what is hedging ?

so after you download candlestick pattern free in my previous post here i am going to learn you hedging stategy in forex.

Strategy one
A forex trader can create a “hedge” to fully protect an existing position against unwanted movements in the currency pair while maintaining a short position and a long position in the same currency pair. This version of a hedging strategy is called “perfect hedge” because it eliminates all the risks (and therefore all potential gains) associated with trading while hedging is active.

Although this business configuration may seem strange, as the two opposite positions offset each other, it is more common than you think. This type of “hedging” often occurs when a trader holds a long or short position as a long-term trader and also opens up short-term trading for a short-term market imbalance.

Interestingly, currency traders in the United States do not allow this type of coverage. Instead, they are required to network the two positions and treat the contradictory trade as a “close” order. However, the result of a “billed” operation and a secret operation is the same.

Strategy two
A forex trader can create a “hedge” to partially protect an existing position against unwanted movements of the currency pair by using forex options. The use of currency options to protect a long or short position is called “imperfect coverage” because the strategy excludes only a portion of the risk associated with the exchange (and therefore only a portion of the potential profit).

In order to achieve imperfect coverage, an operator who is a currency pair may purchase put option contracts to reduce his risk of loss, while an operator with a short currency pair may purchase option contracts. purchase to reduce them. Your risk bullish.

along with this fdo not forget top learn imli candlestick pattern