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hedging pairs
Membro Desde Aug 29, 2019
1 posts
Apr 25, 2020 at 20:15
Membro Desde Feb 09, 2020
26 posts
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
Membro Desde Feb 12, 2020
21 posts
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.
Membro Desde Jun 22, 2020
77 posts
Membro Desde Feb 22, 2011
4862 posts
Jul 21, 2020 at 08:25
Membro Desde Feb 22, 2011
4862 posts
WaleedYKammel posted:
Hi Dears .
which pairs now i can hedge ?
You can hedge any apir
Membro Desde Jul 10, 2020
34 posts
Membro Desde Feb 22, 2011
4862 posts
Aug 17, 2020 at 08:09
Membro Desde Feb 22, 2011
4862 posts
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
Membro Desde Jul 20, 2020
341 posts
Membro Desde Mar 16, 2021
477 posts
May 26, 2021 at 01:09
Membro Desde Mar 16, 2021
477 posts
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
Membro Desde Oct 16, 2020
137 posts
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.
Membro Desde Mar 17, 2021
536 posts
Membro Desde Jul 23, 2020
759 posts
Membro Desde Jul 23, 2020
869 posts
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