Thread: whats with this quothedgingquot thing??

Has anybody noticed this new feature that Currency Market brokers have been offering called hedging?? Basically they allow you to take two positions that are different and they call it a hedge.

I have he ar d many trader s s ay they pick their broker predied on whether they offer this feature. I've he ar d seasoned traders sing the praises of this attribute. I have even he ar d individuals feature their system' s s uccess for this attribute! I can't find one itty bitty reason to utilize this attribute. Two identically contrary positions is exactly the same as having no place whatsoever!! Hedging, in the traditional sense, is minimizing risk while minimizing profit to some lesser extent, also this attribute doesnt match that definition.
Please, someone, tell me what im missing here!

Originally Posted by ;

Hi there,
I'm new, but I only want to share my view about this'self explanatory' system.
I believe hedging is actually works, but only if you already had a really good based of specialized analysis of supports resistances ( that are the change points of the price that will come back to that particular points again ). So it is like you want to mastering the swing trading system. Aside from this'hedging' system can help save you with your dual ( multiple ) margin requirements to your dual ( multiple ) orders.
That's my view. Please correct me in case...

Hedging costs you double margin, it doesn't save anything (you have two open positions using margin instead of being flat, which is essentially the exact same thing as hedged). It will cost you a bit of swap should you hold overnight. Theoretically the interest received while long one pair should cancel the interest paid while short the same pair, but it will not actually work like this in some brokers I know of-- you create less than you owe.