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hedging pairs
Miembro desde Aug 29, 2019
posts 1
Apr 25, 2020 at 20:15
Miembro desde Feb 09, 2020
posts 26
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
Miembro desde Feb 12, 2020
posts 21
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.
Miembro desde Jun 22, 2020
posts 77
Miembro desde Feb 22, 2011
posts 4862
Jul 21, 2020 at 08:25
Miembro desde Feb 22, 2011
posts 4862
WaleedYKammel posted:
Hi Dears .
which pairs now i can hedge ?
You can hedge any apir
Miembro desde Jul 10, 2020
posts 34
Miembro desde Feb 22, 2011
posts 4862
Aug 17, 2020 at 08:09
Miembro desde Feb 22, 2011
posts 4862
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
Miembro desde Jul 20, 2020
posts 341
Miembro desde Mar 16, 2021
posts 477
May 26, 2021 at 01:09
Miembro desde Mar 16, 2021
posts 477
ElliotCooke posted:Yes, I agree with you. Not learning hedging strategies can be detrimental to investment.
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.
Jun 01, 2021 at 10:39
Miembro desde Oct 16, 2020
posts 137
Shalinara posted: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?
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.
Miembro desde Mar 17, 2021
posts 536
Miembro desde Jul 23, 2020
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Miembro desde Jul 23, 2020
posts 869
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