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hedging pairs
Anggota Sejak Aug 29, 2019
1 pos
Apr 25, 2020 at 20:15
Anggota Sejak Feb 09, 2020
26 pos
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
Anggota Sejak Feb 12, 2020
21 pos
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.
Anggota Sejak Jun 22, 2020
77 pos
Anggota Sejak Jul 10, 2020
34 pos
Aug 17, 2020 at 08:09
Anggota Sejak Feb 22, 2011
4862 pos
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
Anggota Sejak Jul 20, 2020
341 pos
Anggota Sejak Mar 16, 2021
477 pos
May 26, 2021 at 01:09
Anggota Sejak Mar 16, 2021
477 pos
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
Anggota Sejak Oct 16, 2020
137 pos
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.
Anggota Sejak Mar 17, 2021
536 pos
Anggota Sejak Jul 23, 2020
759 pos
Anggota Sejak Jul 23, 2020
869 pos
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