Hellooo! 
Hmm. I haven’t really heard much about hedging here, but I’m thinking of just trying it out when I open a short and long position for EURUSD. 
I know it’s illegal in some parts of the world, but it seems like it’s okay to do it here in the Philippines. I’m guessing it’s legal in other countries too. Has anyone here tried it out? Would you advise against it?
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Check out Nick Shawn he used to hedge. I don’t hedge. Imo it needlessly ties up capital, the loss is still there just not realized. I prefer to just take the loss and then look for a new opportunity.
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Hi @ria_rose. How is Philippines? 
I had a bad experience, I was offered to eat Balut 
I was chicken out to look at it, but later on I ate Chicken Adobo. 
I’m doing hedging massively. What kind of hedging do you refers to? If you are asking me if I am doing it for locking … I don’t do that.
I’m hedging as part of support to my clients core business.
I’m also do hedging as part of my trading strategy such as grid system.
During arbitrage I’m also considered implementing hedging.
I love hedging as long as it makes money. About legality, hedging is not allowed when we open position in an exchange, the account type is netting. Most broker is providing hedging account, so there won’t be a problem. But there are some limitation.
Some brokers calculate Margin Call not from equity, but from the floating minus. You can put long and short together, the equity is still good, margin level also good, but you may got MC then stopped out by breaking the limit of your floating minus.
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Here an idea how hedging can help you in Forex.
In a generally range bound currency pair you can trade a grid style of system where you open buy and sell based on either time of day or price.
But I think hedging is mainly used when trading normally highly correlated instruments (stocks, indexes or commodities)
With this approach you have two ways to trade.
1st wait for the correlation to be broken and place opposite trades in direction of momentum driving the normal spread relationship apart.
Or 2nd, wait for the correlation to be restored and place opposite trades as the spread narrows back to the normal.,
Due to Forex having both USD pairs and cross currency pairs the correlation approach to hedging isn’t required as much with forex but one can still devise strategies that work well with hedging a single currency pair in forex.
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I tested a 3-way hedging system for a little while, it was not that successful so I did not expand upon it. Over here opening opposite trades on the same pair is illegal so you have to get creative.
EUR/USD - Long
GBP/USD - Short
EUR/GBP - Short
In the above example you are both short and long on all 3 currencies. The problem is that the spread eats up a lot of the profits and rest are drained by the pairs not moving exactly the same. Just like most of the trading systems, nice in theory but not so good in practice.
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Hi @igillman, what you did is called triangular arbitrage.
Doing triangular arbitrage you need to calculate the EUR/GBP ideal price by deviding EURUSD and GBPUSD. You can also do it by two accounts from different brokers.
Be careful to do it. You may get suspended by broker. Please read their trading rule and policy before hand.
Thanks for the reco, Clear! 
Like you mentioned, capital is one of my biggest concerns with this approach. Although I was thinking that if I ever spot a good trade, the capital I spent on the trade that got stopped out would be worth it. Then again, I’m not sure if that will even happen.
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HAHAHA OMG! When did you visit?! Wish I could’ve toured you around or had coffee! Tbh, I’m also not a big fan of balut since it just looks so weird. 
Now I’m curious, what did you think of the Chicken adobo? 
Next time you visit, I suggest sinigang!
Hmm. I’m not sure I understand. Are there different types of hedging? In my mind, what I want to try out is opening a short and a long position on 1 pair, to be able to catch a winning trade. +
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Thanks for this BAD! Super appreciate this! I’m not really sure if this is something I’ll apply to my strategy, mainly because of the capital issue. But, have you also tried hedging yourself?
Thank you igillman! The hedging I had in mind was just super straightforward and somehow a n easier approach. I didn’t know that doing it this way is also considered hedging!
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Hi @ria_rose, I visited Philippines few times. April was the last time. I went to Angeles and Tarlac City to meet old friends. 
I like Chicken Adobo, it’s great to have with rice Even after few times, I don’t really get use to local delicacies, Some of them has strong flavor, probably they got mixed by few different meats, chicken, pork, beef.
I had tried sinigang as well. Loganisa, tocino, panada, lumpiang, pancit … think of them, I’m drooling now 
Hedging is pretty common in many transnational business. I manage few clients for these purposes. Hedging in trading is not really good actually. It needs bigger balance. If your trading style is single entry, it won’t be attractive. Most hedging work best in averaging.
I saw many traders use hedging as locking mechanism. For example they long, when market moves against their “will”, they will open an opposite order, short, to maintain their equity. They expect market will then move up and they can recover the losing trade. It will usually trap our fund for years, when the price is never return.
So when you apply hedging in averaging, it will reduce our drawdown for a while, giving us more balance until we have profit from averaging. The challenge is when to start the hedging process.
If you want to have profit for both price’s movement (up/down), you can try grid system. It’s easier compare to hedging.
Hedging can be a useful strategy, especially for managing risk when you’re opening both short and long positions on something like EUR/USD. It’s legal in the Philippines and many other places, but always check your local regulations and your broker’s policies. Some traders find it helpful for reducing losses, while others think it complicates things. If you decide to try it, just make sure you fully understand the risks involved!