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about hedging

Discussion in 'Beginners Bootcamp' started by JUACOCO, Feb 27, 2011.

  1. JUACOCO

    JUACOCO Recruit

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    Hello, guys...I'm new inthis business.
    Could all of you guys with a long experience, tell me how dangerous or beneficial cold be to hedge the positions? Is it correct?
     
  2. f-man

    f-man 4Xangels Representative

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    There is no YES or NO to the answer if it is correct or not
    As any other trading system, there are many Hedging strategies in the market.
    If you study a system and demo test it for a couple of months with success, then you can go for it. With the experience you will have from demo testing it, you will adjust it to your personal style and feel comfortable trading it.

    Remember that Hedging is not allowed by US based Brokers
     
  3. JUACOCO

    JUACOCO Recruit

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    Thanks a lot!
    Is there any reason why the USA brokers don't allow to hedge positions?...It's no fear for traders!
     
  4. f-man

    f-man 4Xangels Representative

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  5. JUACOCO

    JUACOCO Recruit

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    Hello guys, I've been looking for a real forex broker for a long, but more I read about them, more bad news I get. It looks like all of them are really burglars. Would some body tell me about a good one, please?
     
  6. Jeff Martinez

    Jeff Martinez Recruit

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    Hedging is often considered an advanced investing strategy, but the principles of hedging are fairly simple. With the popularity – and accompanying criticism – of hedge funds, the practice of hedging is becoming more widespread. Despite this, it is still not widely understood. Most people have, whether they know it or not, engaged in hedging. For example, when you take out insurance to minimize the risk that an injury will erase your income or you buy life insurance to support your family in the case of your death, this is a hedge.
     
  7. William Barnes

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    Forex is a highly competitive and risky market. In forex market, traders are engaging in foreign currency exchanges. As exchange rate is a highly volatile factor, forex traders require various risk management techniques to minimize their losses. Hedging is one of the widely used risk management techniques that help traders to avoid unwanted risks. In hedging, trader will take simultaneous buying and selling position on a currency pair so that net risk will be zero.

    For example: you are supposed to work with EURO/USD currency pair, if there is loss in short position, there will automatically be a profit in long position, so net risk will be zero. That’s why; various risk management techniques are becoming popular day by day.
     
  8. Morten

    Morten Corporal

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    hedging positions is recommended. many investment companies are using this strategy. but you have to undestand that they trade stocks and derivatives, not forex as usualy
     
  9. bigdolly

    bigdolly Master Sergeant

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    Hedging involves using futures and options and many traders simply don't understand them because of their complexity
     
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  10. downtrend

    downtrend Sergeant

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    Hedging can be dangerous if you had not experience, not know market analysis . In this case your both positions can be locked or go to loss. In hedging when market is in your side in one position you are able to minimize your loss in other position that is towards loss. It is good technique that results when you use it wisely.
     
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