I’m lost with that. Not sure it’s important for my kind of (modest) trading style but I wouldn’t miss something super important. Someone kind enough to explain ?
Thank you,
Laura
at its absolute simplest, it means holding equal trades, long and short, which nuetralizes any margin movement no matter where the price goes, simply because if youre down on one, youre up the same amount on the other, therefore margin remains the same UNTIL YOU CLOSE ONE !
the system works best if youre dealing with a decently funded account, as you have a “cushion” based on the equity in the account. On a smaller account, if your lot size is too large, when you sell one side you could find the other side, now unprotected margin, may be large enough to engender a margin call, the dreaded killer of newbs ! (and wildly extravegant rich traders also !)
enjoy and trade well
mp
Thank you a lot for the anwser. So, when my broker is saying “hedged margin is 1/2 of initial margin”, what does it mean ?
That it prevents you from “deleting” your account by automatically creating the kind of cushion you are talking about ?
PRECISELY !
mp
Good to know that forex trading is sometimes cushioned 
Do you know if most brokers are offering the same kind of protection ?
Its an automatic part of using “brokers” and the MT4 package.
ECN’s are different, as you need a subaccount to be able to hold an opposite position in the same currency, although no problem with main account if its a DIFFERENT currency.
REMEMBER, i only put this out as information which you must test a lot before trying — its only real problem (as long as you know where your prices are going) is what happens when you exit ONE trade — if youve gone in BIG, you will go from NO margin problems to one really BIG one on the “wrong” trend youre left holding.
You must be scrupulusly careful with money management here, but take a look on a demo and see if it helps !
enjoy and trade well
mp
That’s a precious advice Time to practice that on a demo account.
Even though I am not sure it will have any use IRL, I intend to be as cautious as possible and this is some kind of a risky tactic.
in todays market, the moves on the higher timeframes dont complete untill usually overnite or at 5pm est, and during the day most of the activity is scalping the one and 5 min charts.
this allows you to HOLD your main trade and take advantage of a counter trade if there is one.
it should not be part of the arsenal until you know the whole armory, but its a sensational tool once you have become edumacated !
mp