I just end up losing when I try to hedge

Beginner Questions
1

Hellooo! :open_mouth: I’m pretty new to learning about hedging and actually giving it a try since I just found out it’s not illegal here in the PH. :open_mouth: I thought it can help manage risks. :open_mouth: But for the times I’ve tried doing it, I just ended up with losses. There was even a time that I was losing for both my long and short trades. :sweat_smile: Do you guys have any tips or things I should watch out for? :pray:

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2

Give this a read.

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3

Hedging’s like dating your ex and your crush at the same time—done wrong, you lose both ways! :sweat_smile:

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4

Hey there! Kudos to you for trying hedging, it’s not considered to be the easiest thing. Start with crafting a solid plan before opening long and short trades at the same time. Think of hedging as a way to protect your losses and not as a way to win.

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5

I started journaling my trades and that has worked out for me since I get to analyze the previous trades and make out a pattern and act on the next trade accordingly

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6

Focus on precise risk assessment, align hedge sizes with exposure, and avoid overleveraging. Practice on a demo account to refine your hedging strategy before going live.

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7

Many people think so - but incorrectly (at least for retail forex traders).

It’s unfortunately one of the subjects about which there’s even more misinformation than on most subjects, in beginners’ trading forums.

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8

what is the particular reason that you do not close your account and you hedge?

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9

I always thought it is an attempt to minimize the risk, but not directly.

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10

Oooh. :open_mouth: Thanks for this samewise! :blush: I’ve started reading the first article and tbh, although I’m still kinda confused, it’s interesting. :blush:

11

In a way, this comparison makes sense and yet it somehow doesn’t! :sweat_smile:

12

Thank youuu! :blush: I just decided to give it a go, but I guess depending on the results I get on future attempts, I’ll have to decide if it’s something I’d want to spend more time on. :pray:

13

Have you also tried hedging? :blush:

14

In hindsight, practicing on a demo should’ve been the next step for me when I decided to give this a try. :sweat_smile: My recent hedging trade was a desperate attempt to save a losing trade (and ended up with more losses)! :sweat_smile: But thanks for this Elliot! :smiley:

15

Thank youuuu Theodore! :open_mouth: I just saw this post and it’s a compelling perspective. :thinking: I’m not super set into hedging and making it part of my strategy. But I feel like my stupid mistake is that I’ve been trying it on a live account vs a demo account instead. :sweat_smile:

16

For the most recent hedging attempt that I had, it’s because I saw that my trade was moving in the opposite direction. :open_mouth: So, I thought that opening an opposite trade would help me reduce the losses from that original trade. :open_mouth:

17

Based on my experience trying it out of curiosity, it has done everything but minimize risk. :sweat_smile:

18

Yes, I have tried it a bit, helps me with risk management in volatile markets. I mostly hedge with opposite positions on different timeframes or correlated pairs but I am still working on refining it.

19

I disagree with the principle of hedging for private retail traders. It reflects a concentration on reducing losing trades and minimising losses, when the object of trading is to make a profit - by increasing winning trades and maximising gains.

Hedging every trade necessarily doubles the workoad, doubles the trade costs, and doubles the number of decisions the trader needs to make. The more decisions, the more scope for error: the more complex the strategy, the less support from basic principles and the weaker the operational statistical set.

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21

Some real understatement, there, IMO: I believe all of it is very reliable! :sunglasses:

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