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Thread: Closing Previous Orders in a Martingale Sequence

  1. #31

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    IX Thank you for the info...you have done your homework well!! What are the typical settlement days of the month for Forex Options? Are they known like the 15th of the month or do they just expire a given number of days from purchase?

  2. #32
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    Quote Originally Posted by BillR View Post
    IX Thank you for the info...you have done your homework well!! What are the typical settlement days of the month for Forex Options? Are they known like the 15th of the month or do they just expire a given number of days from purchase?
    Dont mix futures with options :-) (most failure)
    futures = synchron contracts = you must
    options = asynchron contracts = you can take it or not

    futures:
    major expiration day=3rd friday every 3rd month
    minor expiration day=3rd friday every month
    futures are rolled automatically into the next period (cost of carry)

    options:
    contract duration mostly 3, 6, 9, 12 month, every day there are options released, mostly from banks, payment normally 2days after contract ends
    Currently there are over 10.000 options worldwide available
    You must differ in long -or short term contracts and:
    stocks, stock options, indices, currencies, bonds, etf's, etc's, knock outs, vanillas, exotics and much more

    further: you can have also option on futures... underlying is a stock, bond or currency and you buy an option on a future, is often used on commodities (gold, silver, gas, oil, palladium, porkbellies, and so on => chicago mercantile)
    example:
    oil 100USD
    buy future for 3 months, you belive the price will be 150USD in three month, you buy a call option on the future, if the oil is rising to 150USD in three months, you have the right with your option to get futures at the price of 100USD, you take the futures and sell it for 150USD
    if the oil is not rising, calculate the delta, and "in the money, at the money" and waste the option to the basket = you lost the option contract price.

    currency example:
    buy 100000 GBPUSD (1lot)
    buy put option 100000 GBPUSD 12month contract, cost (if you have a good options broker!) 960EUR
    if forex G/U goes up 100 point in a year,you have won 1000 on forex - 960 loss at option
    if forex G/U goes up 1000 point,in a year you have won 10000 on forex - 960 loss at option
    but realize your win of 10000 must dividide by 12 month! = approx 900 bucks each month
    to get rich, you must have 20-50 lot at forex and 20-50 options on the other side at the same time, all before tax....

    this is an very easy example!

    you see, options have much more options :-) to trade but is without knowledge very difficult

    hope this helps

    IX
    Last edited by ixbone; 03-08-2009 at 18:25.

  3. #33

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    IX Thank you for taking the time to teach me...you are definitely very knowledgeable!! The use of options to Hedge your FX positions is very good thinking....With my strategy I am automatically hedging my positions!! Take a look here Tweaking Martingale.... This thread actually was intended to optimize the Hedging side of the positions more accurately.....My coding skills are still developing and I'm still trying to incorporate Funyoos suggestion into the EA....not successful yet...

  4. #34
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    Quote Originally Posted by BillR View Post
    IX Thank you for taking the time to teach me...you are definitely very knowledgeable!! The use of options to Hedge your FX positions is very good thinking....With my strategy I am automatically hedging my positions!! Take a look here Tweaking Martingale.... This thread actually was intended to optimize the Hedging side of the positions more accurately.....My coding skills are still developing and I'm still trying to incorporate Funyoos suggestion into the EA....not successful yet...
    You are welcome

    Well, your system is not bad, but as i noted trading martingale without knowing what is the market in present and in the past is really dangerous. The one and only 100% hedge is forex and options, all other pseudo hedges.
    I have tested a similar system with scripts long time ago....was one of my first tests in forex, you know i was coming form futures and option market, there is hedging normaly.

    my sugesstions to your system:
    - use one or more indis for perfect entries and exits, this (maybe)eliminates large drawdowns, which recovers many days later (example: nzd/usd, chf/jpy no recover at this time)
    - use quarter trading
    - use more pairs for diversification and less lot size
    - build some syntethic pair hedges
    - parachute trading, if your trades in a free fall, take the ripcord to get out immediatly of all trades to secure your account

    so i think, your system combined with some good options, you can get stable profits with a large funded account

    IX

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