Hedging between two accounts

Beginner Questions
1

Can anyone provide an explanation on how hedging works between two accounts? I am interested in learning more about this strategy.

2

check this topic as a start Currency Hedging Definition | Forexpedia™ by BabyPips.com

2 Likes
3

i tried this approach at the first stage of trading and the experience is not good at all. lost major equity by that

1 Like
4

Sure, hedging between two accounts is a risk management strategy that involves opening opposite positions in two separate trading accounts to reduce overall risk exposure.

For example, let’s say you have a long position in EUR/USD in one trading account, and you’re concerned about potential market volatility that could result in losses. To hedge against this risk, you could open a short position in EUR/USD in a separate trading account, which would offset any potential losses in the first account.

By hedging in this way, you can protect yourself from potential losses while still maintaining exposure to the market. I suggest you to watch this video as well.

Wish you all the best!!

1 Like
5

what would you gain, by doing that, that you couldn’t have achieved simply by closing the original trade (and paying one commission instead of two)? :face_with_raised_eyebrow:

2 Likes
6

awesome I will thanks :innocent:

7

That’s exactly why I m trying to figure this out how it works.
@ProfesorPips mentioned an useful link maybe you find it useful too. :hugs:

8

thanks a bunch. so you are saying that hedging is possible between two accounts?
i will watch the video then. thanks again.

1 Like
9

You don’t recommend hedging though? did I get you right?

10

Of course it is. I’m in Canada where hedging on one account is legal, but my broker is OANDA and they’ll let you open 25 different “sub accounts” if you choose to. Simply buying EURUSD on one account and selling EUDUSD on the other is hedging. But why are you doing this?

Some people hedge to protect a position, not make money. If a position is going against you on the short term but you believe the long term trend will eventually win out, you can open a temporary hedge position to protect that long term position rather than closing it.

There are all sorts of hedging strategies out there as well, just type it in the search bar up top there and start reading.

1 Like
11

i don’t

(i also think it’s probably the most widely misunderstood single issue there is, among aspiring forex traders)

i’m completely open to learning something new and changing my mind, if anyone can provide a realistic and sensible answer to the very simple question i asked 6 posts above, but it’s a question i’ve probably asked 100 times over the last 30+ years, and so far, apparently, nobody can, so i must admit i’m not exactly holding my breath

2 Likes
12

that’s so true.

1 Like
13

i could not agree more.
oh sounds great. have you ever that 25 accounts?

1 Like
14

… and by the way, just in case anyone’s thinking of saying that hedging is an effective way to partially close a position, to mitigate the impact of whatever, and their broker doesn’t allow them to do that, so they have to “hedge” to get round the problem, that isn’t an answer to my question above: it’s simply a sign that the person saying that needs a better broker :wink:

1 Like
15

Of course it is.

1 Like
16

I do not know Flamingo… You hate hedge always but me and a lot of people are actually using it!
Maybe you can help me to leave these strategy. Go on and share your reasons… Why do you hate it too much?

1 Like
17

Thanks for your helpful explanation about hedging. It’s cool that in Canada you can legally hedge on one account and your broker lets you open multiple sub-accounts to make hedging easier. I was curious about hedging, and your explanation about using it to protect a position in the short term while waiting for the long term trend to win out was interesting. You also mentioned that there are different hedging strategies out there that I can look up, which is awesome. Thanks again for your help, let me know if you have any other tips on hedging!

18

I really dig your approach to hedging strategies. It seems like whether to use hedging or not really depends on each trader’s personal trading style, don’t you think?

19

Totally agree with you, and I’m actually pretty curious about his attitude too. I’ve seen his comments on different forums and it seems like he really knows what they’re doing when it comes to trading. I’m definitely open to learning more about their strategies!

1 Like
20

i don’t hate it as much as not see any possible benefit to it that can’t more easily and efficiently and at lower cost be achieved simply by closing or partially closing the first position instead of opening another

it seems to me to be completely unnecessary and to incur additional commission costs without any benefit i can understand

i’m happy to change my mind if anyone can answer my question above about what benefit can be achieved through hedging that can’t be achieved more simply by closing or partially closing the first position instead of opening another

but as i mentioned above, this is a question i’ve probably asked 100 (now 101) times over the last 30+ years, and so far, apparently, nobody can, so i must admit i’m not exactly holding my breath - that’s all! :slight_smile:

1 Like