How to Start Hedging Mid-Challenge/ Late

Disclaimer

Hedging mid-to-late in a challenge, particularly during drawdown, can result in losses exceeding the recovery amount if the challenge ultimately passes. For instance, in the video example above, with a recovery amount set at $500, you may recover $400 if the challenge fails. But if it passes, you could lose $600—$100 more than the recovery amount. This risk increases with deeper drawdowns; in a 50% drawdown, you might recover $250 if the challenge fails but lose $750 if it passes. Therefore, we generally advise against mid-challenge hedging in significant drawdowns unless you are prepared for these risks.

You can try to offset these risks, if the challenge passes. You can add any losses beyond the original recovery amount to the new recovery target for the next phase or first payout attempt, aiming to recover all hedging losses. However, please consider these risks carefully before making any hedging adjustments.

In summary, we generally recommend against mid-challenge hedging in deep drawdowns, as it can complicate your trading strategy and add additional risks.

If you understand these risks and would like to proceed anyways, please follow the guide below:

This guide explains how to hedge your account during a trading challenge, even if you initially started without hedging. It covers the steps to adjust your hedge bot and account balance to align with your challenge performance. This is useful if your challenge fluctuates and you now want to introduce hedging to balance the risk.

Let's assume you've been in a challenge for a week, and your account has experienced ups and downs. You didn't hedge at the start, but now you decide to hedge it. Here's what to do:

1. Log in to your hedge account.
2. Check your account balance. For this example, let’s assume the account balance is $5,000.
   
   

If you are unsure how to attach a hedge bot to your account, refer to our hedge bot setup tutorial or contact our tech support team for assistance.

In this example, your challenge is down by 2%, which translates to a $2,000 loss on a $100,000 challenge account. The goal is to ensure the hedge bot reflects this drawdown.

You will need to adjust the hedge bot to reflect the performance of your challenge. If your challenge is down 2%, you want the hedge bot to show +20% to balance it out.

1. Click Show Options on your hedge account platform.

2. Adjust the Start Balance to reflect your desired hedge percentage. In this example, you are aiming to set the account to +20%.

   • A general calculation:
     • If 10% represents $500, then 1% is approximately $50.
     • For a 2% drawdown on your challenge, you’ll need to adjust your start balance to $4,900 (from $5,000).

   You can also fine-tune this by testing different amounts, like $4,950 or $4,850, to get the exact percentage you need.

Step 4: Important Considerations

• Even though the hedge bot may now show +20%, this does not mean you have actually recovered any funds. It simply reflects the hedge configuration.
• There will be no trades shown in your account history, as no actual recovery has occurred.

By adjusting the hedge bot, you ensure your hedge bot aligns with your current challenge performance. This setup helps the hedge bot make more accurate trades moving forward. Remember, this adjustment is more about aligning the system rather than reflecting actual profit recovery.

If you encounter any issues or need further assistance, feel free to contact our support team.