yes rightly said hedging is like a two side coin if you use it properly then you can earn lot but if you failed to apply it properly then it will not be helpful
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yes rightly said hedging is like a two side coin if you use it properly then you can earn lot but if you failed to apply it properly then it will not be helpful
When a currency trader enters into a trade with the intent of protecting an existing or anticipated position from an unwanted move in the foreign currency exchange rates, they can be said to have entered into a forex hedge. By utilizing a forex hedge properly, a trader that is long a foreign currency pair, can protect themselves from downside risk; while the trader that is short a foreign currency pair, can protect against upside risk.
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Hedging is one of the strategy to limit losses, by opening an opposite direction with the original position wich already loss, so the floating minus can be stopped. This hedging strategy is not recommended by newcomers because it is needed a good psychology to hold such losses.
Hedging sometimes do when going on loss and traders realized that error so that lock with led to the opposite position. the position is a position of profit and opened is considered to have been in the highest or lowest level
In general, hedging is used to protect us from bigger losses resulting from any position.
Not recommended for beginners to hedge because it is very dangerous and requires skill and experience to close the position with benefits.
it's only use the probability to create profit from hedging, if you're intentionally use hedging to create profit then usually you must see the time first before you put two different position at once. but if you use hedging as emergency exit then you should watch the chart continously, so you won't miss any chance.
Other than trading for the purpose of profit making, some people go for hedging to minimize the loss when price movements go against their position. But handling hedging needs much real time practice to perform well other wise it might lead to extra loss due to spread and additional volumes....