hedging? so if I interpret the strategy correctly - she is figuring not much more upside from here, but we don't know how big the pullback will be. If it pulls past her longs, she will still be in the money because of her short. If it pulls back to an entry point where her longs are still in the money, she closes out and makes money both ways?
its a good strategy, but what if there is no pullback...then the loss on the shorts will reduce the profit on the longs...what about setting s stop loss, and re-entering when the trend resumes...cost wise it will be the same as for the short entry and exit?
that is the drawback of hedging - you sacrifice further profits in favour of increased risk protection - like fixing your bond, for example. You can, in theory, use it for trading as well - but you have to be operating in different timeframes. No point hedging for a week if your trading timeframe is a week - that is zero sum. But if you are trading OST's TA recomendations, for example, then the strategy could work. Short the market but keep your longs (no point what so ever to short your longs!). Me, for example, I figured out a long time ago that you don't make money trading stocks on a single wave. You have to ride multiple waves to get a proper risk reward. So you have to ride the pullback. Now why not give yourself some protection on the pullback?
wish i did always exit on stop-losses mark. no i am guilty of indecision at times.i do not exit on profit targets,but do exit if i feel there will be no growth for some time to come....of course this does not refer to installments or property but only shares and derivatives held for capital gain