Forex Hedging

Forex Hedging is a trading strategy that enters both a long and a short position at the same time which reduced and eliminates risks.  However, for new traders it is difficult to know when to exit which trades in order to end up with a net profit.

There are many people and programs out there advocating that hedging is a must when trading the forex.  Using hedging strategies such as entering trades to hedge against corrections, or hedging during news announcements.  I'm here to tell you there is a better way.  Hedging is a strategy for those who do not know what is going to happen, for investors who are not educated.  Those investors should not be participating in the forex market.  The forex market is for those who are educated in forex trading.

There is a better way and that is to be able to identify market movement, with the correct knowledge a trader can easily identify the start of a countertrend or retracement.  Trading retracements is adding risk, and typically retracements can turn quickly and resume the preceding trend, in the event of placing a hedged trade in the direction of the retracement, there may be momentary profits in the direction of the trend and utilizing the forex hedging strategy, however without precise closing of the hedge trade those profits quickly turn into losses. 

The best hedging strategy is not to use a a hedging strategy at all.  It is best to have a forex trading strategy that protects profits.  The most profitable and safest means of reducing risk is to close the profit trades when a retracement is identified, and then re-enter the forex trade when the preceding trend continues.  Meanwhile all trading risk is eliminated, and this method maximized forex profits.

We do not recommend forex hedging, as this is an advanced forex system that should be left to the very few experts who specialize in this type of trading.  Doing this type of trading for 95% of all traders results in losses.  Do not ever trade a system that you do not fully understand.