What do you think about hedging?

[Poinwan]

Whichever way you consider hedging, what matters is how well you apply this strategy. It can turn out to be risky ofr it can help you to manage your risks on investment. A trader should first take time to understand what hedging entails before deciding whether to use it or not. It also depends on whether your broker allows you to use it or not

 

[Pelanali]

Certainly hedging can be risky for inexperienced traders. This is why not so many of them are using this technique. However, it might be good option for keeping investment risks under control, but it takes time to master it

 

[Jurlare]

Hedge funds are becoming popular with the passage of time and people are trusting them. There is always a risk associated with financial investments but we have to take risk for getting a reward. Investment is better than keeping money in the banks. What do you think?

 

[Shing1985]

I am aware of certain strategies that employ hedging to mitigate losses.

Example:

• Long on a Buy signal but price drops.
• Now a Sell signal.
• Short on the signal, but rather than close the long it is held open and more lots added to the short.
• Once the loss on the long order is sufficiently mitigated by the extra lots on the short, they are both closed leaving only a standard-sized short.

 

[FxPro Trader]

I am aware of certain strategies that employ hedging to mitigate losses.

Example:

• Long on a Buy signal but price drops.
• Now a Sell signal.
• Short on the signal, but rather than close the long it is held open and more lots added to the short.
• Once the loss on the long order is sufficiently mitigated by the extra lots on the short, they are both closed leaving only a standard-sized short.

When we are using a Hedging trading strategy we have to understand that this also has some risks and we have to carefully plan our hedged trades in the Forex markets. If we will be able to time this correctly then we can eliminate our losses from the markets.

 

[mrindice]

Certainly hedging can be risky for inexperienced traders. This is why not so many of them are using this technique. However, it might be good option for keeping investment risks under control, but it takes time to master it

Hedging is used to reduce risk exposure. Which risk arising from hedging are you talking about?

 

[FxPro Trader]

Hedging is used to reduce risk exposure. Which risk arising from hedging are you talking about?

It is true that many of the Forex traders are actually using the Hedging strategy to reduce the associated risks with their trading. But we must also remember that the risks will remain unless we can close the hedge in secure manner.

 

[mrindice]

Hedging is a good tool to choose what risk exposure you want to take and which to eliminate. I use hedging tools at Hotforex such as open positions which has strong negative correlation which ensures I will bear only limited risk of loss.

 

[FxPro Trader]

Hedging is a good tool to choose what risk exposure you want to take and which to eliminate. I use hedging tools at Hotforex such as open positions which has strong negative correlation which ensures I will bear only limited risk of loss.

I know that doing Hedging is a better way of managing the trades when the time are uncertain but what is more clear is that we must be prepared for the uncertain times and also do our hedging with some plan.

 

[RainbowRain]

I will say this: if a trader cannot find more accurate market entries and therefore hedges his positions with an opposite order on the same pair, simply freezing the loss, then he is also very likely to be unable to exit this lock correctly and will only increase his loss.