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Hedging
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ele020

Member Since Apr 15, 2020  9 posts ele020 Sep 15 at 05:58
Mohammadi posted:
The purpose of this thread hedging is useful or not. In order to me, hedging is an investment to reduce the risk of adverse price movements. Practically hedging brings no profit because of your intention. When I open a trade, I always try to support my trade even the trend is going against me. So better to close the trade and open a new one when it seems to be in right trend.


To be honest I never understood the concept of hedging and how it works well for any trader. As per the concept, you place buy and sell order simultaneously on the same instrument with same lot size. You earn when one of your trades start going into profit. But the other one is surely going in losses. Yes, you surely earn from the difference from the magnitude of either direction, but their are spreads as well. So how does it actually work for a retail trader? I never understood this.

Its such a vague strategy for me as per my past experience.

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