I have some doubts about how to implement hedging on my strategy. I tried setting up a hedge when one of my positions retraces out of the money to a certain level (being pips or money) but not sure when to close it.
Noticed that some times hedge position closes way before position being covered so I get exposed again, so my question is when to close both positions.
Should I wait for both of them to be in the money?
or close the when they sum is equal to zero?
or should I keep opening “hedges” while original position is below a predefined level?
also, should hedges be hedged? can this lead to a margin call?
Look for best practices here. Thanks in advance.