Hedging strategy

[Ivo Zetticci]

Hedging strategy is a risk management strategy that is opening an opposite direction trade to reduce risk. Traders also open BUY and SELL orders at the same time in this trading strategy. However, many brokers don’t allow this kind of trading strategy. IF you want to use this strategy you should choose to trade with a broker like Eurotrader which allow all kind of strategies in the market.

 

[Peppul]

Hedging with forex is a strategy used to protect one's position in a currency pair from an adverse move. It is typically a form of short term protection when a trader is concerned about news or an event triggering volatility in currency market. There are two related strategies when talking about hedging forex pairs in this way. One is to place a hedge by taking the opposite position in the same currency pair, and the second approach is to buy forex options.
Strategy one. A forex trader can create a hedge to fully protect an existing position from an undesirable move in the currency pair by holding both a short and a long position simultaneously on the same currency pair.
Strategy two. A forex trader can create a hedge to partially protect an existing position from an undesirable move in the currency pair using forex options.

 

[Ivo Zetticci]

In forex, there is a variety of trading styles; one of those styles is hedging. It is highly popular strategy among traders. Hedging with forex is a strategy used to protect one's position in a currency pair from an adverse move. Eurotrader allow traders with all suitable features and options that help traders high in all types of trading options.

 

[Archipelago]

Hedging is a risk management method that involves beginning a deal in the opposite direction to minimise risk. In this trading method, traders simultaneously place BUY and SELL orders. Many brokers, on the other hand, do not allow this type of trading. If you want to apply this method, choose a smart and experienced broker who accepts all types of trading tactics.

 

[Jack Reacher]

Personally, I don’t like hedging based trading system; although Eurotrader broker allows all kind of trading styles here! But I am comfortable with scalping trading!

 

[moonchild]

I don't engage in hedging trading, because there's no way to make profit using it, it might be a good way to protect an account but what you should take note of is, when you're hedging, the position you're taking on opposite direction will be running on loss and whenever you close the position you will have a negative balance immediately, it is not a position that I enjoy being in.

You can also be unlucky and it start going opposite after you close your hedging positions, which will lead to more loss, so it is actually a no brainer.

Those that give excuses like, they are expecting a news, the best thing to do in such scenarios is to close the position and wait it out, Market has a way of compensating everybody and if you are not patient you'll definitely end up blowing up your account, I'll rather wait it out than to take a hedge position.

 

[Zootoxin]

Since risk and reward are typically inversely proportional, lowering risk will result in lower profits. Hedging is a difficult strategy for the majority of short-term traders, such as a day trader, to implement. Hedging is not very beneficial when the market is doing well or trending in the wrong direction.

 

[Asahi]

Hedging helps traders escape some amount of risk. To grow instant decision-making ability, traders should have high prudence and market analysis ability. Fundamental analysis should be run over the market. Frequent practicing and understanding the market environment help a trader fix this issue. FXOpulence is the best broker for professional traders and big investors.