Forex Hedging Strategy | Video 4

Alan, so last year the passive income guru in this video tutorial is going to teach you how to close out a partial lot size of your hedge. This is going to be an absolute game changer for you if you are using my hedging strategy.

Just to let you know before I show you the video that I'm not a financial advisor, I cannot give you financial advice. These strategies that I share with you are strategies that I use on my Forex account. You need to check and see if these strategies work for you on a demo account. And then and only then, once you're comfortable, you can move on to a live account.

Okay, great.

You can just mute yourselves.

Okay, great. So some of you are freaking out because the distance between your buy and your cell hedge is miles apart. And at the moment if we look at euro US dollar.

You can see that, okay? So some of your trades, some of your trades are like here and you.

You probably thinking, how am I going.

To get out of this, this hedge.

When both current, both the trades are now going to be in negative. And I'm going to teach you something amazing which you're going to love. Okay? And very few people know this, so some of the experienced traders know this. But this, this is meant for people that are not, not that clued up or inexperienced. So it's called a partial close. How to close your trade partially. Okay, so let's say hypothetically we're going to take profit, okay? So we're going to close out, we're going to close out one of the trades. Okay, let's close out this one. Close. And then remember last time we were.

Trading I opened these hedges, if you can remember.

So we'll close those two hedges. Great.

So let's go to the history and.

We can see that we've made fourteen.

Hundred and seventy six dollars.

Okay? Now what's happened is, is my, my equity has probably going to, you know.

What, we're in a cell, so let's just close all of them.

Okay? Let's see what happens to the equity. So the egg, the margin percentage went up from 120 to 144. That's the important part.

Okay.

And we're going to close this one out as well. Okay, great. So now all we've got is sell trades. Okay? Now let's say all your trades are in negative, okay? And you're still hedged. So what you've done is, is that you've traded a little bit manually and you've made a little bit of profit, but you've still Got your sell trades and your bar trades open, hypothetically. So there's going to be the buy trades open here. Okay, so now let me show you what you're going to do. So we're going to see here that we've made seventeen hundred and ninety three dollars profit. Okay? Now normally what I would do is I'd now ride the, ride the trend south. I'll wait for the, for the second, the first candle to open below the eight and then the second candle open below the eight. That's what I would normally do. But for this video, I'm going to show you what you're going to do when you have a buy and a sell trade that's open. Okay? So what you're going to do is you're going to swipe your finger from right to left on the trade to drop down this menu. On an, on an Android, it's going to have different options and I think the option is close on an app on an Apple that there's a tick.

And the tick means closed.

Okay, so you're going to click on the tick. Now this is where you would click here to close the trade. 80 pips. But we're not going to do that.

We're going to be clever, okay? What we're going to do is we're.

Going to take that away and we're going to.

What we're going to do is we're going to put here 0.10.

So that means we're going to close out 0.10 of the 80 pips. Okay. Or what we can do is we can say let's close out 10 pips of the 80 pips, which means that it will leave 70 pips. So let's close it. And that just wiped out all my profit. Okay, now we still got some profit there. We've got 1600, $1600 profit still from the, from the 1800 that we had. Okay, so the 10 pips that we wiped out, okay, equal to $184.

Okay, so now we can go back to the trades and something that's interesting. So that was the 80. So now we can say, okay, well we've got $160 left at $1600 left in profit. So we can say, okay, what can we close here? We can close all of these.

So let's close them and we'll still have profit. Okay, let's close them out. Profit. We still got profit. What's the margin percentage on check the.

Check the equity going up. Okay, so we're just getting Rid of some, some, some trades. Yeah. Okay. And now we've got $543 of profit, but we've still got a massive hedge open. But we know that the 10. The 10 that we closed is equals to 184. So you can say we can close out another 20 pips. So let's close out another 20 pips.

So let's go here and we'll click on the tick and we'll change this to 20.

And let's see, we'll have 0 profit but 173 profit left.

So we can close one more out. One more out. Okay, we can close 10, 10. And now we've got, we've made no profit, but check.

We've got $10.63 profit. We've got our equity, our margin percentage back from 170 to 610. And we've only got 40 lots left of all those lots that we had. This account was hedged. 160 lots. All I've got left is 40.

Did you just learn something? Amazing.

Okay, so some of you are freaking out that you're going to be stuck in this trade forever. I want to be in the trade. Okay, now it's a little bit late because now my. Now I'm also in the position like, like some of you where my bar and my cell are, they're years away. Okay? Now tomorrow may be different. The currency is retracing at the moment because there's a meltdown with the Dow Jones. So if we go to the dax.

Let'S go to the dax. We'll check the Dow.

Check. This is the Dow. And the S and P to S and P is no different. So this is the state of the American economy, which is what everybody expected. So what I'm saying is on the.

On the euro, US Dollar, everybody's like freaking out. I think tomorrow we could see a massive pullback.

Sorry, a massive increase because the US Economy is not doing so well.

So let me do it this way. Okay? So they reckon that it's just going to go north. That's what people are reckoning.

And they say that it could be.

1.68. That's where it could go.

And if that's the case, then I'll be in a good position to then close my hedge out again if it.

Retraces and I'll make some money.

Okay, so to recap on this video, it's a short video on how to close out your hedge.

What you do is you take your.

Finger, I have to make people enter Right. What you do is you take your finger and you swipe from right to left to left. You can't really see it. So there it is.

I can't do it. Okay, so it's right to left.

And you get that menu, okay.

And then you click on the tick.

There's the tick. You click on the tick and then it tells you that you can close out a little portion of the trade.

So let's just. So we don't want to do that at the moment.

So that's how you do it. Do you have any questions? Does this help you and give you a little bit more sanity that you're going to get out of this hedge? You can unmute yourselves? Yeah, def. Definitely, Alan. Thank you.

Okay, so what you, what you did there is that you, you took the profit and you took the equivalent losses.

Okay. In this situation, yes. Okay, let's say I still had bars and cells. Yeah. Okay, so let's say I still hit buyers and sells. So let me just, let's just see the direction of this currency.

Hold on a second.

It's difficult to say. I think it's going south. So let's just place a trade, let's.

Place a massive trade of 50 pips and we're gonna sell and hopefully we.

Can get some profits.

And I can show you what to do.

Okay, so if we can just get some profit here, then I'll show you what to do. So now we're trading manually, okay? You've got your buy and your cell here, and it's hedged. Okay. I've closed them out. But hypothetically, let's say you've got your hedge here, okay? And now we're trading manually and we're going to start reducing the hedge. So how do we do that? We're going to wait for this, for your manual trade to go into profit. You're going to wait for the trend to carry on going all the way down south.

After it goes down south and it then reverses. You'll close out your manual trades, but your, your hedge will still be in place. Yes. Are you following me?

Speak. Guys, are you following me so far? Okay, so, so it's meaning that's that, that's the, the buy and the cell. You've got bars and sells here. Okay, so let's say this, this sell, this buy here is 40 and the cell here is 40. Hypothetically, okay? Now the currency, I believe, is going to go south, okay? And.

We'Re gonna hopefully make some profit on the way down.

Right?

So the rule is we follow the trend all the way down. When the second candle opens above the atma. Some. Maybe it's. Yeah, maybe it's here. Maybe it's. Yeah. Who knows where it is? Let's say the currency goes all the way. All the way.

Let's say the currency goes all the way down here, okay. And it pauses. Your atmas are going to follow it because it's an 8 exponential moving average. Works on the last eight candles. So the atmas are going to be very close here. Okay. So if we take the line.

Let's just take a line. Okay. And we'll make that into a dotted line. There we go.

So that's your 8 exponential moving average. Groovy. Okay, now you get a green.

No, we want to make that into a dotted line. Right.

Now we get a green candle.

Okay.

And the first candle opens here. Right. Then you get your atma.

That's going to do this.

Right, Ruby?

So here's your atma, okay. There's your first candle.

And here is your second candle.

Now what we're going to do is we're going to close out the sell trades, okay? Close out the cell trades. You've made a profit, right? Are you with me?

Right. So there he has the profits, okay? So now we're going to close the trade out. We can close $8. We're going to close the $19. We've taken the profit, okay? So now we've made $19.50. So now what you're going to do is you're going to reduce this hedge over here and this hedge over here. So let's say this hedge is 40 and this hedge is 40. You're going to say, okay, let's reduce the hedge bar and the profits. There you can see 0.1 is, is $1.70. And so we can do $1 is $17. So it's 0 point. It's 0.5, which is $8. So you're going to close $8 on the cell and $8 on the bar.

And your hedge will be exactly the same, but both of these, the buy and the sell, will now be 39.3950. So you starting to reduce your hedge. So you've gotten your. You've gotten your check. How much margin percentage I got back?

Do you remember?

My margin percentage was 160 or something. I'm back to 775. That's exciting.

You can trade now. So now we can. Now we can go south again. So now we can place another massive trade.

Okay, 50.

And we can south and we can wait a little bit. So let's wait a little bit and get this one into profit and then we'll do the same thing. This is scalping. I don't like to scalp. I like to get the full length of the trend. I'm just showing you how to do this from a.

From a sanity perspective and for a time.

To time sake so I don't spend the whole night on the phone with you guys, like on the zoom call. Okay? So yeah, we'll wait for it to go into profit, you'll close out the profit, and then you'll start reducing your lot sizes down.

Are you, are you getting this? This is like so cool.

Yeah, thank you.

Very cool.

Okay, so, so some of you are freaking out. You're thinking, oh my God, how the hell am I going to get out of this trade? Guys, trading is, it's an amazing concept. You have good days and you have bad days and your bad days are really bad, okay? And thank God we've got the tool to stop.

The account from blowing. The days of blowing your accounts are gone. Okay? All you need to do is. This is the time for me to have my disclaimer. This is not trading advice, okay? I'm not a financial advisor. I, I cannot give you trading advice. This is only what I do. Okay? So you need to do this on demo, test it, see if it works for you, check your losses and see if, if this is something that you want to do. But this is how I trade, okay? And it works for me. As you can see, yes, I'm losing margin percentage here because this is a micro account, but we're going to get it back. And also I'm not hedged anymore. That's why my margin, my equity is, is going down. Okay? So let's, let's, let's open, let's open a 3950 for a buy so we.

Can stop the, we can stop the hemorrhaging.

Will this strategy work on a low account?

Just hold on one second.

It works on everything, my brother. Right, so we now stopped the hemorrhaging, but I've lost margin. See, I didn't lose that much equity margin percentage. I'm hedged, I'm cool.

And now I'm trading south. So we hedged and now we're going to wait for this account to go into this trade to go into positive. And now I'm going to show you how to close out a little bit here and a little bit here to get rid of the hedge so let's just wait a little bit, and hopefully we can get into some.

Into a profitable scenario.

Just see here what I can do. Let me just see the fifth, the five minutes, and.

Let'S see.

You can see we're on a little bit of a support line over here. If it breaks through there, let's see.

Where it's going to go. If it breaks through there now, you.

Can see as the support line. So I don't know if I. I think it will.

I think the banks are going to push this down until the results come out tomorrow, and then this thing is gonna.

I think it very possibly is going to go north.

I. I don't. It just doesn't make sense to me how the. The dollar can be stronger when the Dow and the. And the S and P is in the toilet.

It just doesn't make sense to me.

So hopefully we can.

We can go get into some profit. Okay, let's wait a little bit. Come on, little buddy.

There you go.

Okay, please.

Gonna have some water.

I can't ask somebody on my Zoom.

Call to get it for me.

Okay, I'll.

Okay, so let's wait a little bit. Are you happy to wait? So while we waiting, let's. Let me answer some questions.

I need to let people in. Knock, knock.

Let me in, I say. Okay, so who's got questions? Come, guys, ask me questions. I don't do this. These Zoom calls every day. So he has an opportunity for you to take advantage of. Yes, sir.

Would this work on a small account? If you say you got free grand.

On it, yeah, sure it does. But you need to check what your margin percentage is. So your margin percentage is. Is very important. Don't let it get like, below 100 or, you know, your mark. Your. Your. Your account with FPS blows at 30, so when it gets to 60, you. You're in trouble. And you need to then use very small lot sizes of 0.01 to start gaining some profit. And then you can.

You can start getting some margin percentage up, and then you can start lowering your hedge. Thank you.

And also, you're just stop lossing. How do you.

I don't use a stop loss, my brother. Why are you going to use a stop loss? What for? You're not following my strategy.

If you're using a stop loss, there's.

No point in using a stop loss. You can use a. You can use a sell stop or a buy stop or a buy. A buy order or a sell order. I hedge. I don't like closing profits in loss. There's no reason for, for trading. I mean, yeah, I don't like closing trades in, in a loss. I like to close my trades in a profit and I use those profits to then remove the hedge if I need to.

I would.

Oh, okay, okay, so there, so now we've got a little bit of profit.

Hopefully we could get a lot more profit. So it's actually, so it is, it's in the cell. Okay, so we're going a little bit south.

Yes. Let's go see the five minute chart. Really.

So hopefully we can, hopefully we can go get more profits here.

But are you getting the concept? Do you understand the concept?

Yeah.

Okay, does any, every, anybody else want to ask a question if you don't understand? Guys, this is the time to learn. This is the time to ask me questions, okay? And there's no such thing as a stupid question. Some people learn faster than others. I talk very fast and I've got a strange accent. So, you know, if you don't understand something, unmute yourself and let me assist you and tell you what I do.

So Alan, you did that specific move to up your margin level.

Yes.

And, and to reduce, and to reduce my hedge.

Which, meaning the one that's, that's heavily negative that you, that went against.

So they both negative. Can you see? They both negative. The 39 and the 39 are both negative.

Okay? Because the buy and the sell is so far apart from each other that you may not get out of your head. You may never get out of your head. Okay, so how do you get your margin percentage back? The only way to get your margin percentage back is to then use the profit from your, from your trade that you're gonna use to trade manually now, right? My people, my clients, my investors, okay? That use my software. Some of you aren't trading with the software because you're not sure what to do. My recommendation is switch on your bot. Switch on your bot according to your available equity. That's my available Equity. I've got $365, okay? If this is a, if this is a center count, if it's a micro, then I've got $36,000, okay? Switch on your bot according to your equity.

So go to the calculator. Go switch it on, put it on so that you can start trading and then follow my manual trading sessions so that you can start making a profit, okay? Manually. Just watch your equity. So now we're going to close out the trade, okay? Not that one gonna close out this trade. We now made $40 profit, $40. Thanks. Okay, now if we go to the history, you'll see there's my $41 profit that I made. So I'm going to now go and reduce these two edges over here. Okay, so I'm gonna go over here, I'm gonna click on the tick and I'm gonna say, okay, So I made $40. How much can I reduce it by? Oh, look, 10. So I can make it 20. I can make it 20 lots.

So we've got two trades here. So we're going to split that 40 into the two trades equally to reduce it equally so that you're still hedged equally. So before I do that, we're going to take a sell trade of 50 so we can start scalping the market.

Again because we know that it's going south.

And now we're going to start moving this. We're going to close this out.

We're going to say 10, and let's close it out and see what happens.

10 of that and we're going to close.

10 of this.

Okay, can you see that the one is bigger than the other?

Can you see that? So here you're going to lose money. You're going to lose like a hundred and forty dollars. So we'll just close it out for the moment just to make it, just to make it even and we'll make it back. My call's going to cut in about seven minutes. If you want me to carry on with a call, you'll let me know now and I'll carry on. So there we, we might, we lost a bit of money, but you can see here, we still hedged.

So when you close out your hedge, you need to close out your bigger amount first, not your smaller amount. Okay, so let's, let me show you. So here, Hypothetically, we had $40. So we're gonna say, okay, what is $40?

What is $40? That's $16. So 40 divided by two. Remember, we got two edges. So we're going to split that hedge into two. Yes. Are you following me? Okay, so we see the one lot is equals to $16.70 or 6, 1600, whatever it is. So we can close this one or we can say, okay, 1.5, 1.2. There, that's the 20. So we'll say close 1.2 and then we'll say right on this one. On the other edge we'll say plus, we'll say also 1.2. 1.2. Yes, you'll have profit, you'll make profit, but you're Bringing down your hedge in equal increments so that you don't unhedge yourself, you must always remain hedged. So what's the takeaway here? The takeaway is two things. One, you can close out your hedge in partial increments. You don't have to close out the. The full 28.3 lot size. You can close a portion of the hedge out. The second takeaway is that when you.

When.

When you. When you close your hedge, you must always choose the. The hedge with the larger drawdown, the largest exposure. But are you getting. Are you getting. Do you want me to carry on with the Zoom call, guys? Because we're going to get cut off now. I can see you want to just type in the. In the text chat. How do you. Can you.

How do you do that on the. On your laptop or on the server?

Same thing. Exactly the same. So you just double click on the trade and then you'll just close it out partially. So let me see if I can log into my server here.

Give me a second.

We're gonna get cut off.

So if you want to continue, you can join.

Just see.

My wife's choking.

I may need to go and help her.

Sim. Are you okay? So, yeah, you double click on the trade, okay. And then you say close out a portion of it.

And then you'll just say close trade.

So any of the trades, you just double click, double click on the trade, and then you just change your lot size over here. And. And then you need to do it on the buy as well. So if you're doing it on the sell, then you need to do it on the buy. Are you. Are you good? Does it make sense?

Absolutely.

Are you happy? Very. Can. Can I log off? Can I log off now?

Can I go for dinner?

Can I go for dinner? My wife's nagging me. Okay, I've got to take a call, guys. Thanks very much for the call, and I'll see you on my next zoom call.

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