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    Thread: Hedging strategies

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      Lightbulb Hedging strategies

      Hedging is the process of holding two offsetting positions at the same time. The purpose is to mitigate losses in the first position with gains in the second position. This type of trading protects you from a margin call since any loss in the hedged position will be countered by a gain.

      buy one currency pair, e.g. EUR/USD, and then sell another pair with similar price movements. In this case, you might sell EUR/JPY in the hopes that any gain in the latter pair will partially offset the losses of the former pair. In effect, you are holding a long and short for the euro currency.

      please suggest all your hedging strategies which will be useful for new traders

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      There are a lot of uses in hedging, you can also use these to control your losing trades, but there are other brokers that dont allow hedging strategy because it is more advantageous for traders and it should be used with a lot of practice before use in live trading, it can sometime bring more problems than solutions.

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      Hedging strategy can giving advantage and disadvantage,in certain cirumstances,hedging can make profit if trader can oen lock hedging at best price in reversal time,but will giving wider loss if they open lock in false reversal,but many strategy using hedging to reduced loses like as martingale or averaging

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      Quote Originally Posted by techboy View Post
      There are a lot of uses in hedging, you can also use these to control your losing trades, but there are other brokers that dont allow hedging strategy because it is more advantageous for traders and it should be used with a lot of practice before use in live trading, it can sometime bring more problems than solutions.
      Hedging helps us to control our losing trades and protects us from losses. Hedging actually also helps us to make some profits. It depends on the way that we want to use it.

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      Quote Originally Posted by chidi View Post
      Hedging helps us to control our losing trades and protects us from losses. Hedging actually also helps us to make some profits. It depends on the way that we want to use it.
      i think hedging trading strategy is same with gambling because we open trnsaction at both direction together. i think stop loss better than hedging to lock our loss

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      I have tried hedging strategy before. It is true that you can protect your capital. But the problem is when are you going to make money out of it. Many times we do not know when to close position. I prefer to close position with loss if I do not know how the market moves.

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      I have not been able to hedge like this. transactions of more than 1, and use the different pair. sometimes it makes me confused. because I have to share my konsentrasin to the other pair.

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      hedging or scalping from dangerous ways to go on on generally you must put limits for the two positions you will going to open or you will fall in point of bad money management and then margin call will touch your account
      hope is beautiful

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      Quote Originally Posted by muthu View Post
      Hedging is the process of holding two offsetting positions at the same time. The purpose is to mitigate losses in the first position with gains in the second position. This type of trading protects you from a margin call since any loss in the hedged position will be countered by a gain.

      buy one currency pair, e.g. EUR/USD, and then sell another pair with similar price movements. In this case, you might sell EUR/JPY in the hopes that any gain in the latter pair will partially offset the losses of the former pair. In effect, you are holding a long and short for the euro currency.

      please suggest all your hedging strategies which will be useful for new traders
      yea. great tool to use to avoid margin call. and even can give more profit if been used at the right time.
      for example like. you know that the price will going short and you already in, and you see an opportunity to get profit from retracement before it continue down. then you enter buy . so now you have 2 trade buy and sell on same pair(hedging)

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      Quote Originally Posted by sastrowarwer View Post
      i think hedging trading strategy is same with gambling because we open trnsaction at both direction together. i think stop loss better than hedging to lock our loss
      Im not agree. Hedging isnt gambling strategy.
      Ntil now i still use it to facing big impact news. N still working.

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