a charge. You close your long as you are super confident its going down, so you incur a 100 loss, and an open profit of 100..now prices start retracing. Your profit is going down, incurring a loss regardless.
I can never get my head around the benefit, unless your timing was right to begin with, in which case your stop would have been just as effective
Am I making sense?

 

[Shakone]

Hi Flash,
Potentially, it can be of benefit in a number of ways . . .

1. As I mentioned in my last post, it obviates the need for stops, which are the bane of most traders lives. (Please note: I'm saying this as an ordinary member - not with my T2W hat on. I would not recommend this to newbies for whom stops are essential.)
2. Positions equally weighted on both long and short legs of the trade will protect you from any losses when no clear direction is indicated. As and when the market makes its move, you have the option to adjust your weighting on either side of the scales so to speak. You literally have double the number of options at your disposal, as you can add or reduce your position size on both legs of the trade.
3. It enables you to average into a position without incurring additional risk. I'm loathed to recommend other sites (hope Steve isn't reading this thread or I'll be in trouble, lol) but there's a thread on ET that discusses this in some detail that's worth a gander IMO: Averaging Down

As I say, I'm just experimenting with a demo account at the moment. So far, what I like most about is that it's a much more relaxed way to trade. How many times have we panicked and got out of a trade too soon, or hung on for even more profit and ended up giving profits back to the market? Opening an opposing position gives you time and breathing space without having to close out your main position.

Have a good weekend all.
Tim.

No stops, averaging down...what's going on here? :cheesy:

Going long and short the same underlying instrument with the same size, is being flat. There's no other way to spin it. Options trades with different strikes are a different issue, that's being long one instrument short another. Long and short different expiries, calendar spreads...again trading two different instruments.

Surely this debate has been done to death. If you think being flat (sorry being long and short at the same time) is going to help you make money, you're just kidding yourselves.

 

[timsk]

. . . Surely this debate has been done to death. If you think being flat (sorry being long and short at the same time) is going to help you make money, you're just kidding yourselves.

Hi Shakone,
Well, it's been done to death in as much as the same basic points have been made time and time again - such as the second sentence of yours that I've quoted - with which I completely agree!

Tim.