Is this strategy possible?

[eddiea6987]

ok sooo this is what im thinking... and dont kill me for this because i have never traded in my life and this is probably why heheh but anyways,
lets say im at the peak of an un trend and im holding no positions and lets say for some reason i think this trend is going to stop and reverse
why not buy 1 stock/contract/cow/baseballCard what ever it is you trade just in case the trend keeps going up, and short one stock/contract etc incase it downtrends?
and when you realize that infact its downtrending sell the Long stock and you loss would be zero and your profit for the short stock would also be zero but it would be like you jumped into the downtrend a bit later and keep riding it untill you have made desired profit? and vise versa for an up trend..? did i make my self clear?

theonly problem i see is that you would have to have 2 accounts because the second you buy a contract and then sell another one im guesing they sell the one you bought so your basically back at square one so is it possible to have to seprate trades at once going oppisite directions to see which one plays out and exiting one but the losses from one would be offset by the profits by the other being that they were enterred at the same time...?

 

[eddiea6987]

<--see it says rookie

 

[Bolimomo]

why not buy 1 stock/contract/cow/baseballCard what ever it is you trade just in case the trend keeps going up, and short one stock/contract etc incase it downtrends?

So basically you are selling the stock to yourself (from account #1 to account #2).

It might work if:

1. You see a consolidation before your order entry. Your assumption is that price will be up or down, one way or the other. And when it does, price movements will be quick.
2. You set equal distance stop orders for both your long and short trade. You get out of the loser but "let the profit run".
3. Hopefully you can overcome the spread, slipperage and commissions.

There are option spread strategies that work on this principle.

 

[everyonerich]

ok sooo this is what im thinking... and dont kill me for this because i have never traded in my life and this is probably why heheh but anyways,
lets say im at the peak of an un trend and im holding no positions and lets say for some reason i think this trend is going to stop and reverse
why not buy 1 stock/contract/cow/baseballCard what ever it is you trade just in case the trend keeps going up, and short one stock/contract etc incase it downtrends?
and when you realize that infact its downtrending sell the Long stock and you loss would be zero and your profit for the short stock would also be zero but it would be like you jumped into the downtrend a bit later and keep riding it untill you have made desired profit? and vise versa for an up trend..? did i make my self clear?

theonly problem i see is that you would have to have 2 accounts because the second you buy a contract and then sell another one im guesing they sell the one you bought so your basically back at square one so is it possible to have to seprate trades at once going oppisite directions to see which one plays out and exiting one but the losses from one would be offset by the profits by the other being that they were enterred at the same time...?

i have highlight your text with red color :

1.) what you're saying actually is complete imagination, well.. im not blaming you about this, everyone allows to have their hypothetical view with the market. but usually these type of judgement is the major cause why people losing, but probably not all either.

2.) try to clearly define your 'view' of downtrend first

3.) if you will going long and short at the same time, then later if market goes down and only then you will short again? am i getting this right? if thats so.. then why dont you just put an arrow or lines on the chart & marks the candle/bar which you went long + short, after you spot your trend, only then you really enter the trade afterwards? dont you think this is a bit better?

 

[eddiea6987]

yeah i guess its just my imagination running wild there, it was just a thought though nothing serious

 

[Wendz]

Hi Eddie, been trading(spread betting after work london time 9pm-5am) for two weeks now and have lost around £120 (mainly due to trades of £1/pt) . I have only been fx trading the GBP/USD and my strategy is exactly as you mentioned above, i would watch the 1 day/ 1sec and 2 day/ 1hr charts for about 5-10mins before placing a trade. I would place three trend lines, highest peak/ lowest peak and a middle line on the graphs.
Using the highest peak i would add 10pts and set a stop loss for shorting and vice versa for buying using the lowest peak. I would then simultaneously place the two trades of £1/pt with stop losses being say 30pts away in either direction (£60 deposit = total gauranteed stop loss). At the same time i would ask to end my trade should i pass 35pts in either direction which mean't £5 growth each time. The main problem i had was the spread between the buying and selling prices (3pts). This mean't inorder to make £5 profit the trade would require 8pts passed a stop loss, so i was already in a loss position at the start of my simultaneuos trades. Unfortunately i haven't been succesful using this strategy because of the movement of the market between 9pm and 5am.
I started using this strategy because it kinda gave me "peace of mind" that a certain trend would continue by at least 8pts if it breached the previous three high or low peaks, which hardly happened due to the hours i was trading.
If you were going to try this strategy i would recommend doing it at about 7am, 11am, 3pm and maybe 7pm for GBP/USD. Those are roughly the best times for when the peaks are frequent and unfortunately for me i can't access a computer at those hours. Goodluck with your trading and keep us posted.

 

[rathcoole_exile]

Hi Eddie, been trading(spread betting after work london time 9pm-5am) for two weeks now and have lost around £120 (mainly due to trades of £1/pt) . I have only been fx trading the GBP/USD and my strategy is exactly as you mentioned above, i would watch the 1 day/ 1sec and 2 day/ 1hr charts for about 5-10mins before placing a trade. I would place three trend lines, highest peak/ lowest peak and a middle line on the graphs.
Using the highest peak i would add 10pts and set a stop loss for shorting and vice versa for buying using the lowest peak. I would then simultaneously place the two trades of £1/pt with stop losses being say 30pts away in either direction (£60 deposit = total gauranteed stop loss). At the same time i would ask to end my trade should i pass 35pts in either direction which mean't £5 growth each time. The main problem i had was the spread between the buying and selling prices (3pts). This mean't inorder to make £5 profit the trade would require 8pts passed a stop loss, so i was already in a loss position at the start of my simultaneuos trades. Unfortunately i haven't been succesful using this strategy because of the movement of the market between 9pm and 5am.
I started using this strategy because it kinda gave me "peace of mind" that a certain trend would continue by at least 8pts if it breached the previous three high or low peaks, which hardly happened due to the hours i was trading.
If you were going to try this strategy i would recommend doing it at about 7am, 11am, 3pm and maybe 7pm for GBP/USD. Those are roughly the best times for when the peaks are frequent and unfortunately for me i can't access a computer at those hours. Goodluck with your trading and keep us posted.

Wendz,
just a friendly tip.

it's much easier

to read posts

that have

plenty of white space

rather than

something

that looks like your

last physics essay.

welcome, by the way, to T2W

 

[Splitlink]

Hi Wendz,

Forex isn't my strong point, although I do some, but I would trade an exchange that is open. How about looking at Yen/AUD/NZD ? One of those might suit you better.

 

[Wendz]

Thanks for the tip Rathcoole...

Splitlink thanks for the advice too, i looked at those currencies on my trading platform but unfortunately the minimum number of pts needed for my deposit outweighs my capital whereas at the moment I'm comfortable trading the GBP/USD.

I just discovered i can order at a specific level to open a trade so i'm going to try that strategy this coming week.

 

[jaet1989]

ok sooo this is what im thinking... and dont kill me for this because i have never traded in my life and this is probably why heheh but anyways,
lets say im at the peak of an un trend and im holding no positions and lets say for some reason i think this trend is going to stop and reverse
why not buy 1 stock/contract/cow/baseballCard what ever it is you trade just in case the trend keeps going up, and short one stock/contract etc incase it downtrends?
and when you realize that infact its downtrending sell the Long stock and you loss would be zero and your profit for the short stock would also be zero but it would be like you jumped into the downtrend a bit later and keep riding it untill you have made desired profit? and vise versa for an up trend..? did i make my self clear?

I would look at various timeframes and look where the market is heading.

 

[alphamaster22]

That is a possible way to play the game and win. Its called hedging, and I had my go at it back in my discretionary days with some profitable trades. It still boils down to how you determine the trend or a change in the trend on whatever time frame you are trading. This will let you know when to close out one of the open positions and keep the one you believe is in the direction of the new trend open. Basically, to answer your question YES the strategy is very possible, but it will take some good analyzing and testing to make it work for yourself.

 

[Calinor]

why not buy 1 stock/contract/cow/baseballCard what ever it is you trade just in case the trend keeps going up, and short one stock/contract etc incase it downtrends?

Why not wait until you see that it has reversed and is downtrending (this is not as easy as you'd imagine), and then short. By going long and short, you have no position, and are just paying the spreads/commissions for no reason. By waiting, you would save yourself these costs.