Can you be long and short at same time?

[Hakuna Matata]

It is too much of a hassle to keep closing and reopening the long term position just because you saw a short term setup or opportunity "imagine if you are a scalper or trading L2" , for example one may short JPY for a period of 1-2 years : BOJ etc etc , and still trade USD/JPY intraday ( Long or Short ) , this ofcourse is not done for hedging purposes or just to avoid taking a loss ...

It's not any more hassle than trading the short term opportunities. If you need to compartmentalise the trades like that, you are paying away money to do it with no economic benefit.

 

[Shakone]

And when you've answered that, respond to this. What am I missing that makes what I say in this post wrong?

http://www.trade2win.com/boards/dis...n-you-long-short-same-time-8.html#post2145026

I understand completely all the points that you - and everyone else have made against being long and short at the same time. Personally, I accept pretty well all of them, with one notable exception. I am willing to entertain the idea that there may be occasions when the pros outweigh the cons. I'm sure that Atilla, barjon and all the other members who believe the approach may be of merit also understand equally well the reasons for not doing it. The difference is that you wish to impose your belief that there can never be any circumstances, ever, under which it might be a valid approach. You have no right to do that, not least because there are members who have demonstrated throughout this thread that, on occasions - for them, it is indeed the right approach.

 

[Atilla]

You do realise that it would be better to close one of the trades than open another position in an opposing direction, right?

Say you are long EUR/USD from your "weekly" strategy, but you get a short signal on your "hourly" strategy - it's better just to close your "weekly long" instead of open another "hourly short".

You see that, right?

Yes absolutely.

But, the weekly long term trades are placed and left to play out with stops and limits. I don't have time to trade full time as I work. I visit and judge over weekends the shares and weekly trades.

The hourly intraday is what I do as and when I get the time.

 

[Shakone]

I understand completely all the points that you - and everyone else have made against being long and short at the same time. Personally, I accept pretty well all of them, with one notable exception. I am willing to entertain the idea that there may be occasions when the pros outweigh the cons. I'm sure that Atilla, barjon and all the other members who believe the approach may be of merit also understand equally well the reasons for not doing it. The difference is that you wish to impose your belief that there can never be any circumstances, ever, under which it might be a valid approach. You have no right to do that, not least because there are members who have demonstrated throughout this thread that, on occasions - for them, it is indeed the right approach.

I should also note that there are no pros. Nobody has come up with any pros. But I'm willing to entertain the idea that there may be occasions when the pros outweigh the cons.

 

[Hakuna Matata]

I just wanna hear what Timsk and Barjon have to say. Or Martinghoul, I can see him lurking.

 

[tar]

It's not any more hassle than trading the short term opportunities .

No it is , surely it is not far fetched to have a very long term position in the markets especially equities , and still day trade the markets day by day , usually this is done in different accounts and different size , but lets assume it is done in the same size , i can see that ....

 

[Hakuna Matata]

I should also note that there are no pros. Nobody has come up with any pros. But I'm willing to entertain the idea that there may be occasions when the pros outweigh the cons.

Has anybody come up with any cons? Like increased costs?

 

[Shakone]

I understand completely all the points that you - and everyone else have made against being long and short at the same time. Personally, I accept pretty well all of them, with one notable exception. I am willing to entertain the idea that there may be occasions when the pros outweigh the cons. I'm sure that Atilla, barjon and all the other members who believe the approach may be of merit also understand equally well the reasons for not doing it. The difference is that you wish to impose your belief that there can never be any circumstances, ever, under which it might be a valid approach. You have no right to do that, not least because there are members who have demonstrated throughout this thread that, on occasions - for them, it is indeed the right approach.

Has anybody come up with any cons? Like increased costs?

Well,

I fully accept that this increases cost of doing business. However, that is not really the issue. One should view this increased cost in the same way that you might view "temporary insurance cost".

 

[Hakuna Matata]

Well,

I fully accept that this increases cost of doing business. However, that is not really the issue. One should view this increased cost in the same way that you might view "temporary insurance cost".

OK. So, we've established that there are,

i) cons

and that there aren't

ii) pros

have I got this right?

 

[brewski1984]

..

 

[barjon]

............You go long, the trade has gone your way, but your conviction with the position has waned and you want to reduce your exposure. You can:

1) Sell it and go flat
2) Short it as a hedge

With 1), you have the OPTION to re-enter – either long or short – if another trade sets up. So you can if you want to, but you’re not under any obligation to make another trade.

Now, with option 2), you are left with two trades that you HAVE to make – cover your short and sell your long. By making one trade you effectively leg yourself into another one – for example, by covering your short you are net long again, a position you could just as easily put on having done option 1) first.

The difference is that you are OBLIGED to close both trades, and you have to do it before financing costs come in to play. You are putting yourself in the situation where you HAVE to decide when is a good time to leg out, rather than just having the OPTION to make another trade if you see fit...............

Oh, maybe you have been reading, HK. I have constantly made that exact point.

You will concede that taking the "hedge" you have locked in your profit? And if you exit both at the same time you will have incurred extra cost (yes, LV - I did know that ). A waste of time and unnecessary cost as you have all been trumpeting.

But you do not intend to exit both at the same time - you intend to stagger the exits to try and take advantage of current market direction when momentum is there in that direction. With a tight stop (more cost, lol) you will mostly fail, but you will sometimes succeed and run that trade for much more profit than the extra cost involved in setting it up.

I absolutely concede that you can do this anyway with your OPTION to trade and I have never suggested otherwise.

In essence you see the OBLIGATION to trade as a disbenefit - I see it as a benefit since it prompts you to trade in circumstances where you otherwise be reluctant for one reason or another - maybe because you have no set-up for that sort of momentum trade.

 

[Atilla]

Has anybody come up with any cons? Like increased costs?

As Barjon emphasized in his post and I'm saying this sincerely, a service is being offered in terms of trading alternatives - let's just call it flexibility.

Should we not be paying for this - dare I call it feature?

Don't want to start off another to & fro but I think Tar has put it well for persons like me.

 

[counter_violent]

Well,

I fully accept that this increases cost of doing business. However, that is not really the issue. One should view this increased cost in the same way that you might view "temporary insurance cost".

In turn, that additional trade might also produce another profit.

Ever wondered how it might be possible to post ...ewe i dunno... say 93 winning trades on the trot !

 

[Hakuna Matata]

No it is , surely it is not far fetched to have a very long term position in the markets especially equities , and still day trade the markets day by day , usually this is done in different accounts and different size , but lets assume it is done in the same size , i can see that ....

were talking about taking opposing positions in identical instruments from the same account (or against the same counterparty).

Tax wrappers etc have implications but that is not the point of this discussion.

 

[tar]

you are paying away money to do it with no economic benefit.

And it is not cheaper to keep closing and reopening the "weekly long term" trade every time you find a scalping opportunity !

 

[Shakone]

OK. So, we've established that there are,

i) cons

and that there aren't

ii) pros

have I got this right?

Sure, but

Maybe by having both positions open I'm talking about an exit strategy (which one to close off) rather than an entry one that would be required if I was making a new trade?

 

[Shakone]

In turn, that additional trade might also produce another profit.

Ever wondered how it might be possible to post ...ewe i dunno... say 93 winning trades on the trot !

The term spanish stops springs to mind

 

[Liquid validity]

It's not even that complicated.

say you wanna go short FTSE vs SP500 - via the ETFs (or futures, whatever).

You pick whatever ratio you wanna trade them in, and you put the respective trades on - say 3 FTSE to 5 ES (no idea what the ratio is). Your trade is that the ES will appreciate faster than the FTSE will (or the FTSE will depreciate faster than the SP500 will. same thing).

So, you have sold UK stocks, recieved GBP, and bought USD denominated stocks with the proceeds. To do this, you've had to convert the GBP you recieved into USD - by selling GBP and buying USD.

Now, let's suppose that the value of the stocks stays the same in relative terms, but the USD depreciates against the GBP. Now, when it comes time to close your position, the USD you recieve for selling your SP500 ETFs, when converted back into GBP, isn't enough to buy back all the FTSE you've sold.

To avoid this, when you put the trade on, you hedge your exposure to GBP/USD by putting on a long GBP/USD trade. That way, any losses you incur from a rise in GBP/USD depreciation are covered by your long cable position.

Thats where I want to go sooner or later.
Recommend any CME spreads (tickers welcome)?
How about this:
http://www.cmegroup.com/trading/interest-rates/sovereign-yield-spread-futures.html

Cheers for any info / feedback

 

[Hakuna Matata]

Oh, maybe you have been reading, HK. I have constantly made that exact point.

You will concede that taking the "hedge" you have locked in your profit? And if you exit both at the same time you will have incurred extra cost (yes, LV - I did know that ). A waste of time and unnecessary cost as you have all been trumpeting.

But you do not intend to exit both at the same time - you intend to stagger the exits to try and take advantage of current market direction when momentum is there in that direction. With a tight stop (more cost, lol) you will mostly fail, but you will sometimes succeed and run that trade for much more profit than the extra cost involved in setting it up.

I absolutely concede that you can do this anyway with your OPTION to trade and I have never suggested otherwise.

In essence you see the OBLIGATION to trade as a disbenefit - I see it as a benefit since it prompts you to trade in circumstances where you otherwise be reluctant for one reason or another - maybe because you have no set-up for that sort of momentum trade.

:whistling

Or, you can put a new position on when the momentum is there, and if it doesn't materialise, you can sit on your hands and don't have to pay away the spread again, or pay to finance the positions while you are waiting.

The "benefit" you speak of is entirely a product of your imagination.

Do you see that?

 

[Shakone]

:whistling

Or, you can put a new position on when the momentum is there, and if it doesn't materialise, you can sit on your hands and don't have to pay away the spread again.

The "benefit" you speak of is entirely a product of your imagination.

Do you see that?

I see it as a benefit since it prompts you to trade in circumstances where you otherwise be reluctant for one reason or another

That's a benefit?