In my quest of findind a trading strategy that makes consistent
profits (everlasting goal … ;-)), I’m often face of the same situation
that needs some care.
Here is the situation :
Suppose I determine that the market must be traded with a long
And that I find a precise level that gives the end of this
In that case, if the price falls below this level, I close
the long position (or I open a short position for the hedging).
But, in some circumstancies, it may be interesting to follow the
trend if the price rises above this level - and the reopen the position or cancel the hedge.
And in the worst case, the price can play around this level a lot of times, and that back and forth movement can cause some important losses
(spread, slippage, …)
I would like to know if you have this similar problem and
reflection, and if you find some tricks to optimize these losses due to the
spread when opening and closing the hedging position that you can share with me ?
Many thanks in advance for your reply,
It has sense in some cases.
But there is little use for a simple full position hedge.
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