Master Hedging: A Pro Trader's Guide to Stress-Free, Consistent Returns

Master Hedging: A Pro Trader's Guide to Stress-Free, Consistent Returns

I. Introduction (0:00 - 0:35)

Previewing the topic of hedging strategies for traders

II. Hedging Explained (0:35 - 3:43)

Example of an experienced trader's hedging strategy
Using a 3:1 long-to-short ratio in a bull market
Shorting weak stocks, not strong stocks
Adjusting strategy for neutral markets

III. Benefits of Hedging (3:43 - 5:03)

Reduces stress and emotional trading
Increases reliability and consistency of profits
Allows for being "in tune" with the market

IV. Implementing Hedging Strategies (5:03 - 6:28)

Starting with smaller share sizes (100 shares)
Planning trades based on market bias
Deeper discussion on hedging strategies to come

Summaries for each main section:

I. Introduction:
In this video, a professional trader discusses hedging strategies that can significantly improve your trading performance and reduce stress levels. Get ready to explore a powerful approach often overlooked by many traders.

II. Hedging Explained:
Discover the hedging strategy employed by a highly successful day/swing trader who averaged $3-5 million yearly profits. Learn how he adopted a 3:1 long-to-short ratio in bull markets, shorting only weak stocks while going long on strong performers. This multi-sided approach allowed him to capitalize on market fluctuations.

III. Benefits of Hedging:
Hedging offers numerous benefits, including decreased emotional trading, increased profitability consistency, and a heightened ability to stay in sync with market movements. Experience a sense of "flowing" with the market's ebbs and flows, resulting in productive trading sessions that fly by.

IV. Implementing Hedging Strategies:
To start implementing hedging strategies, consider trading smaller share sizes (e.g., 100 shares) across multiple positions. Plan your trades based on the market's current bias, and be prepared for an in-depth discussion on executing hedging strategies effectively.

NEW: HEDGING TRADING STRATEGY. In today's video we discuss a strategy to hedge that makes it easier to manage volatility. This hedging strategy was used primarily for day trading by one of the most profitable traders that I've ever met. But it works for swing trading as well.

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In this video, Pete talks about the powerful but often misunderstood strategy of hedging your portfolio and active trades. He explains how hedging can significantly boost your bottom line while lowering stress.

Pete shares the story of a legendary trader he used to work with who made $3-5 million per year by expertly hedging his portfolio.

Newer traders can benefit from this approach by starting with just 2-3 positions of 100 shares each. This allows capitalizing on tape signals without being overwhelmed emotionally. He found trading 3 positions of 100 shares totally changed his experience, lowering stress while boosting reliability of P&L.

Pete encourages viewers to try trading 100-share pilot positions and promises future videos will dive deeper into specific hedging tactics. But the overall takeaway is that hedging allows syncing your trading with market conditions, riding waves rather than fighting trends. It's a subtle "dance" few can master, but well worth the effort for its profit potential.

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These YouTube stock market live stream videos are for financial education purposes. It's up to you to consult your financial advisor to make the final decision before you decide which stocks to buy

[nissanzamyadtech.]

True. It's the best Strategy in Trading any one can Master and benefit of it.

[yamitf]

such strategy IS as you said - a "thing of beauty", it is a dream come true, a level of achievement that not Meany will have.

[tonyvain]

Pete, I love your enthusiasm in teaching. I appreciate all your videos.

[billw]

Good morning everyone, exciting goal Pete

[rosmarshall]

🔥🔥🔥I loved this video!!! I'm a fan anyway, but this made so much sense to me. I'm really interested in options and while this is NOT options at all it is a hedge that I CAN and WILL do... anyone can do it and we don't have to be scared of the downside... the stories I hear about options. I LOVED this and no wonder your friend is such a great success. Thanks again Pete!

[gautier_music]

thanks for the video. How's the guy you are referring to?

[Billy-Box]

Incredible simple and logical. Thank You for this lesson.

[susanl]

Bonus! And exactly 8 minutes before the 7:30 am (5:30 am my time) meeting!

[joetoothman]

Good Morning Pete. Do you sell your Stock Trading Pro hats to the public? Tks.

[alexm]

Great video, when you are saying weak stocks, strong stock, what do you mean by that? Lot of deferent ways how we can analyze a stock...

[christ]

That's how I trade SPY example 3 long to 1 sort on sqqq.

[johnmazzola]

Hello. I have been using the Tradovate simulation and it doesn't seem to let me buy do both short and long trades at the same? Is there a Better platform for this? Doing more research to try to find a way to do it I'm finding things saying that hedging is illegal the USA with FOREX? Is that law only for FOREX? Is it legal to hedge with futures?

[timfaas]

Was hoping for some more specific trades or ideas

[subsonicflighttraining]

Did he do 3:1 in a Bear Market, for every 300 shares short in weak stocks, he has 100 shares in a relative strength strong stock in a weak market? You did not mention the bear case. This is an interesting concept. I think to implement it may be more difficult than it appears. He obviously did it very well. The only way to know is try it on small size. I do agree totally if you keep your position size very manageable for your account, you make better decisions. 100 shares though, is an arbitrary number. If you are buying 100 shares of NVDA and you have a smaller account, your stop is going to be so tight, you will get knocked out most of the time. You might have to buy 10 or 20 shares to keep the stop wide enough to give it breathing room. My ears perk up with hedging though. I love thinking about risk, I mainly forget about the upside, that can take care of itself with targets. Currently I use Butterflies on the SPX to hedge around 22 days out. They are cheap to put on, but I might try this with small size if I can plan out how to find relative weakness stocks. I am always looking for the strong ones, do more on this Pete, in or out of the community. Good stuff...

[markoveli]

I have 1 tsla contract already and I'm thinking to add another then buy a put to hedge but what delta and dte?

[_mytube_]

If he claps his hands then you know it's going to be a good video, lol. They're always good videos too.

[Soundista]

Did I miss the step by step strategy here?

[matthewclarke]

You have big hands, I can hear from the pitch of your clap.