Hope we all are conversant with what hedging is all about?
I am going to share with us a new strategy that can make you maximum profits provided you abide by the rules.
Let's begin:
It is easy to make profits using this system as long as you have a sound technical analysis.
By using a Forex broker that accepts hedging, open two trades that are direct hedges.
Leave the trades to run for some time ( depends on your analysis).
When you think one of the trades have reached it's highest high or lowest low and likely to reverse, close the second trade in profit and wait for the losing trade to turn to your favor by a certain number of pips (depending on your analysis).
Then, close your trade either in loss, break even or even profit.
Overall, you've made a profit regardless of whether you lost the second trade or closed it at break even.
Let's give an instance:
Say you opened two positions Buy and Sell EUR/USD (same lot sizes) both at 1.4000. You allowed the trades to run for 1 day (depends on your analysis).
After 1 day, the current price of EUR/USD is 1.3000. This means that the long position is losing by 100 pips and the short position is gaining by 100 pips. Floating net profit remains zero.
At this point, if EUR/USD is strongly oversold and likely to reverse or by any other analysis, you detect that EUR/USD is likely to rise - you just need to close the short position in profit of 100 pips and leave the long position to run.
After a reverse in direction of the pair, say the bullish position has now returned to 1.3930 (-70 pips) loss. You can now close the trade in loss of -70 pips, wait for break even or even for a few pips profit on the long trade.
I am going to share with us a new strategy that can make you maximum profits provided you abide by the rules.
Let's begin:
It is easy to make profits using this system as long as you have a sound technical analysis.
By using a Forex broker that accepts hedging, open two trades that are direct hedges.
Leave the trades to run for some time ( depends on your analysis).
When you think one of the trades have reached it's highest high or lowest low and likely to reverse, close the second trade in profit and wait for the losing trade to turn to your favor by a certain number of pips (depending on your analysis).
Then, close your trade either in loss, break even or even profit.
Overall, you've made a profit regardless of whether you lost the second trade or closed it at break even.
Let's give an instance:
Say you opened two positions Buy and Sell EUR/USD (same lot sizes) both at 1.4000. You allowed the trades to run for 1 day (depends on your analysis).
After 1 day, the current price of EUR/USD is 1.3000. This means that the long position is losing by 100 pips and the short position is gaining by 100 pips. Floating net profit remains zero.
At this point, if EUR/USD is strongly oversold and likely to reverse or by any other analysis, you detect that EUR/USD is likely to rise - you just need to close the short position in profit of 100 pips and leave the long position to run.
After a reverse in direction of the pair, say the bullish position has now returned to 1.3930 (-70 pips) loss. You can now close the trade in loss of -70 pips, wait for break even or even for a few pips profit on the long trade.
- When closed at a loss of -70 pips, you make a net profit of +30 pips compared with your previously closed short trade.
- When closed at break even, you make a net profit of +100 pips
- When closed at a few pips in your favor, you make a net profit of +100 pips + "value of the few positive pips".
Hope you got the logic in this new hedging strategy.
Credit: Valforex.com
Learn how to use this Forex Hedging Strategy to minimize losses
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