Forex Hedging Strategy Explained | From Novice To Master Nov 2025

Right. So today's call is going to be about hedging. The advantages, disadvantages, how to do it, the safest way to do it and.

How I do it, how I think. For me it's the safest way. Not a financial advisor. This is not trading advice. This is just me sharing how I do things. It may not fit into your risk management and you need to then figure out how best to hedge for yourself. Just want to set up my phone again and get it to the correct place and then we can connect again and get started. Great. Okay. So I had an interesting question this morning from a client who's got a very big account and the question was.

What is the advantage of hedging and why does one do it? Okay, so it's a great question. So let's say let me do it here rather right at an all time high. Let me do it there. Right, Cool.

Okay. It's better. I like to do things on my phone. It's just easier for me to manage.

What does that, how to do that. Okay, Can I press Enter? Great. Okay, cool. Right. So.

This is how hedging is supposed to work for Alan. This is. Let me delete that. Let's rather use this. Okay. This is candle one, this is candle two. Two.

That is opened below the atm. Sorry. This is candle one, this is candle two. Don't know why it says two there. Let's do one and let's do two. Okay, cool. All right, so.

Let'S expand this. Everything's in disarray this morning because I had to actually reformat my Mac. It was so slow. Right. So I like to hedge. I know.

Generally speaking that the trend has reversed when either the second candle is above or below the 8 EMA. I don't really like to take short positions on gold because gold is a storage of value. That means it is always going to be increasing in price. And if you're taking short positions, especially at the bottom of a trend, you probably going to be stuck.

I'm probably going to be stuck in that. With that sell trade can be for weeks or months. Like this trade over here. I've been holding it since April. Lucky for us, we don't pay swap fees. If you are paying swap fees, you need to get hold of me and we can eliminate all the swap fees for you. Side note, swap fee is a charge that the broker charges you for holding a trade over a 24 hour period. So as you can see here, no swap fees. Now.

I this, my robot hedged, but it was right at the Bottom of the trend. And I actually thought that the trend was going to go south. I was listening to other people at that stage stage and trying out a new strategy, learning supply and demand zones.

I'm a very fast learner and I take knowledge on very quickly. And because I've been trading for such a long time, I worked out that that strategy that I was following or learning was not the correct way to actually draw supply and demand zones. But I still think the price is going to reverse there and I'll be able to then close out this trade maybe with a 500 loss or zero. It's important for me to tell you everything so that you can understand why I do things and the strategy that I use. Then I'm going to go into questions and answers afterwards. Okay. So I'm just waiting for the price to come down. It started to come down and the reason I haven't closed it yet is because I still feel that gold is going to reduce in value until February. Just my own opinion. I could be wrong, but that's what history has told us. And it's such a small trade for me that I don't really mind. It's, it's. I don't know as a percentage, what is that of the account? 60,000. You guys work it out and then let me know. So.

What? So the second candle opens below the atma. For me, that is the correct time to open a hedge. Now a lot of you are using either the eight EMA indicator, my indicator, my paid indicator which has a hedge functionality built into it, or you using the ea so they both have the same functionalities. So when you look at.

When you look at.

The.

Hedge settings of the robot, it's in section 10.

Just get down here.

You have options. You can either hedge buy trades or you can hedge sell trades or you can.

Let the robot decide what it needs to hedge. The functionality also has is available for you to hedge manual trades as well, which is called hedge non rule 2.

Non rule 2. There it is. Hedge non rule 2 trade. So though that means anything that.

You use on your account other than my EA. Maybe you've downloaded MetaTrader 4 on your personal computer terminal at home and you're running a secondary ea. This functionality will then hedge those trades and as well if you wanted to, just a side note. So let's just go through the different ways that you can hedge. Now the reason I do this hedging the way I've done it is because which is at drawdown, the default and my presets are set to hedge at drawdown. I've done that specifically because most of the traders here don't understand hedging and they don't understand the benefit, the advantages and the disadvantages of hedging. So I've said, all right, let's rather do it at a drawdown, which normally we don't get to. But on the side note, being hedged is 100% a certainty. You need to get over that fact or you need to change your trading strategy and go back to using.

Your, your usual methodology of trading. The hedge is an advantage. Okay. What it does is it freezes your account if done correctly. So if we go to the phone now and we look at the trades. Let, let's go over here. Let's go.

Let me open up a new vps and actually like working on my live account.

Okay, there we go. Okay. Right. So let's do it together. Okay.

Incoming.

The robot with a high lot size. And then I can show you why it's a great idea to hedge. So we're going to do.

Automated lots and we're going to set this at a 20 lot, which is massive. So we're going to do eye exposure. I like to change my color to white. What this indicator does is it tells you what your net lots are. I don't know why it's hedged. Something wrong here. I don't know what it's using the, the.

Creating new bars.

For some reason, this draw. Oh no, it's this.

Okay, cool.

No, that's not right. So this floor has been fixed. Let me explain to you what's going on so that you know, okay? If you use the same magic numbers in your hedges, the robot continues to open up trades until you run out of equity. So you must make. We have fixed it on the new version, but make sure that your hedge magic numbers are different to your buy and your sell lots. Okay, so I'm just going to click on. Ok, pause the robot and close out all my trades so that we can do this again properly. Okay, there we go. No, switch on.

There it is. There's the cell. Okay, we are now hedged. Now look here. Look at your drawdown. These numbers are moving, but your drawdown is frozen. Now the reason it's frozen currently is because the, if we look at the.

The phone.

And we go here, the spread is 4.4. When the spread widens, your drawdown will start fluctuating. And that happens obviously, because the buy and the sell is different now to where these hedges were placed. So now There's a discrepancy. It's only like 15 cents per lot. This is actually 44 cents per lot. Okay. That's what this is, that's what this means. It's $0.44 per 0.01 lots. If you go to a 1 minute chart, you'll see it where there is a difference between the red line and the white line. It's the bid and the, the better in the ask. Okay, There, okay. And you can see there, 96 minus 35 is 44 cents. Now do you understand that part?

This is where you guys need to be interactive with me. When I say, do you understand? You need to be answering me so that I know that you understand exactly what we're doing. Okay?

Yes, understand.

Thanks.

Cool. No problem. Okay, so we go back to the 15 minute chart. That's where we were trading. And we can see here that we have be it opened another hedge because I changed time frames. If I change the time frames again, it will open another hit. So I'm just going to.

26, 25.

It's by, by sell. So we'll just close these out.

Okay. It's because the reason it's doing that, it's a replacement trade because I've got replacement trades on true. So immediate execution. Let's just change that to false. Click on. Ok, no trade will open. I'll close this out and no trade will open. And now we're still 100% hedged. Okay. This is where understanding the robot is critical. Why trades are opening and how to save your account and not get into more trouble. Especially when you're under pressure. Because when you get hedged or when your drawdown starts to get high, you start getting pressurized and then you forget shits. And you don't. Your brain doesn't function like it should. You think things are slowing down, but your mind is so mixed up and you're not quite sure how to do things. You need to understand these settings very, very.

Very, very well so that you don't get yourself into, into trouble. Right? So to get back to the hedging strategy, the second candle has opened theoretically in our example below the atma here. Okay. Now with such large candles, the chances of the price going further south are very high. Now you, you don't have to hedge a hundred percent, you can hedge 25%. And that's what the robot has that functionality in it. So if you want to, you can go down to section 10 and yeah, you can set this over here, the multiplier, this multiplier to 0.25. That means that the robot, when it's time to hedge, is going to hedge only 25%. Okay? And then you can change this to true, your secondary drawdown to, let's say.

Do it at drawdown, and you do it at 25%, 25%, and hedge drawdown.

Percentage. So, yes, it's right. We wanted that percentage. So we wanted at 0.06%. Okay, so we'll do that again. Just let me change the lot sizes here.

So that we can speed the hedging process up. Mm, 20.

Mm, 21. Okay, cool. Great. So we'll close out these trays.

And there's the one, I don't know what's opening. A one, a one lot.

There it is. Okay, so there's your first hedge.

Which is 25% of the one lot. And then the second hedge kicked in almost immediately because your drawdown is above 0.06. So now you have a second hedge, okay, of 25%.

So now you're hedged 50%.

And this you can do at various different drawdowns. So maybe when your drawdown gets to, I don't know, I don't know what your comfortable position is.5%, 10%, you can then start staggering your hedges. And then if the price retraces or when the second candle opens above the atma, you're not stuck with a massive hedge right at the bottom because you got it wrong. Let me give you the example so that you understand. Okay? So this is the point at which the robot hedge, second candle opens below the Atma. Okay? Only 25% of your lots got hedged when the second candle opened below the Atma. Then you set your secondary hedge to. To hedge at a, let's say, another 25. So maybe your second hedge kicks in when your drawdown gets to there. And then what happens is, let's say hypothetically. So let's say your secondary hedge kicked in there, right? So there's your trade, okay? Then you have your. Your atma.

Okay? This is your atma and your eight. The. The atma catches up. And then let's say hypothetically, you get. You get a green candle. You get one green candle, and then you get a second green candle and a third green candle. Now, this trade, this sell trade is in a negative, but it's only 25% of your lot sizes, so it's not such a train smash. And this trade over here is in positive. So your one trade is. Your one hedge is blue and your other trade is red. Are we on the same page?

Yes.

Okay, cool. So what you can do, because the second candle is opened above the atma. This is on a four hour chart. I'm trading on a four hour chart. Okay? I read things on a four hour chart. This is a sell trade. Let me put it there for you.

Cells. So red there's your sell hitch and it is blue, okay? It's in profit. Why? Because it's a sell trade. Okay? And it's in profit because the price is here. Here's the price. Let's put an arrow there so that you can see where I am there.

Okay? At that point, the price is below the. Where the trade open, so it's in profit. Does anybody not understand? It's critical now that you understand so that we can communicate. So everybody understands. Thumbs up, please. Use your emojis or thumbs down. Okay, cool. So now this is my strategy. I close this hedge, it's in profit. I closed this hedge, it's gone. Closed bang, gone. I've made profit. That money is banked.

Okay? My drawdown is, is less. Now what you can do is, is that you can now manage this trade. You can use your profits that you just generated to partially close.

This trade. Let me show you. Okay, so we'll go to the metatrader 4 where we've made profit for today. Okay. Custom. Custom today. I hope we're in profit for the day. Okay, so we've made $256 profit for the day. Don't know why. Right. Okay, cool. So now I can start offsetting.

My hedge. So it was 0.25 lots of cell. So I can now, okay, modify the order. And I can say modify order. Okay. So I can close. Partially close.

I, I want to. You. You can't see this on, on the computer. I don't think so. 0.01. Let's see. Yeah, you see, you can't see this on the, on the comp. On the computer. Give me one second and let me set this up on my phone.

This is the one unfortunate part of.

Of MetaTrader 4. On the computer. You can't see this, right? So here are the trades, okay? So we want to offset one of the trades by X percentage. So here you can change the lot sizes to 0.01. You need to focus here, okay? Because if you get the lot sizes wrong, you can close this trade out in its entirety, which is an error. And I've done that before, lost $35,000. You saw me do it, and I was honest with the community and I Told you what I'd done. I'm human and it happens. You need to be aware that you, that this can happen.

So you need to double check. Don't take drugs, don't drink alcohol.

Do this preferably in the morning when you have your wits about you and you are fresh and you have thought about this, okay? Because this can go wrong quickly. So now we want to understand if we close out 0.01 lots, how much money is that of the profit that I've made? So let's say I've only made $3 on that hedge. This over here tells you what the amount of money you're going to lose on your account when you close out this hedge partially. This is called partial closing of the hedge. Okay? You can't see this amount on MetaTrader 4. If I increase this to let's say 0.01, it changes from $0.05 to $0.50. If I change it to 1, it goes to. Well, I can't because the Trade is only 0.25. Okay? So 0.1 is $0.56. 0.01 is $0.05. So if I close it, the, the what? Look here, watch here, okay? It'll close and it'll say 0.24 close, okay, there, 0.24. So now I've used some of my profit to start closing out that hedge. Now that's in negative.

You need to do this like as fast as possible because when the second candle opens above the atma, you know that the trend is reversed and the price is going to go north. And then that hedge, that sell hitch is just going to go red and it's going to start affecting your equity and you're unhedged because now you've got a sell hedge and you've closed your buy hedge in profit. So you can either close it out 100% or you can close out partially. Or don't close out the buy hedge and rather strip away both at the same time. So let's say you had the buy hedge open, okay? You didn't close the buy hitch because there's the buy hitch. Where's the buy it? Let's say for instance, this is a 0.25 bar trade, okay? So you do the same thing. You say here, 0.01 is equals to 1 1.35 cents. So if you close it, okay, 0.01, your, your, your bar hedge, you're still a hundred percent hedged. So now you stripping away using new profits, you stripping away old trades. This is the safest method for you to save your account. It's a zero sum game. Doing it this way means you don't make profit, you don't make loss, but you've protected your equity. So let's say, for example, you have made $10,000 and now you get hedged at 25% of your account, which means that effectively you're about to lose $2,500 of your profit.

Does anybody here want to lose $2,500 of their profit? Nope. Okay, cool. So that is the advantage of the hedge. The advantage of the hedge is, is that you've protected your account and your profit. Then I instruct my clients that this is what I do. I then, when the second candle opens above the atma, I then set up the robot with new magic numbers and then I use the profit of the new magic numbers to strip away the buy and the sell trades that created that hedge. Or I just strip away the sell.

Because sometimes the price now goes above. And then I've got buy trades that are in profit. Why close them, especially on gold? Because gold is a storage of value and the price is increasing. Let me draw it for you because it's a lot of words. It's a lot of words and I know that. So we need to draw it for you. Okay, so let's say you have a sell hedge down here and you have bar trades here. Okay? These are all bar trades. What color.

What color are these bar trades numbers? What color are they?

They're all negative.

Really. They buy trades.

Okay, so let's understand that because you got lost somewhere. Look where the price is. The price is here. These.

Sorry, I, I thought the price is down at the heat.

No, no, no, no, no, no. So this is negative. This is positive. This is gaining, getting redder and redder. Okay, let's say we're at an all time low.

Okay? Not an all time high. Let's say now the price has come down and we're in a perfect position. The hedging is like a perfect opportunity for you to double, triple, and quadruple your account. You just need to gain confidence. This is why on the videos I say to you guys, hedging is an inevitability. Start messing around with it. Start playing with the hedge, understanding the hedge. On a lot size of 0.03.

It'S.

Can you stomach 0.03?

Is there anybody here that cannot stomach a trade of 0.03 on a cent account?

Can do.

You have to be honest with me now, guys. I'm not here to judge you I'm here to help you. If you, if you, if you're honest with me, I can help you. If you hide your feelings and you hide that, your fear, I can't help you. Okay, so this is a safe space for you to be honest, for you not to feel like you're going to be judged here because you don't understand something. Okay?

Okay, so I get that you, what I'm understanding from you is that everybody is comfortable with a 0.02 lots. Okay, so let's, let's do that. Look here. Okay. Yeah. Your bars in profit, these are all negative. These are your cells, they're negative. So now you can use a bit of profit here to offset some of the cells.

And all you're doing is you protected your capital. You use profit from this to remove this. Your equity doesn't move, your balance doesn't move, your margin percentage goes up because you've got less lot sizes open and your margin level increases and your margin percentage increases because you've got less trades open. So you now the robot can start opening bigger lot sizes. You're making bigger profits per day and you can then start stripping.

Faster and faster. So what seems to be a six month time frame to, to strip the open trades and the sell looks like a six to one year time frame. But as you start stripping with the new profits, the time collapses because the robot is opening bigger lot sizes every time you strip the open bars and sells. But I wouldn't be stripping away from the bars because the bars are in profit. So if the buyers are in profit, these trades here, why close them? It's a huge opportunity, especially being at 3967 and the all time high being at 4, 300.

Who doesn't understand that concept? So you all understand the concept. Johnny has it. Pastor T. Dolan, how's it cause. Okay, talk.

The only problem is when your head is right at the bottom, it doesn't go into profit.

No, it won't. And that's because you're hedging too late. It's not that I know what the challenge is. Okay, this is unfortunately an amateur move. I don't know if you have done this, but I would say 99 of my traders do this. They get hedged over there, their hedge turns blue and then they see the blue and they close it and then they re hedge down here. So they've banked profit, okay? Because they think that the trend is going to reverse. So they close their hedge out, they think. So they close the hedge out. They've made a bit of profit. Then they get jittery because the candle lengthens and then their drawdown increases. And then they re hedge. Then they think again that the price is going to reverse. They going to the. The hedges may be going to go negative or they want to bank that profit because they get excited and they see this profit over here gaining traction, and they want to bank that money not understanding the consequences. So they close it in profit and then they re hedge and they keep on repeating this process until the price really does reverse. And then you've got a trade at the bottom. If this is you, tell me it's you. Okay, it was me.

So I've got that situation. But it's because that wrong setting was on the robot where as it hedged, it kept closing profits and opening new hedges automatically. In that time frame, it did about 10 times. It banked a whole lot of profit. And then.

So that's on MA reversal. On the MA reversal, a close hedge was equals true.

True. Yes.

Okay, cool. So that's unfortunately a user. A user setup error. Unfortunately not understanding what that meant. And it is difficult to understand that because you. You join and you are thinking that this is possibly the best setup. I get that. So it's a tough one for me, and it's a tough one for my clients because.

You'Re paying a subscription and you want to make money as fast as possible, hoping, expecting that the robot has been set up correctly and that you won't be in a situation that is going to be harmful to your account, but retrospectively, Rajiv, okay, you've made a lot of money from those hedges opening and closing, have you not?

Yes.

So why don't you just use that profit and then offset the. The hedge for new clients is not there to make money. The hedge is there to protect your account. That's the sole purpose of the hedge. It's not there to make money at all. For experienced traders, it is an unbelievable opportunity. When you understand, okay, hedge trading properly, you can start using the hedge strategy.

Cheers. Rob. You can start using the hedge strategy to.

Double, triple, and quad, quadruple your account.

Yes. That's what I did. As soon as I realized that and I got back to my desktop that afternoon, I closed half the hedges just with that profit. I didn't close everything because I thought it may be a reversal again. When we had that meeting the other night, I didn't want to be fully exposed to any reversal, so I closed half of all those hedges just with that profit. And that's how I left it till now, until I know further what's happening.

So are you saying that the.

Your thought process and the communication on the group of the reversal happening was correct and now you're stuck with the hedge at the bottom?

I'm stuck with the edge of the bottom, but only half the hedge now because I've used the profits to close half of it. I strip half of it away already because I banked a lot of profit during that hedge.

So are you still left with profit?

I'm still left with profit overall, but I'm just.

No, I'm talking about are you left with profit from the. The profit that was created from the hedges that closed automatically?

Yes, I still have some profit on that. Yes.

So why don't you just use all the profit to reduce that hedge?

So I thought that potentially we're saying on Friday and potentially today there could be a further drop down. So I thought if it sinks down quite low, I don't be fully exposed with my buys. I'll be half exposed with my buys. And I. But I also don't want to wait too long because as the price moves away from the hedge, the cost of closing it will increase. So I'm in that dilemma. Close it quicker. But if there's a reversal now going to the lower three nines, then I don't want to be fully exposed to my buys.

Okay, one second. I want to show you something. I'm just going to unpause. Just stop. Right, so there's two schools of thought here, how to close out. You've got lots of buy trades that if it does reverse, could be quite catastrophic for your account. Okay, so this is a live account. It's got $2,000 in it. My robot is off. And I will now switch my robot on and I will show you what I'm doing in this account. So there's $200.

Deficit. Start the robot. Two trades or three trades will open. And.

Where is this account?

Okay, let me set it up on my. Okay, let's go to a four hour chart.

Go here.

Short window, four hour. Right. Okay. So let's actually in. In large. Okay, so there are gaps here. Okay, there are gaps here at this price here. Quite high up. So whenever I make $5. Okay. Or $10 account history. Let's go to the bottom. Let's go up a bit. This in day order. Yes. There. 393 closed that and. And this one closed it in negative. They high up here. Okay, high up here. What price was it that I closed it four. Bought it at 4,009 one. Let me check that. Bought at 4,091, closed at 4,012. Okay? So that's $80 away. Odd. Okay, so I'm closing those. I'm using profits. I'm closing them because if the price goes against me, I don't want to rack up a huge drawdown, okay. Of whatever. I want to contain my drawdown. And the only way I can contain my drawdown is starting to eliminate some of my buy trades. So I make profit. I'm not hedged on this account, so I'm closing out buy trades at the top when the price, these trades are old or old magic numbers, which I'm leaving. Okay. And that then this account will start looking like my other account, my, this account, my main account, one of the main account that you guys know. Okay. Which is the rule to that one. Okay. Where there's a, there is blue.

I don't ever want to see red again on top here. It's a different psychology. So you need to start strategizing, okay. That you never have red here and it's always blue. And then when you have like a.

An uncomfortable situation.

An inevitable uncomfortable situation of a hedge or something, your psychology is different because it's minuscule in the grand scheme of things.

What, what, what do you feel about what you've learned today?

Yeah, I, I definitely didn't consider the buys, closing those buys because I thought, you know, when I think heads up, I want to, I'll be able to recover those. But yeah, that's a good strategy actually, just to keep the pressure down on not having those very extreme buy trades holding me up.

Yeah, 100. I mean, you gotta try, guys. I never sold this as a hundred percent passive. I never sold this as 100 automated.

I, I hope you concur with that. I hope you don't feel like Martin or myself pulled the wool over your eyes when you got into this program. I think we've both been extremely honest with you and told you this isn't a get rich quick scheme. This is get rich for sure. With the strategy assistant tools, mentors and a community. And that there's no such thing as 100% passive. Not even property is 100% passive. Okay? Not even private equity is 100% passive. You have to manage the people that you have private equity with. Private equity means that when you have lots of money, you invest in companies and you basically sit on the board of directors and then your top level strategy and discuss stuff, but you're still managing with those people, you're not leaving anything to anybody. If you have a property, you don't just give it to the managing agents and say cheers. When they come back to you and say your house needs repairs, you don't say, oh, too bad. If you don't look after the property and you don't attend to breakages, etcetera, you either going to lose your tenant, the managing agent, or the property. All three. It has to be managed. There's no such thing. It is a fallacy. Passive income is a fallacy. I think it should rather be called annuity income rather than passive income.

Does anybody feel like I don't mind being called out if my, if my. If the message that you received is not on point, we need to know, and that's the only way we can improve. Does anybody feel like they've had the wool pulled out over their eyes where they feel like this is not what they signed up for, that this is a lot of management? We never said that this was going to be no management.

It's an open forum, guys. I do not mind being called out on anything. This is what makes us better than anybody else, is that we take responsibility and we're able to have these hard conversations and we want to be called out 100%. We get it wrong, call us out 100%. It's the only way we can improve.

Okay, so does anybody have anything else to add or questions to ask?

I want to just make an observation.

Most clients who find themselves in more trouble than they should be are all saying the same thing.

Oh, but I thought.

The price was going to go this way, or I was hoping the price was going to go that way. So we got to stop. We've got to stop hoping.

Because if we.

If we think and we hope, we may as well go to the casino and hope it's going to land on red.

We got to use the tools that are there to say, well, the chances are that the price is going to go that way, and if it goes that way, then this is what's going to happen. But like a game of chess, I've also got to say, if it doesn't go that way, what are the implications? And we've got the tools. They are all there. They built in. We just need to take the time to study the videos, study them again and again until we understand them properly and we can trade safely.

So I always look at the negative. I'm not really interested in the profits. I'm always interested in what my risk is on the account how much am I going to lose if something goes wrong? What is the risk? To me, a lot of people are not doing that. They're looking at the profit rather than the loss. And I couldn't. We can see that by the metatrader 4 posts on Discord on the testimonials group of your lot sizes and your risk in, in relation to your capital that they, some, some guys are way over leveraged because they are looking at the profits rather than the losses. And I'm very risk averse, okay. Hence my account is blue. So my psychology I think is very different to everybody else's because I have this profitability and I am.

I'm not nervous. Like I've got lots of open trades, guys, lots, lots.

Now if this was your account, okay, and you didn't have the blue, okay, I think it's, it's a totally different psychology then.

Do you agree or do you disagree? Give me your feedback.

So that's what's different with me. But I'm still on this account. I am closing the, the trades out as well. Like here. Okay, There's a big gap here and there's gaps over here where I'm starting to close out those trades in, in a negative. I'm using new profits to close our trades. Yes, we've made some profit today, 57. So it doesn't help me at the moment to close out anything. Okay, Yes, I can close, partially close this out, okay, by $50. So I can close out 20% of this trade. I can do that.

And start getting rid of trades right at the top. 4,151. But if you really think about it, 4,151 is not that bad considering we're at 44,300 and, and everybody's talking about 4,600, 4,800 and 5,000. But from a drawdown perspective on your accounts, if it, if I was in the position where I didn't have blue, I would start definitely using my profits to start eliminating trades. Now there's two ways of doing that. You can do it on a LIFO or a FIFO system. You're all, I'm sure understanding what LIFO is in fifo. For those of you that don't, LIFO is lost in first out. FIFO is first in, first out. So if you're eliminating trades from the top, it is first in, first out basis. So you're closing the trades that are at highest. Now there's a advantage and a disadvantage to that. The disadvantage is, is that when you Close out a trade. You can only close out one trade or half a trade or a quarter of a trade. Now if I did it as last in, first out, as in the closest trades here. So here I could close out two trades and eliminate two of the trades. But we so close to being in profit in those trades. What's the point?

Like, I don't feel that there's a point. So maybe higher up. Okay, maybe like this trade. Okay. 4038. What's the price? It's $30 away. Okay, so this trade we bought at 4, 3, 8 and the price is 4000 currently. So we. $38 still. It's like so close. $38. We have a movement on a daily basis of between 30 and $50. So the chances of these trades going into profit are high.

So there's no point. Okay, so you can choose like up here, up here, you guys have got to choose. And then you can start eliminating some of these trades using new profits with new magic numbers. Because if you close the trade with your existing magic numbers, do you know what happens?

Opens another trade.

Correct. A replacement trade.

So you're not in a better position. You just got a new trade right at the bottom where the price is at. The price falls, that trade's going negative and you've used up margin percentage. So this is why I change magic numbers. And then I start removing trades from old magic numbers with new magic numbers. Then my account is safe and it's slow. Starting to get under control.

So you haven't changed the magic numbers. What happens to the old magic numbers?

They lost. They lost. That's why you've got. Okay, the hedge functionality of global hedging.

It's a live account.

So it won't hedge against those anymore once you change. Because that's not what. You know.

I'll show you now. GTC8036. Okay, cool. You have the setting here. Global. Yes, global. That looks at your entire account, not magic numbers. Magic number is chart specific.

Okay. So if you set it to global that you must do this. Especially if you've changed magic numbers. You can't. You can't do chart lots anymore. Or what you can do is open.

A new chart and with new magic numbers. Rather.

Sorry. Oh, yes.

Does it not have to be on the setting that says hedge non rule two trade?

No, because they are rule two trades.

Okay. Even though they're different.

Correct. So there is a. There is a.

So just dumb this down for me. If you're saying hedge global even though it's different magic numbers. Because it's a rule 2 trade, it'll still hedge that trade.

Say it again.

If you're setting it on global, you've now opened new charts with new magic numbers. You've got trades on your old chart with old magic numbers. If you set it on global, even though it no longer recognizes the old magic numbers, it still recognizes it as a Rule 2 trademark.

Yes.

Okay, thanks.

Okay, so what you can do is you can open up a fifth chart. So some of you don't want to be on your charts. You don't want to be. So you hedged. Okay? And now you open up new charts and your new charts, maybe you want to be hedging those also charts specific. So now how do you deal with your old.

Trades that aren't hedged? Like if there's.

A price spark against you, those trades are going to go negative. But your new charts are set up chart hedge chart specific. And your old trades are going to be lost in the wind and you can, you can land into trouble. So how do you fix that, that problem? How do you overcome that strategy? I want you to answer me. I don't want to be answering. You.

Can use a global hedge. You can open the new magic numbers in a new chart.

No, let me, let me, let me say to you again so that you understand.

You started trading, okay? You had four charts. Each of those charts were set up to maybe chart specific hedging or global hedging on one chart, right? You get hedged. Now you set up four new charts, and you've now set up those four new charts to hedge chart specific. So the old trades.

If something happens to the price and you aren't hedged on those old trades, if something happens to the price, that those old trades are lost trades and your drawdown is going to spike if the price goes against those trades.

So how do you deal now with those old trades if your new charts are.

Set to chart specific?

Do you understand the question?

Yes. And you're saying you don't have all eight charts open. You only got four.

Yeah.

You've only got four charts. Right.

Okay, can you set a manual sell trade acting as a hedge?

Now you're manually trading, so now you have to manually.

Manually manage. Manage that, that hedge.

So that's the incorrect answer.

It is an answer. That's not the answer I'm looking for. I'm saying if you want to manage the hedge by the robot, what is the strategy?

Use the global is the only way then.

Okay, so you've got four Charts open. But your new four charts, you don't want to use global, you want to use chart specific. How do you then manage your old trades?

By setting up chart specific gauges on those.

So you want to, you want to open up.

So it has to be, it has.

To be four charts. Correct? It has to be four charts to manage those trades.

Yeah. So you need eight charts open to manage all by charts. Yeah, that's the only way.

Yeah. Do you guys have any questions? I think I've been quite thorough with this.

Okay, I've got three questions.

Yeah.

Okay, so.

If my lot size is low enough that I don't get nervous when I go into drawdown because it, the price goes south faster than drawdown in inverted commas.

What is the benefit in that case?

I don't understand your question up to that point.

Okay.

Okay. My, my Percentage risk is 0.02%.

Okay. Mm equals.

Mm, 1.02.

0.02. Right? Yeah.

So if I look at my drawdown.

The lowest that it reached globally now with this down downswing was 19%.

And my margin level was, if I remember correct, 7200%. So my question now is.

Why not just leave it? Because it can go about another $600 before my margin would reach 2,000. But bear in mind, I, I have reduced my number of open buy trades to what is open at the moment. So I am, I'm, I'm stop, I'm stopping the, the bot then to trade because it goes south. So you see, that's the, that is where I've got the, the difficult question that I can't answer to myself because I, I would assume if I've got hedging, if I'm using hedging, I can still open new phrase and make profit again sooner when it goes north again, which I won't be doing if I'm following the strategy that I was using.

So what is your question?

My question is, will, if I've started hedging earlier in the downtrend, would, could I then leave the number of buy trades to a higher number so the, so the bot will keep on opening new trades? And if I've got a second hedge percentage and a lower, will that allow me to keep making profit that I can obviously use to.

Reduce my loss if the hedge is against me?

Okay, I'm going to answer this in multiple ways. Okay, so firstly, I now remember why we set. And I remember why we set, why I set the hedge up at drawdown and not the second candle below the atma. It's because of your exact question of when is the right time to hedge. So if you've used the incorrect lot size, when the second candle opens below the atma, you may have already blown your account to the equity protector may have kicked in. That's why I changed it to drawdown and not the second candle, because I wanted to make sure that everybody got hedged and nobody's equity protector kicked in.

Understand?

Okay. So it's all to do with risk. Okay. When is the right time to open the hedge? This is an understanding of chart analysis. You can't be hedging, in my opinion.

Like, you also need to be looking at the demand zone and the supply zones. Why would you then? That's why I removed my hedge, if you can remember. So I was hedged by, I think it was 84 lots or something, or 74 lots of double hedged. And I closed the one hedge. The second hitch.

Closed out at zero because it had a stop loss. And that was because we were on a demand zone. And I thought, if this thing goes north, then I'm going to be stuck right at the bottom of the trend.

And that's when I decided to post the poll. Who needs help with hedging? So that you could rather understand.

Chart analysis is, is the key, is the key here. That's why I'm saying to you, when the second candle opens below the atma, that is the correct time to be placing the hedge if you have used the correct wallet management.

So no one can say to you when is the right time to hedge. It's got to do with chart analysis. Got to do with your risk appetite. Got to do with a couple of things.

Can the robot be set to hedge at second candle below or X percentage drawdown, which is.

I think it can. Okay, where am I? 8036. So hedge.

Moving average and chart drawdown.

It's your moving average.

Your, your percentage drawdown has to be met together with the second candle below the atmo or below. However you've set these settings up here.

Can we do either or so either when the second candle opens below or when your draw down hits X?

No, it's, it's, it's both together. It's not either or. It's not an either or statement. This is a both together statement. I hope I've answered your question, Fritz, if you want to. I don't think I have though. If you want to rephrase your question after I've given you what I've given you in my last.

Statement. Okay.

I'm going to go to a second question and I think if I've got the answer to the second question, I might, I mean it was, might be clarifying what I've already asked. And that is you've mentioned in the conversation today that it is possible, if you use hedging correctly, you could double, triple or even quadruple your balance.

Yes.

Can you. Is it possible that you can take us through what, how that is done, what you mean by that?

Okay, cool. Let's say. Okay, so Fritz, I'm going to rely on you and your mathematics here, please. Okay. You've got a 10 lot. Yes. Okay, so for every 0.01 lots.

Your account moves.

By $0.01.

So on a one lot it's 10, on a 0.1 it's $0.10 and on a one lot it is $1.

So on a 10 lots it's $10. This is perfect scent.

That the.

That gold moves. Okay, so this is percent.

So the second candle opens below the atma.

I got that one at this level here. Call it 4180.

And then the second candle opens above the ATMA. Call it 4073.

How many cents is that?

So the difference between 4180.

I don't have a calculator on my dashboard, so that's fine. And the second one, so call it 4073. So your hedge opens at 4180. You close your hedge at 4073.

It's 190. 90. Let me quickly do the calc.

So it's 4180 minus 100. 7072 is a hundred and eight dollars. Times 100 is 10,800. Okay. Times that by ten dollars.

So it's about ten, eighty dollars that you've made profit on this trade. If your account is $10,000. Okay.

Then you've made 10% profit. Are we on the same page?

That is if you close the.

You close the hedge because the second candle has opened above the atma. You see a lot of you guys aren't doing the strategy because you don't trust my strategy yet you it's. Who is Alan? Who the is this Oak? Can we trust him? What is the strategy? I've never heard of the strategy. How can I put $10,000 in my account? Okay. And trust us. And I get that.

Isn't that what the bot was doing with Raj's.

On a one minute chart? Yes. So agree. So that's not the right time to be closing the hedge.

I agree.

Because the trend hasn't reversed.

Ah, I see, so, so you, we only do that when the twin reverses.

This is my strategy. I believe that my strategy. I haven't found anybody in 11 years that can beat my strategy. With the length of the trades in pips, which is profits.

Correct.

Everybody out there is using a Strategy. It's a 2 to 1 risk reward ratio against you, which means what they're doing is they're putting a take profit at 15 pips and a stop loss at 30 pips.

Now that's, that means nothing to you. What I mean is you can't rely on that because it all depends on the momentum of the, the, the, the, of the, the transactions, the momentum of, of the direction. Sometimes it will go much faster. So 15 pips will be reached much, much quicker than other times.

I just think it's a dumb strategy.

Yep, that's what I'm saying.

But most traders have been trading this way. You can ask a question. Most traders are trading that way because that's how even the forex companies teach.

Correct.

Anything that the forex company is teaching you is not to your advantage. Oaks, they run a business, okay? Their job is making money off your trades. So the more trades you make and place, the more money they make. So for them it's a great strategy. For you it's not a great strategy. I found this to be the best strategy out there. There are lots of strategies, millions, billions of strategies out there. When somebody says to me, can you program the robot to do the strategy? I say, do you have back tests on a live account of that strategy over a three to five year period? The answer is no, they don't. And my strategy is not 100%, it's about 85 to 90%. What makes my strategy 100% is, is the hedge function and the hedge strategy because it's, you've hedged your account, there are no losses. So it's a hundred percent profitability on those, on that strategy. But the second candle for me opening below it's a sell. The second candle opening above it's a buy. If you're watching the chart analysis group, I explain it to you, I show it to you and I prove it to you.

I mean I saw that I, I agree 100 with that. So now, now starts making sense why it's why I should be setting the age functionality and as a percentage and.

Then when I don't know if the percentage is the right way to do it because let's say you have Large candles. Okay.

I mean percentage hedge, like a, oh, 50% age. 50% age.

Okay. That is a definite, if you're doing it that way, it's definitely an easier way to manage the trades if the price reverses against you because you've only got, let's say your first hedge is 25% of the account. It's definitely easier to manage the account that way. And the second trades, second, third and fourth trades to get your 100% are also easier to manage because, because let's say the second, your first, second and third hedge opens, okay. Then your fourth hedge opens and immediately the trend reverses. The second candle opens above the atma. I'm going to draw another line here. This is one hedge 25% this is your second hedge 25% and this is your third hedge and this is your fourth hedge over here. Okay. So your fourth hedge is 25% of the total lots that you have. And then the second candle opens above the atma. I'm going to move this down a little bit for just this exercise to understand it. But even if I didn't, okay, you've got two hedges in positive and two hedges in negative. It's probably a zero sum game. And now you've closed out your hedges, you've got no hedges and, and you're in an upward trend and the chances of the price continuing north is about 80%. Can we agree on that?

I agree 100% but for, for me personally if I do that, the benefit is that whilst it's going down I can even my, my bot can even trade, can open trades quicker when it turns up again because currently I, I, I have to wait out a longer period.

So now I don't understand, I don't understand. Can you go through the strategy slowly so I can understand?

So, so what I, so you hed.

You hedge 25% and then.

No, no, I mean my current, my, my, the current way that I protect my account is to limit the buy the open buy trades. So if the price goes further south and it turns and it goes positive, I don't have available buy trade slots, so to speak, So I have to up, up that number.

What do you mean by trade swaps?

I think it means a max number of buy trades.

Yeah, max number buy trades. Sorry.

Thanks. It's a strategy. My strategy is 20 trades open at any one time per chart.

Yeah, see I've got mine lower than that, hence the reason why, but is not trading at the moment.

So I'll tell you what the disadvantage is of that. Okay, so let's say, let's say you have trades that I've traded here. 1, 2, 3, 4, 5. Okay, you've got your max trades. Now the trend reverses and now there are no trades. Okay, this is a hedge trade. This is a hedge trade. And this is a straight and. And within this area.

There are no trades.

Yeah, that's exactly what I'm, what I'm saying.

Okay, so it's blank. Okay, so now some of you are using a take profit, which means that your take profit line is about there. If you're using take profits and you understand the robot, your take profit line is about there, miles away from the price.

You will. So you've got nothing happening here and negative trades over here and your robot can't open trades anymore. So you're waiting for the price then to spark north, okay, into this area. Sorry.

That'S. That is you're waiting for the price to spark north here for these trades to go into profit again and then you can start making money. So the disadvantage of the strategy is that could take a day, a week, a month, three months. So you're not making money now. All right, maybe a better strategy for me would be then waiting for the second candle to open above the ATMA and then increasing my maximum trades to 10. That means within this area here I can start making profits. So trade opens, go. Price goes up. Second candle opens below the ATML on a one minute chart, if that's what you've set it at, close positive trades. When the second candle opens below the ATM on a 1 minute chart on. And then all positive trades close, price come, and then it immediately starts opening up new trades on the way down. Okay, so let's draw it. So you, let's just do it in.

In this area here. Okay, so second candle opens in this, in this area here.

Here. Candle one, candle two. Second candle opens above the atmo. Right? You now restart the robot and you set the robot to 10 open trades. Now the five are used up here and you don't want to wait for the price to come up here. You want to start trading and making money. So the robot opens a trade, price goes up. Okay, Second candle closes below the ATM I. On a one minute chart. Let's say it's there. So let's say this candle spikes up here, all right, this is on a 15 minute chart that we're looking. And then the second candle opens below the ATMA on a one minute chart.

One, two. There's a one minute chart. This trade closes And a new trade opens over there. Yes. Are you with me?

Yes. Yes.

Price continues to go south.

Price continues to go south there, red. Okay. And then a new trade will open over here.

Correct.

Okay. Then it carries on south. Carries on south. Okay, sorry, sorry. Carries on south. Okay. You got four trades open. And then the price spikes north. The trades turn positive. Second candle closes below the atma. These trades then close out in positive. And this process, process is repeated, rinsed and repeated until the price then goes south.

And you've used your five trades. You've got five more trades open, which is 10 trades because you've got trades at the top. Top. Okay. 1, 2, 3, 4, 5. Okay. The, the, the price continues to go south down here. No more trades open. When the second candle opens above the atma. You can then set your, your max trades to 15 trades and then carry on. And this is a great way. I like the strategy a lot, by the way, to dollar cost average cleverly on the chart. It's a very clever strategy. But you will not make as much money and you need to be okay with that. You can't have your cream, your acid without the cream or you can't have the cream without the acid. Unfortunately, there's always going to be negatives to the, the, the, the strategy that you've chosen and you've got to be okay with it. You've got to say, all right, cool. That's how I set it up.

I'm not disappointed, but I think there could be a better way of setting it up. This is. You got to everybody try and remove the negative emotion, the FOMO emotion. Shit, man, I should have done this. Flip it. If I only had done that. That you've got to stop because that is a very dangerous emotion, that emotion. So you got to try and remove that emotion, okay, and be comfortable with the tragedy that you've chosen if it's not a suitable strategy. You've got to say to yourself, this is where trading psychology is so important. You've got to say, it's interesting. Okay, I got what I, I got what I did. I'm happy with what I got. I think, let me try a different strategy and let me see if I can get a better result. This is, this is why having a trading journal, understanding what the robot's doing and not it being so random, because then you're leaving you, even then leaving your emotions to be random because you haven't planned anything. You don't understand the robot, the robot's doing this. You don't understand so you're emotional. If you understand.

What the robot's doing. Exactly. And you're comfortable with that strategy, can there really be emotion attached to it?

No.

Okay.

He is not.

Okay. So are you guys comfortable? I know Rajiv had a question. Fritz, let me take Richard's question, then I'll come back to you 100%.

So just a quick one. I see that there is a setting for close hedge trades on atma on the forward chart, which mine is set to false. If that was set to true, can you show me where that is on the section?

Oh, you're talking about remove edge trade.

Yeah, section 11. So you want you proposing if we just had that set to True on the 8 on the 4 hour chart, then it would automatically close the hedge trade. Am I correct?

Correct. So let me explain to you the strategy. Okay. There is this functionality. Yeah. Remove hedge. All right. When the second candle four hedges.

I'm doing the partial 25. 25. If I did four 25 hedges like the example you were giving, would it remove all four of those hedges at the atma?

No. You can set it here to positive, negative or both.

Yes.

Okay, so let me explain to you how clever the strategy is. You set it that when the second candle opens above the atma to close your trade, if the trade is positive, the trade closes. This strategy disables. Okay. Hedging because you're this. We've done it this way because if you've hedged on drawdown, as soon as you close that hedge, a new hedge is going to open.

Yes.

Okay. So we've added this disable hedging after closing. And then there is an insurance trade where it is a the consecutive flip. So if the second candle opens below the atma, it'll. If this is true, it'll re hedge your account 100% or however you've done it, input at level. Just want to see what the multiplier is here. Okay. The swing high of a candle, the swing low of a candle, or the price or consecutive ma flip. So when the second candle opens below the atmo on whatever time frame you've chosen, hedge re hedge. All right. That's the insurance age. If you put it on a four hour chart, then it'll hedge, but your drawdown may get make it bigger. And then it's got your disable insurance hedge rules. This was created. Yeah. So if you're in an uptrend, if you're in an uptrend and you feel like there's maybe a demand zone and the second candle opens below the atma, but you're at a demand zone. You can disable the hedge, the insurance hitch, because your hedges have now been. This. Your main hedge functionality has. Has now been disabled until those hedges close. Right. Okay.

Okay, cool. Thank you.

No, you've covered my last question that I wanted to ask. Thanks.

Okay, cool. So have you. Did you guys find this informative?

Absolutely, yes.

Are we done, guys?

Yes.

Thank you very much, Alan, for your time. Appreciate that.

Okay, cool. 100%.