Demo Account Guide
Demo Account Guide

Brokers For Hedging Strategy


Hedging is when you open two trades in the same pair, which is equally sized but in opposite directions. Hedging, at least in theory, negates the need to set a hard stop loss on either long or short trades being hedged. The advantage of hedging is when the markets (especially Forex markets) tend to range most of the time, it can be possible to profit just from high volatility within a range by closing the long trade at a peak and the short trade at a trough.

Many brokers do not allow hedging, but some do. Brokers that allow hedging give traders the flexibility to buy and sell at once. By here, you will find some forex brokers that allow hedging for their clients.

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Additional FAQ

For example, you are a gold investor and already own plenty of it. However, you are worried that the gold price might deplete due to a surge in the USD. Perhaps you don't want to close your positions in gold since you believe it might rise again in the future. To cover the temporary loss, you can open a short position on the gold CFD.

Continue Reading at Top 5 CFD Trading Strategies You Should Try

Trading indices has plenty of benefits for traders. Such as:

  1. Hedging
  2. Diversification
  3. Low cost
  4. Less liquidity risk
  5. Convenience

Continue Reading at Why Trading Indices Can Be Beneficial for You

Since hedging can be aimed as an alternative to stop loss, consider to place the pending order using the same method you use to determine stop loss.

Still, the psychological dilemma presented by using hedging as a stop loss is still there. It is suggested not to place Target Profit (TP) during hedging. Of course, there is another consequence: we have to stand by and patiently monitor the chart; when we feel the trend started to turn back, close the position that is in profit. If later it appears that the trend goes forward again, then open another hedging position, and so on. It means we will lose some spread, but it will feel better because we are able to take advantage of the price movement.

Continue Reading at Using Hedging As Stop Loss Alternative

It probably depends on your skill and expertise. If you can manage it well, hedging offers a great risk management system as it's able to minimize your potential loss and even make it break even during unexpected market turnovers. However, keep in mind that hedging is certainly not free of risk. It could cost you a double loss if you're not careful about entering and exiting the market at the right time.

Continue Reading at Why Hedging is Not Allowed in Some Countries?