Hedging vs Stop Loss
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Thread: Hedging vs Stop Loss

  1. #1
    Hello men,

    I've something in mind about hedging a position versus placing a stop loss because of it.

    Say like I start a long position for GBPUSD and it goes against me. Now, instead of placing a stop loss and using the trade reach that SL, I start a short position once it reaches the price point.

    The net loss will remain equal to this and when I start other transactions and insure that net loss I'll simply close the place and be done with it.

    Plogically speaking, I think hedging the position is a better thing to do.

    What do you guys think?

  2. #2
    Quote Originally Posted by ;
    quoteMany People confuse this type of trading with the quot;Martingale methodquot; a system of betting mathematically proven to lose you all of your cash in the long run.
    I agree, hedge trading can be confused with martingale -- making progressively larger transactions in the opposite direction to cancel a losing trade. As stated some of the brokerage houses utilize hedging. It is a matter of trading style that you're familiar with.

  3. #3
    I really don't hedge. I know the mechanism and it won't benefit me.

  4. #4
    Quote Originally Posted by ;
    quote Hey man,it is fairly easy - established just a little on the market conditions and much more on money/risk management. I don't use a indior and observe chart in candles on 1d and 4h time frames. I trade cable - . Hedging is confused by people with diversifiion. Hedging is a tool which employs price dynamics, not price levels.I'm trying to squeeze some time to put all of it on a ribbon - something like Simply hedging or similar. Peek in my activities next week - would attempt to start the ribbon to fully explain it.
    Hi michealpelly,
    I understand you post is quite old but hopefully you're still around. I'm struggling although I'm interested in learning how to use hedging. Would you indie me some reading or place a pictures and explain when the Dollar trade drop?
    Many thanks.

  5. #5
    To hedge or not to hedge is dependent upon your system imo.
    I try to pick tops and bottoms in index futures like Nasdaq100, Nikkei225 and ASX200.
    In the bottom of the swings I buy and at the top of the swing I sell.
    BUT the last swing may not be completed yet and I might be buying at the wrong moment.
    And that's where my hedge comes in, because I really don't understand how far price could still return.

    Was last week in Nasdaq with the Dollar in place.
    Made a boat load of cash with the election jitters from the US because of the hedge and much more buy trades on the way back up.
    thank you Mr. Trump!

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