What is a Hedge?

[Aliakbar2016]

is ka baray ma kuch kaha nhi ja sakta ha kio ka is ka mujy be nhi pata ha is liye ma is ka baray ma nhi keh sakta ho ya be ek kam ka tarika hota ha trading ma bas itna hi pata ha kio ka ma ny ya be kisi se suna tha kafi time pehly

[Akhterp]

for example gold hum ley letay hein gold ki price hai 1255 aor ap ney is ko sell kar diya hai ab gold ki price up ja rahi hai ap ko confirm ho gaya hai kay price up he jaye gi ap wahin per gold ko buy bhi kar letay hein aor jab apki buy wali trade profit main aa jati hai to ap us profit wali trade ko chalne dein aor loss wali ko close kar dein yeh hedging hoti hai.

[jhoradpak]

i don,t like hedge many time lose big money when your enter one trading buy and sell this is the hedge but i am not like hedge trading many time lose big money when your close one trading buy or sell so this is the not best way for earning the money only buy or sell in the one point so i don,t like hedge trading

[feng]

hedg very annoying for traders. when we do hedg one trade and wait for the trend to change so we can cancel the hedg
we can close one purchase or trade purchase if we close the purchase and our trend may not change along with our price and price increase,
it will burn our account so always avoid For hedg try to use stop loss and make stamena for book loss.
it will give you the courage for the next trader but hedg make you confused and be prepared

[vacation]

Hedging is a way to protect against increases or decreases in commodity prices, currency pairs.
I hear it's mostly used by big business houses. In Forex trading too many people use it,
not stop loss to protect existing accounts and avoid losses under the opposite market movement.
Still not popular among merchants because it is not as easy as it looks.
CMIIW

[letti]

I've heard of a hedge before but I do not think we can make a position of support to an existing position.
I thin it, very good and better than hedge. But we can use it if we will face the call margin
and our capital down to the end we can make it but we must try to save our trading and our capital from needing hedge

[noder]

hedging it, it means you open two positions one but and one sell and both have the same
lot volume that we use when the market reverses us with big losses and we are afraid
to face the call margin before getting profit or market back to it, s direction original
but it takes a good chance to get out therefore, s not easy to do it

[sufiyan22]

bhia hedg emeans 1 hi jaga se buy aur ossi pair pr sell laga fo point same hona lazmi ni hn bass ye is lie use hota hnk eap loss ki trade me mazeed loss se bacha sakoo bass vese ye account washed hone ke time use hota hn

[nomanraza74]

Forex me hedging bohat hi aham tool hai is me jab ap ko bohat zeyada loss ho raha hota hai to is me ap saim direction me double volume ki trading kar ke apna loss recover kar sakte hain is ko hedge kehte hain.

[zafarg8]

The primary methods of hedging currency trades for the retail forex trader is through:

Spot contracts, and
Foreign currency options.


Spot contracts are essentially the regular type of trade that is made by a retail forex trader. Because spot contracts have a very short-term delivery date (two days), they are not the most effective currency hedging vehicle. Regular spot contracts are usually the reason that a hedge is needed, rather than used as the hedge itself.

Foreign currency options, however are one of the most popular methods of currency hedging. As with options on other types of securities, the foreign currency option gives the purchaser the right, but not the obligation, to buy or sell the currency pair at a particular exchange rate at some time in the future. Regular options strategies can be employed, such as long straddles, long strangles and bull or bear spreads, to limit the loss potential of a given trade. (For more, see A Beginner's Guide To Hedging.)

Forex hedging strategy
A forex hedging strategy is developed in four parts, including an analysis of the forex trader's risk exposure, risk tolerance and preference of strategy. These components make up the forex hedge:
Analyze risk: The trader must identify what types of risk (s)he is taking in the current or proposed position. From there, the trader must identify what the implications could be of taking on this risk un-hedged, and determine whether the risk is high or low in the current forex currency market.
Determine risk tolerance: In this step, the trader uses their own risk tolerance levels, to determine how much of the position's risk needs to be hedged. No trade will ever have zero risk; it is up to the trader to determine the level of risk they are willing to take, and how much they are willing to pay to remove the excess risks.
Determine forex hedging strategy: If using foreign currency options to hedge the risk of the currency trade, the trader must determine which strategy is the most cost effective.
Implement and monitor the strategy: By making sure that the strategy works the way it should, risk will stay minimized.
The forex currency trading market is a risky one, and hedging is just one way that a trader can help to minimize the amount of risk they take on. So much of being a trader is money and risk management, that having another tool like hedging in the arsenal is incredibly useful.