Can you be long and short at same time?

[tar]

If you open a new position you have to post the margin, right?

I get that point mate , but many fx and cfd brokers who allow such trading wont take any margin if you open a double position ( long/short ) , anyway margins shouldn't be a problem hence you have 100:1 leverage, so it is very tiny and you are going to hold the position for a short time anyway ...

 

[Hakuna Matata]

I get that point mate , but many fx and cfd brokers who allow such trading wont take any margin if you open a double position ( long/short ) , anyway margins shouldn't be a problem hence you have 100:1 leverage, so it is very tiny and you are going to hold the position for a short time anyway ...

Well, if they retain any margin at all - no matter how small - for having "double positions" of the same size, you are incurring an opportunity cost.

Not to mention that, in order to go flat (which you will, at some point), you have to make an additional two trades:

IN -> OUT will cost less that IN -> IN -> OUT -> OUT.

with me?

 

[tar]

Well, if they retain any margin at all - no matter how small - for having "double positions" of the same size, you are incurring an opportunity cost.

Not to mention that, in order to go flat (which you will, at some point), you have to make an additional two trades:

IN -> OUT will cost less that IN -> IN -> OUT -> OUT.

with me?

Anyway as i said most of them don't ask for any margin if you have a double position , its a broker thing .

Re the commission : it is the same , so instead of opening a new trade then closing it , you have to close your existing long term position then reopen it again .

 

[Hakuna Matata]

Anyway as i said most of them don't ask for any margin if you have a double position , its a broker thing .

Re the commission : it is the same , so instead of opening a new trade then closing it , you have to close your existing long term position then reopening it again .

I explain that scenario in this post:

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

 

[tar]

Not to mention that, in order to go flat (which you will, at some point), you have to make an additional two trades:

IN -> OUT will cost less that IN -> IN -> OUT -> OUT.

with me?

It is not like that , remember you have a one long term position and you daytrade 20 times a month ... i don't see a difference mate .

 

[Hakuna Matata]

It is not like that , remember you have a one long term position and you daytrade 20 times a month ... i don't see a difference mate .

Every time you enter a day-trade, you are committing yourself to exiting it.

You don't need to do this.

You are committing yourself to making trades that you can otherwise avoid.

 

[Atilla]

It is not like that , remember you have a one long term position and you daytrade 20 times a month ... i don't see a difference mate .

At the end of the month do a stat look up on trades:

1. Number of
2. Duration held
3. Pips made/loss
4. Costs

You'll get some interesting numbers compared to effort and reward.

An old friend once told me its like the difference between eating in a restaurant and eating sandwiches.

 

[tar]

Every time you enter a day-trade, you are committing yourself to exiting it.

You don't need to do this.

You are committing yourself to making trades that you can otherwise avoid.

I don't see how really ? cuz also everytime you close/amend my long term position for the sake of daytrading ( 20 times a month ) you are committing yourself to reopen/reinstate my original long term trade , remember i want to stay long the SP or the USD/Yen for example as a position trade or as an investment ....

 

[Liquid validity]

http://www.cmegroup.com/trading/interest-rates/sovereign-yield-spread-futures.html
Page 12:
http://www.cmegroup.com/trading/interest-rates/files/Sovereign-Yield-Spread-Futures-Overview.pdf

CME have created a contract to avoid creating the spread yourself
with 2 instruments and double costs.
This is with a recognised and valid method.

Why some people still insist same instrument / same size has any merit baffles me.
Keeping control of costs and seeking cost reduction is one of the few
things you can control.
So why relinquish that control for no benefit?

 

[Shakone]

I don't see how really ? cuz also everytime you close/amend my long term position for the sake of daytrading ( 20 times a month ) you are committing yourself to reopen/reinstate my original long term trade , remember i want to stay long the SP or the USD/Yen for example as a position trade or as an investment ....

So suppose long term you are long 50 contracts, and you also want to play it short intraday, 5 contract size.

So what is wrong with - when you want to go short intraday, you reduce your position size to 45 contracts long, and re-add in those 5 contracts where you would exit the intraday trade to get back to 50 contracts? Have you lost anything by doing this?

 

[tar]

So suppose long term you are long 50 contracts, and you also want to play it short intraday, 5 contract size.

So what is wrong with - when you want to go short intraday, you reduce your position size to 45 contracts long, and re-add in those 5 contracts where you would exit the intraday trade to get back to 50 contracts? Have you lost anything by doing this?

Nothing wrong with that , however for some scalpers and daytraders it may be more practical to just open a new short term trade , remember they do it frequently day in day out ... each to their own i guess ...

 

[tar]

http://www.cmegroup.com/trading/interest-rates/sovereign-yield-spread-futures.html
Page 12:
http://www.cmegroup.com/trading/interest-rates/files/Sovereign-Yield-Spread-Futures-Overview.pdf

CME have created a contract to avoid creating the spread yourself
with 2 instruments and double costs.
This is with a recognised and valid method.

Why some people still insist same instrument / same size has any merit baffles me.
Keeping control of costs and seeking cost reduction is one of the few
things you can control.
So why relinquish that control for no benefit?

In the situation i gave "position trading and scalping or daytrading simultaneously " the costs are nearly the same , i'm not talking about "hedging" ....

 

[Shakone]

Nothing wrong with that , however for some scalpers and daytraders it may be more practical to just open a new short term trade , remember they do it frequently day in day out ... each to their own i guess ...

Why is it any harder or easier? You sell 5 contracts, and then buy 5 contracts. Just click, no difficulty.

So then do you agree, you lose nothing by doing this over the method of entering a separate trade shrot 5 contracts?

 

[tar]

Why is it any harder or easier? You sell 5 contracts, and then buy 5 contracts. Just click, no difficulty.

So then do you agree, you lose nothing by doing this over the method of entering a separate trade shrot 5 contracts?

Doesn't make a difference right ? each to their own , as i said some may find it more practical to just day trade as a separate trade , to see their entry level and where to exit more easily , instead of amending their long term position at a certain level and then placing stops and limits to amend that position back at certain targets and price levels , doesn't make sense for some daytraders , i can see that ...

 

[Shakone]

Doesn't make a difference right ? each to their own , as i said some may find it more practical to just day trade as a separate trade , to see their entry level and where to exit , instead of amending their long term position at a certain level and then placing stops and limits to amend that position back at certain targets and price levels , doesn't make sense for some daytraders , i can see that ...

For personal convenience. Understood. But in terms of affect to the account, and costs, what I suggested isn't in any way worse. We're agreed on that, yes?

So it is never better financially, but you may find it easier to think that way.

 

[Liquid validity]

In the situation i gave "position trading and scalping or daytrading simultaneously " the costs are nearly the same , i'm not talking about "hedging" ....

Yes I know the discussion is not about spreads.
That is the best example of practical cost reduction I can think of.

As far as position trading and scalping, lets be honest, how many people actually
do that.
The two disciplines are polar opposites, most position traders think scalping
is churning, most scalpers think position trading is buy and hope.

Very very few people are capable of doing both simply due to the fact
typical trade duration is usually a psychological choice, not necessarily
efficiency based, more personal suitability.

Warren Buffett doesn't scalp.
Paul Rotter doesn't position trade.
Most people are specialists of one kind or another.

Although I do agree, your example is the least damaging cost wise,
even if I don't see the point.

 

[Hakuna Matata]

I don't see how really ? cuz also everytime you close/amend my long term position for the sake of daytrading ( 20 times a month ) you are committing yourself to reopen/reinstate my original long term trade , remember i want to stay long the SP or the USD/Yen for example as a position trade or as an investment ....

Consider this scenario: You are long 50 ES futures as Shakone suggested, and you get a short term bearish trade which puts you 5 lots short. Then, while you have these positions on, for whatever reason you decide you want to close both trades (i.e. be totally flat - the reason is not important).

By adjusting your long 50 futures position to only being long 45 contracts, you have to sell 45 contracts to go flat.

Or, by holding 50 lots long and 5 lots short, you have to buy 5 lots back and sell the other 50 - thereby trading a total of 55 lots.

So to get the same result (being flat), you can either trade 45 times or 55 times. Doing 55 trades will always cost you more than doing 45 trades, be it in the form of the spread or commissions.

Whether you are long 45, or long 50 + short 5, the P&L of the trades are identical. The difference - and why one approach is better, assuming you want to make money - is that circumstances can arise (as I've explained here) where you have to do more trades than are necessary.

It doesn't matter how liklely or unlikely you think this situation is, the economics behind the transactions make one more desirable than the other. Nobody rational would expose themselves to more costs - or even the possibility of more costs - than absolutely necessary. By having the two positions on rather than adjusting your existing one, you are exposing yourself to the possibility of:

1) Additional trade costs
2) Additional financing costs
3) Opportunity costs

This is why, if your aim is to make the most (or lose the least), you should amend your existing position rather than open a new one. It is de facto better for your account balance.

 

[cablemonster]

Consider this scenario: You are long 50 ES futures as Shakone suggested, and you get a short term bearish trade which puts you 5 lots short. Then, while you have these positions on, for whatever reason you decide you want to close both trades (i.e. be totally flat - the reason is not important).

By adjusting your long 50 futures position to only being long 45 contracts, you have to sell 45 contracts to go flat.

Or, by holding 50 lots long and 5 lots short, you have to buy 5 lots back and sell the other 50 - thereby trading a total of 55 lots.

So to get the same result (being flat), you can either trade 45 times or 55 times. Doing 55 trades will always cost you more than doing 45 trades, be it in the form of the spread or commissions.

Whether you are long 45, or long 50 + short 5, the P&L of the trades are identical. The difference - and why one approach is better, assuming you want to make money - is that circumstances can arise (as I've explained here) where you have to do more trades than are necessary.

It doesn't matter how liklely or unlikely you think this situation is, the economics behind the transactions make one more desirable than the other. Nobody rational would expose themselves to more costs - or even the possibility of more costs - than absolutely necessary. By having the two positions on rather than adjusting your existing one, you are exposing yourself to the possibility of:

1) Additional trade costs
2) Additional financing costs
3) Opportunity costs

This is why, if your aim is to make the most (or lose the least), you should amend your existing position rather than open a new one. It is de facto better for your account balance.

ever get the feeling you have won the battle but lost the war.

 

[Hakuna Matata]

if anyone disagrees with or does not understand what I have said then please speak up x

 

[cablemonster]

if anyone disagrees with or does not understand what I have said then please speak up x

i think the penny has finally dropped now lol look on the bright side, trading is a competition.