Hedging is a risky business, and as conservative traders we are always treating it very seriously. However, our experience has taught us that certain situations may be handled more efficiently through this active protective method, rather than by simply taking profits or cutting losses immediately. We prefer precise hedging (trading the same currency pair of our hedged trade in the opposite direction), but in some (not very common) cases cross pairs may be used as well.

In our view, it is essential to consider hedging as a tool, and not as a way out of trouble. We believe that if a trader's market perspective is essentially wrong, he or she will not make it any better by hedging - thus often creating a lose-lose situation. If on the other hand his perspective is correct, patience may be an useful ally - which is why giving trades time to mature is such an important part of our strategy.

Opening Trades / Waiting / Managing Trades / Hedging