Friday, July 13, 2007

Lesson 6 - hedge

hedging is simply the easiest way to trade.

it could also be the safest way to trade.

when I started trading, I worked on how not to loose not how to profit.

if the broker do not allow you to hedge, dump it. it is clear that the broker want you to lose money. some broker allow hedge at small volume, but disallow or block your hedge at higher volume, dump this broker too.

hedging is the only way to save your money from margin call provided you have enough capital and know what to do next.

stop loss only reduce loss.

hedging mean buy and sell the same pair. this will lock some margin depending on the hedging extent. this is not a way to make profit, but to safe your capital only.

indirect hedging means buy and sell 2 or more pairs at the same time to lock your margin. this require some knowledge and some capital flexibility.

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