So the calc is only useful in my situation if I wanted to work out if I would have been better letting the bet run instead of hedging?
Trading What I see !?
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ShaunWhite
- Posts: 10495
- Joined: Sat Sep 03, 2016 3:42 am
It works out the hedged pl.
If you don't hedge your PL is just what it is.
You can compare those two, but over a long period they'll be pretty much the same. That's because the only difference between the two scenarios is the bet which you use to hedge, and that will be at a price that is fair/zero Ev/correct/accurate. Fair value bets have a zero expected value so hedging or not hedging doesn't affect your gross amount. If it did, then it would show you were somehow obtaining good or poor value hedging bets and that could be a clue to an edge on its own.
It will affect your commission though so that might be worth thinking about, eg big wins and losses vs small wins and losses.
OK there's a lot of food for thought in thereShaunWhite wrote: ↑Mon Aug 22, 2022 2:31 pmIt works out the hedged pl.
If you don't hedge your PL is just what it is.
You can compare those two, but over a long period they'll be pretty much the same. That's because the only difference between the two scenarios is the bet which you use to hedge, and that will be at a price that is fair/zero Ev/correct/accurate. Fair value bets have a zero expected value so hedging or not hedging doesn't affect your gross amount. If it did, then it would show you were somehow obtaining good or poor value hedging bets and that could be a clue to an edge on its own.
It will affect your commission though so that might be worth thinking about, eg big wins and losses vs small wins and losses.
Thanks again Shaun
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ShaunWhite
- Posts: 10495
- Joined: Sat Sep 03, 2016 3:42 am
No probs Leeds. Its just about making that mental connection between 'trading' and the fact your PL is just the sum of actual bets that all run, and each win or lose. 'Hedging' is just another of those bets and has a pl like any other bet.
.... And of course understanding that when betting, PL is always a function of value. Its not generally easy to understand the value associated with your 'trading: bets, or even necessary, but BSP is one of those points that's well understood, and it is as close to a breakeven bet as you can get.
Knowledge is always good but don't let this distract you too much for now, at your stage I'd always recommend hedging, it's just a point of interest for if you can't for some reason.
.... And of course understanding that when betting, PL is always a function of value. Its not generally easy to understand the value associated with your 'trading: bets, or even necessary, but BSP is one of those points that's well understood, and it is as close to a breakeven bet as you can get.
Knowledge is always good but don't let this distract you too much for now, at your stage I'd always recommend hedging, it's just a point of interest for if you can't for some reason.
Thats looking really good.
If you dont mind me asking, approx how many trades per day and approx stakes you are using to achieve this?
Thanks for info. Sure it will continue in same vein as you clearly put the work in to get there
Will have another read through of this thread as think some learnings to be had
1. Experience in the markets, it takes time for the brain to understand it
2. Thinking beyond the obvious
3. Value is everything long term
4. Focus on what fits your mode of working, for me that is coding and automation
5. Don't lose lots of money! Ie.Keep things as small as possible for as long as possible, trading randomly you won't lose much, so if you are then your unconscious bias is leading you the wrong way..
6. Think about who might be the other side of your trade
New to this forum and just spent the last few weeks reading this thread. It's like a feelgood christmas movie. Seeing GOATS highs and lows over a year and more was fascinating.
Great to see you having success now and it was earned, which makes the success so much sweeter.
To those who contributed, well done for sticking with the help and advice. I think this will, forever, be my favourite thread.
Great to see you having success now and it was earned, which makes the success so much sweeter.
To those who contributed, well done for sticking with the help and advice. I think this will, forever, be my favourite thread.
Thank you Allankane, it has been a good year, and I hope this thread spawns others to do the same.allankane wrote: ↑Tue Dec 27, 2022 11:21 amNew to this forum and just spent the last few weeks reading this thread. It's like a feelgood christmas movie. Seeing GOATS highs and lows over a year and more was fascinating.
Great to see you having success now and it was earned, which makes the success so much sweeter.
To those who contributed, well done for sticking with the help and advice. I think this will, forever, be my favourite thread.
A Happy New Year to you all.