Hedging

• Hedging/ Locking

• Concluding urgent transactions on currency exchange to avoid price fluctuations. The point of hedging is in selling (buying) currency contracts for the term with the simultaneous selling (buying) of currency at disposal, with the same term of supply, and carrying out the reverse operation when the term of the actual currency supply will come.

Examples :

• your order Buy EUR/USD at 1.3000 and then the position you are suffering from loss -50pips ( price EUR/USD it was moving the drop to 1.2950 ).

• then the position is your key at 1.2950(hedging) with a new way in order sell at 1.2950 on EUR/USD again in the number of lot size are as large as the initial position.

• so in this way then your loss will still floating around on -50 points, until then one or both of these hedge positions before you close and your floating will open and change its value.

• so with the example of these hedging price falls despite continued towards 1.2300 or even at any price then you are floating loss position remain around -50 points.

• Hedging strategies can also be used for your trading technique variations