– Hedging = safety net for trades – Open a second trade opposite your main trade – Minimizes losses if market moves against you Core part of risk management
What is Forex Hedging?
Why Use Forex Hedging?
– Manage market volatility – Reduce stress with a safety net – Keep long-term trades open during short-term swings
– Open an opposite trade on the same currency pair – Example: Buy EUR/USD → Hedge by selling EUR/USD
Direct Hedge (Simple Method)
– Use Fibonacci extension for targets – Common levels: 127.2%, 161.8%, 200% – Combine with candles & moving averages
Correlation Hedging