Hello men,
So I came across the word hedging and browse through a few threads on different forums. In my perception, payoff is some kind of martingaling where to result is high to be break even or in profit.
By way of example, input a trade (let us say 0.05) and instead of a stop loss, you include a halt (or buy) order that doubles the amount in lot dimensions of your first place. Once the trade goes like 30 pips (or depending upon your egy) contrary to you, it triggers the second place (0.1). If the 2nd place proceeds in profit and you achieve break-even in total profit, you shut the initial place and let this one run.
Repeat until the trade goes in one way.
My initial though was : damn, that is actually intelligent! Worst and case you end up in a reduction in case you grab the range and maintain entering transactions and can't add positions. Finest instance a break even or a profit.
But everything that seems amazing and easy, usually has a hook. And I cannot seem to work this out hook except you've got to keep adding positions ever since your trade jumps between the range of 30 pips and you have a reduction.
Since I'm new to hedging and recently discovered it, what is your view in this way of trading? Is there a drawback to this? I do not know ....
Cheers,
Ray