Hedging is a very important technical technique in the foreign exchange market. In foreign exchange transactions, many investors will use hedging to reduce transaction risks and even achieve profitability.

How to profit from foreign exchange hedging transactions?

Most foreign exchange traders use the hedging function, just because they are in the wrong direction, but are reluctant to stop the loss and admit defeat, they make a reverse order, which is the so-called “lock order”. The advantage of the lock order is that the loss is basically controlled and will not expand. Of course, at this time, because you open more positions, the interest and commission paid will increase. However, just like the popular saying-it is easy to lock the order and difficult to unlock! Unlocking is indeed a very difficult task. In addition to the situation where the market fluctuates repeatedly, it is better to be relieved. If there is a unilateral big rise or fall, it will greatly increase the difficulty of unlocking.

How to profit from foreign exchange hedging transactions?

  1. Don’t forget to stop loss just because of hedging

After all, stop loss is the kingly way to correct wrong trades. Only when you are doing the right trend, but the timing of entry is not good, you can only suggest that you use hedging to temporarily deal with it. In this way, you can not only ensure the safety of your account, but you can also make a profit from the hedged order. But if you find that you are wrong about even the big trend, you must stop loss instead of hedge. Even if he thought that the big trend was right, hedging was done. Once the big trend was found, he was wrong. You must not hesitate at this time. You must immediately close the order in the wrong direction. Just keep the list with the right trend.

  1. Hedging as early as possible

If the big trend is right, it’s just that the time to intervene is not good. Hedge it immediately. Don’t wait until the open position has a large loss and then go for it as a last resort. This will weaken the hedging function and make future unlocking even more difficult. In other words, if you choose to use the hedging function, you must actively use it, wait until you are passive and only think of it, and then use it, I am afraid that things will be more complicated.

  1. When hedging, it is best to hedge 100%, that is, completely lock up. If you make 1 lot of orders, don’t just hedge 0.1 lots just because your account is a bit ugly. If you take the initiative to hedge, you need to make hedge orders to make money. Why do you only place such a small order? Fully hedged, the account is safer, and the profit of the hedged order will be more.
  2. To reduce the size of your transaction is your advice to most traders. Excessive weighting is a common problem for most traders. Hedging when there is a high position and a large order volume will increase the transaction cost of the account sharply, and will make the remaining margin ratio too small, making future unlocking difficult and difficult.
  3. Don’t treat hedging as a conventional method. You can only use it when you look at the general trend and only when the time of intervention is not good. Moreover, it can be used if and only in this situation.

What are the tips for foreign exchange hedging transactions

Are foreign exchange hedging techniques reliable? Is hedging good? Investors who have used it should know that hedging is a common trading method in the foreign exchange market. By doing long and shorting the same asset at the same time, it can avoid single-line trading. The purpose of risk and even profit.

What are the tips for foreign exchange hedging transactions

  1. Don’t forget to stop loss just because of hedging

After all, stop loss is the kingly way to correct wrong trades. Only when you are doing the right trend, but the timing of entry is not good, you can only suggest that you use hedging to temporarily deal with it. In this way, you can not only ensure the safety of your account, but you can also make a profit from the hedged order. But if you find that you are wrong about even the big trend, you must stop loss instead of hedge. Even if he thought that the big trend was right, hedging was done. Once the big trend was found, he was wrong. You must not hesitate at this time. You must immediately close the order in the wrong direction. Just keep the list with the right trend.

  1. Hedging as early as possible

If the big trend is right, it’s just that the time to intervene is not good. Hedge it immediately. Don’t wait until the open position has a large loss and then go for it as a last resort. This will weaken the hedging function and make future unlocking even more difficult. In other words, if you choose to use the hedging function, you must actively use it, wait until you are passive and only think of it, and then use it, I am afraid that things will be more complicated.

  1. When hedging, it is best to hedge 100%, that is, completely lock up. If you make 1 lot of orders, don’t just hedge 0.1 lots just because your account is a bit ugly. If you take the initiative to hedge, you need to make hedge orders to make money. Why do you only place such a small order? Fully hedged, the account is safer, and the profit of the hedged order will be more.
  2. To reduce the size of your transaction is your advice to most traders. Excessive weighting is a common problem for most traders. Hedging when there is a high position and a large order volume will increase the transaction cost of the account sharply, and will make the remaining margin ratio too small, making future unlocking difficult and difficult.
  3. Don’t treat foreign exchange hedging as a conventional method. You can only use it when you look at the big trend and only when the time of intervention is not good. Moreover, it can be used if and only under such circumstances.