hedging

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Can someone please explain hedging in a more fuller sense and how it affects our trades if used?

 

Hedging is simply the art of opening two opposite trades, with both serving as protection in case anything goes wrong. There is more to it, but this is the principle that guides it. My broker does not allow hedging, but anyway, but I am VERY OK with them.

 

Hedging is used to prevent us loss in future.

 

Hedging is a strategy in which we protect our account because to fluctuating prices that are not favorable to us. more simply like this: we buy 0.01 lots on EUR / USD, suddenly price reverse direction, then we do sell a position in 0.01 as well. So the loss would be covered.

 
gaban:
Hedging is a strategy in which we protect our account because to fluctuating prices that are not favorable to us. more simply like this: we buy 0.01 lots on EUR / USD, suddenly price reverse direction, then we do sell a position in 0.01 as well. So the loss would be covered.

Thank you very much, very fine illustration!

 

Hedging enables a trader to open trades in two different ways on a currency pair. It helps protect a trader from long term loss. To me, this is the best assurance a trader could get from his broker. It was thus shocking when the cops (the regulators) shut down this blessing. As traders were struggling to swallow this bitter pill, they impose FIFO on us. Gosh, many brokers ran offshore to protect their innovation, competitiveness, tax-comfort and most importantly to still help protect their clients form rigidity of regulation. Hmm, I guess they didn't really move to evade tax nor dupe clients easily without compensation. Even our onshore brokers still bite their clients in scams and then their customer support goes dumb! Then a little miserable compensation from the regulators is all you could get.

 

Sorry guys if am off line, just needed a place to write this.Am so glad to be back to be with you lovely folks on this forum.

 

then why is it not allowed by most of the brokers?

 
vic84:
then why is it not allowed by most of the brokers?

Don't think I have a quick answer to that now, am curious too. So I would go and find out, and if I do I would let you know.

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