Hedge Removal | Remain 100% hedged

This video tutorial is going to assist you and teach you how to partially close out your hedge and some of your trades that created the hedge and allow you to be 100% hedged. Let me open up my phone so that you can understand what we are doing here. I'm going to just open up this account over here. We're going to go to the history.

We've made 2.15, we've made $47 and for the month I've made $180. Now I can use some of the new profits to start reducing my hedge. What I normally do is I normally click over to a 15 minute chart when the second candle opens below the ATMA. Normally what I do is I close out my hedge and then I wait for the second candle to go above the atma and then I can re hedge my account. If you have a high drawdown of, let's say, or your, your margin percentage is, let's say less than a thousand percent. On my account I've got 1150, so I'm still safe. I can still remove the edge safely and then re hedge if I need to. But let's say you're below 1000%. What do you do? How do you start reducing this trade and reducing this trade but you still want to remain 100% hedged? All right, so let's say hypothetically that this trade is 7.22 lots and you want to remain 100% hedge, but you want to use new profits generated from the robot or manual trades like I've shown you in the other video of how to use the correct lot sizes. You want to use new profits to start removing some of the hedge and your trades that the robot had created that created the hedge, this is what you would do. You would click on tick. Now I would always start with a 0.01 lot size to understand what's going to happen to your account if you close out 0.01 lot size. So you must always start with the minus trade first. The trade that is in negative, that is what you start with first and you click on the tick and then you say 0.01. If I close out a 0.01 lot size from the sell trade, how much money am I going to use of my profits? That $180 that I had in profit, how much money am I going to lose? So over here, and this, you can only do this on the mobile phone, you can't do this on the VPs. So you have to learn how to do this. On the mobile phone. So over here it says here, if you closed out a 0.01 lot size of the sell trade, you would lose $3.31 US cents. So this is in cents. Remember, the account is a cent account. So how you get to cents is you move the decimal place two places from right to left, which is over there, and you get to a $3.30 loss, that is from the sell trades. If you had to close out on the buy trades of 0.01, you would make a profit of $0.27. So 330 minus $0.27, you would lose approximately $3.03. So now I'm going to go back to this account first. Now, the reason we we minus from the negative first is because what's going to happen is, is that your drawdown will decrease, your equity will decrease and your margin percentage will increase. It's very difficult for me to show you this with such a small lot size, but we're going to try and show you what's going to happen to your account. So this is before we close out. We're going to close out 0.01. We're going to lose $3.31. Then from the bar trade, we also going to close out 0.01. We're going to close. Then what we're going to do is we're going to take a screenshot. Very little difference happened. We're going to paste that over here. We're going to say after. So you can see here, the margin percentage increased by 1%, just under 1% from 1152 to 1153. Very important that when you're doing this, your margin percentage increases. So let's look at your equity now. Your equity decreased slightly as I said it would because you closed out some of your trades in a loss. Remember, we lost about $3. So let's go back to the history and It'll tell you so 330 minus the 2027 cents you lost today, $3.04. That's why your equity has decreased. Your margin percentage increased. And that is a key here. What you're trying to do is you're trying to increase your margin percentage so that you've got more money to play with so that you can start removing more of your trades. It's very important that you start off when you're doing this that you are reducing Your trades by 0.01 first until you start gaining some confidence. That way you can start getting experience and you'll start understanding what's going on Now. That you've done it once. Let's do it again a second time to start getting some confidence. So we're going to reduce this by 0.01 and we're going to lose another $3.38. Before I do that, let's take another screenshot so that we can show you. This is the before. Okay, let's do the after. We're going to remove from the honest trade first. We're going to close out here 0.01. We're going to lose $3.38 from the red, and then we're going to go to the blue and we're going to close out another 0.01. We're going to close that out with going to lose another $3 odd. But still we remained 100% hedged. We removed 0.01 and 0.01. Remember what I said? Let's pretend that this was a 7.22 and this was a 7.22. So if I removed 0.01 of the bar and 0.01 of the sell, we still 100% hedged, so the account is safe. Now that we've removed this, let's go back here and let's take another screenshot so that we can see what exactly happened to the account the second time we did it. You can see here, it went from 1152 to 1154. The original was 1152 over there. We got back another 2% on the account, which is amazing. So, as you can see, we're using the new profits to close out. So some of the trades that were created when there was an anomaly in the market, this anomaly is normal. We just need to understand how to remove these hedges safely and productively and in a way that we can sometimes make a little bit of profit. But if you can't make profit, no problem. Just get rid of it safely. If we know that the trade that we removed on a 0.01 was $3.28, if I change this number to a 0.1, it'll be 10 times this number, which will be $30, and 10 times this number, which will Be $2.50, we would have lost about $30. If we close out a 0.1, I'm going to do that for this exercise so that you can see exactly what I'm doing. Let's go and close out a zero.

You can see here, it's $32, exactly what we anticipated the loss would be. If I go to the buy trade and I close out a 0.1. It's $2.39, which is exactly what I said it was going to be. So we're going to lose about $30 on that trade. I don't want to do that currently. I don't want to chow into today's profits, which is only $3.91, which I've lost. So I don't really want to lose the $30 on my account for today. I'd rather wait a little bit when I've got bigger trades and a better opportunity. Like what I said initially that when the second candle opens below the atma, I could have closed out my hedge, made my profit. Then when the second candle opens above the atma, I could have. Then before creating the new hedge, what I would do is, for example, let's say I closed out this trade and made $150. I would then take the $150 and remove X amount of lots from here, which was two lots. Okay, let's do it nicely. Let's say what would it be? It would be. So it's $30 0.01369, 1215. So it's a 0.4 lots. Okay, there it is. $130 loss on that tray on that side of the equation. And if I minus 0.4 and this trade is gone, then it's 7.2 minus 0.4, which leaves me with a 6.8 lot size. My new hedge would then be a 6.8 lots and I would then open a new trade of 6.8 lots. What's happening is, is that my equity is going down, my margin percentage is coming up. I've used my hedge, I've closed out my hedge, I've closed out some of the sell trades that created that hedge and I've gotten back margin percentage and I'm still 100% hedged. I hope that you understand this. I know it's a little bit complicated, but just rewind this and start asking questions on the EA hedged group so that you can start understanding what I'm talking about in this video so that you can start removing your hedge, removing those open trades and still remain 100% hedged. Nowhere in my program did I tell you that this was 100% automated. I said to you on my presentation, on my advert, on my website and in the training videos that number one, you're going to get hedged. Number two, this is not 100% passive. Passive does not mean set and forget. Passive means that you'll still need to apply some time. That's what passive means. It doesn't mean full time, it just means passive. Let's look at property for example. Property is not 100% passive. If you don't look after the tenant or the property you'll either lose the tenant or the property or both. If you give your money to a financial advisor, if you don't take care of the financial advisor and look after the financial advisor and speak to the financial advisor and advise or get advice from the financial adviser and then ask questions, then your investment is going to dwindle and you will not make good profit at the end of the year. So there is no such thing as 100% passive or 100% set and forget it does exist but then you can expect to have a very low return on investment. I hope that you're clear on these concepts. If you've got any questions please ask on the EIH Group and I look forward to answering your questions there. Thanks very much and I'll see you in my next video.