Hi
I am looking for ways to hedge long position for NZDCHF.
Is there any put option for NZDCHF? What i see are USDCHF, is it used as the put option in another way?
Any other suggested hedging way for a long position for NZDCHF?
Thanks in advance!
Sell NZD/USD & USD/CHF… you pretty much hedge out all three currencies.
Hello Sir! May I know details about your trading signal, please? I mean details market analysis on NZD/USD & USD/CHF? I’m interested to know details about your analysis.
Once any position is open, at any moment there are decision points that can lead to several possible courses of action -
Hedge
Add
Reduce
Close
NZD/CHF is such a minor pair I can’t think of the advantages of trading it over a EUR, USD, JPY or GBP pair. If in doubt, Reduce, you can always Add later. Hedging for private retail traders is the worst option.
I agree with your last line, it’s the worst trading style for the retail Forex trader and complicated too.
I’m very new to this, why is hedging the worst option for retail traders?
I thought if I open a position as a swing trade and I buy a vanilla option to hedge it, it would reduce the possibility of huge loss?
To reduce means I close partial position?
A hedge trade on top of your original trade doubles your over-head costs.
It also means that your profit is capped to the running difference between the two trades. If one is a long and rises to +£100, the hedge will be a short and will fall to -£100, making your net gain zero. what’s the point of that?
Of course, you can always cut the short hedge at say -£50, but that means your long will only make +£50 at best. Technically though its now unhedged so you might put in a trailing stop at either b/e or -£50. Now if the long comes back to b/e/. your net gain on the two trades is -£50: if it comes back to -£50 and closes on your stop, your net gain is now -£100.
A stop-loss, which could be a trail stop-loss will prevent a huge loss in 99.9% of cases. A hedge will prevent a huge win in 100% of cases.
1 Like