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hedging pairs
Mar 19, 2020 at 09:20
1,267 Angesehen
18 Replies
Mitglied seit Aug 29, 2019
1 Posts
Mar 19, 2020 at 09:20
Hi Dears .
which pairs now i can hedge ?
which pairs now i can hedge ?
Apr 25, 2020 at 20:15
The process of hedging involves a single currency pair or two different currency pairs that have a common base currency. Some traders also use correlation to find different currency pairs with positive or negative correlation with each other, and then enters a buy or sell position according to their market analysis. So it's up to you what to do.
Jul 20, 2020 at 16:22
This is the basic hedging procedure on the market:
Buying Euro - EUR/USD
Sale of Swiss franc dollar - USD/CHF
These two assets have a strong negative correlation, which means that when the euro rises, the Swiss franc falls by the same value, equally.
Thus, if the acquired asset loses value, the trader receives a loss amount due to the position on the second asset, which reacts with the same amplitude.
Buying Euro - EUR/USD
Sale of Swiss franc dollar - USD/CHF
These two assets have a strong negative correlation, which means that when the euro rises, the Swiss franc falls by the same value, equally.
Thus, if the acquired asset loses value, the trader receives a loss amount due to the position on the second asset, which reacts with the same amplitude.
Mitglied seit Jun 22, 2020
69 Posts
Jul 21, 2020 at 06:01
Depends on the conditions of the market, but EUR is usually good one to hedge
Mitglied seit Feb 22, 2011
4573 Posts
Jul 21, 2020 at 08:25
WaleedYKammel posted:
Hi Dears .
which pairs now i can hedge ?
You can hedge any apir
Mitglied seit Jul 10, 2020
32 Posts
Jul 27, 2020 at 07:59
It’s very much dependent on market conditions. But generally speaking, major currencies like USD, GBP and EUR are good ones to hedge.
Mitglied seit Feb 22, 2011
4573 Posts
Aug 17, 2020 at 08:09
Shalinara posted:
This is the basic hedging procedure on the market:
Buying Euro - EUR/USD
Sale of Swiss franc dollar - USD/CHF
These two assets have a strong negative correlation, which means that when the euro rises, the Swiss franc falls by the same value, equally.
Thus, if the acquired asset loses value, the trader receives a loss amount due to the position on the second asset, which reacts with the same amplitude.
That would sometime work but sometimes not
see https://www.myfxbook.com/forex-market/correlation/USDCHF-EURUSD
Mitglied seit Jul 20, 2020
278 Posts
Dec 17, 2020 at 12:04
Hedging is the most dangerous trading strategy if you don't have any knowledge about it. So, gather proper knowledge, before using hedging on your trading.
Mitglied seit Mar 16, 2021
447 Posts
May 26, 2021 at 01:09
ElliotCooke posted:
Hedging is the most dangerous trading strategy if you don't have any knowledge about it. So, gather proper knowledge, before using hedging on your trading.
Yes, I agree with you. Not learning hedging strategies can be detrimental to investment.
Jun 01, 2021 at 10:39
Shalinara posted:
This is the basic hedging procedure on the market:
Buying Euro - EUR/USD
Sale of Swiss franc dollar - USD/CHF
These two assets have a strong negative correlation, which means that when the euro rises, the Swiss franc falls by the same value, equally.
Thus, if the acquired asset loses value, the trader receives a loss amount due to the position on the second asset, which reacts with the same amplitude.
Do you have a particular reason to choose this pair or this is just an example? Do all the pair with same base currency have a negative correlation?
Mitglied seit Mar 17, 2021
494 Posts
Jul 28, 2021 at 10:35
ElliotCooke posted:
Hedging is the most dangerous trading strategy if you don't have any knowledge about it. So, gather proper knowledge, before using hedging on your trading.
I agree with you.
Mitglied seit Jul 23, 2020
696 Posts
Aug 04, 2021 at 10:31
New traders should try it in major pairs.
Mitglied seit Jul 23, 2020
816 Posts
Sep 03, 2021 at 16:49
It is a kind of strategy to minimize the risk.
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