What is a Hedge?

[moonletter]

I actually implement hedging strategies to secure capital and to add my balance and margin, hedging to offset the trade was floating Mingus. I use the hedging combining the longterm. Since I also like taking risk if future prices are not coming back, but I was trial and error with this strategy, so it does not have a big profit.

[pdatta20]

A hedge is simply a term used to describe an investment partnership setup by a money manager. It can take the legal form of a limited liability company or a limited partnership so that if the company goes bankrupt, the creditors can't go after the investors for more money than they've put into the fund.

[purohit]

G ap bilkul theek keh rahy hen hedging ke liye poori tarah technical studies hona bahut zaruri hota hai.mera be yahi kehayl hy k naye traders ko hedging ki jagah stop loss aur take profit ka use karna chhaiye .

[ernestina]

Hedge Definition: A Hedge is a trading strategy whereby an investor seeks to reduce the risk of an adverse price movement on a security, commodity or currency that he owns in one market by taking a position or combination of positions in other markets. This "hedging" practice began when public futures markets were established in the late 1800s to allow for efficient price protection in the agricultural commodity markets. The risk mitigating process has expanded over the years to include futures contracts for hedging currencies, precious metals, energy, and interest rates. Although futures contracts are the most popular medium for hedging strategies, other vehicles typically used are forwards, swaps, options, insurance policies, and many types of over the counter derivative products. An investor will use this strategy if he is unsure of what the market may do and wants to protect his downside risk. Setting a forex stop-order is not necessarily considered a "hedge" since it can be accomplished in the same market, yet it does mitigate downside risk. Hedging requires a cost-benefit analysis since hedging instruments do require premiums and commissions or spreads to be paid. Typically, an investor knowledgeable in options will sell a call option to offset the cost of buying a Put option. The Put guarantees downside protection and potential for gain, while the Call limits the upside, thereby "locking in" a profit on the security or currency.

Hedging is not accepted by all brokers and some broker use a rule called first in first out. This mean that you will close the first trade you set first even if it is going in loss. I do not like these type of brokers and I prefer Instaforex who allow hedging to occur on trading platform.

[najaf12345]

Hi
Hedging typically is really benficial trading technique. it prevent us from a very big reduction and lock the little profit. hedging is certainly not so easy
and additionally simple we will need a high calculation for applying this device properly,

[didikebenaran]

hedging is a method where one trader can buy and sell a pair at the same time to maintain and save his equity.. even hedging helps in controlling free margin which enables a trader to do transactions and increase the equity when hedging is involved in the trading

but the hedging trading we have to trade that might make you better with good analytical and be able to make a margin so that you will waste so we are careful about using this hedging

[kalponick]

I really dont understand hedging that much.. Just know that buying a pair with same stop-loss and take profit target with higher risk to reward ratio.. But I like to play simple.. the way I trade, it do not support hedging at all.. This is why I use classic stop-loss and take profit to trade with simplicity..

[kakatua]

I suppose that the hedge is a way of trading is relied upon to get out of deals, the lowest charge practicable loss which requires that the trader has brimfull pro technical analysis because the security method is real dicey and sometimes you can not criterion transactions

[GembeL_FOREX]

Hedging typically is really beneficial trading technique. It prevents us from a very big reduction and lock the little profit. Hedging is certainly not so easy and additionally simple. We will need a superior calculation for applying this device properly.

true that you say that hedging is one strategy for maintaining the position of the value of a currency or goods. and the hedge is not recommended for any transaction, are temporary only.

[jmsblack18]

be careful if you want to implement this system because we are going against the grain of our first entry, it is true we can minimize these risks. but do not get too far
to suppress

If we do trade with hedging that doesn't mean we going against our first entry, in contrary such strategy is built to safe our wrong decision in first entry. For me the simple way to reduce stress and double our income in end of closing position is using the hedging or double hedging method.