Discussion of Forex Trading and Currency Trading

a forex question?

how does a person make money by hedging when they go long and short on the same currency pair, what is the rational behind this.

Also what's a good honest broker that provides leverage up to 400

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This entry was posted on Thursday, May 1st, 2008 at 7:06 am and is filed under forex trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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2 Responses to “a forex question?”

  1. floridaflammemarijuana Says:
    May 1st, 2008 at 7:06 am

    Hedging does not make you money. It simply "freezees" your position without having to get out and reduces your risk.

  2. Harold Hsu Says:
    May 1st, 2008 at 7:06 am

    Hi,

    Generally, most retail traders use hedging when they are in a losing trade position.

    For example, I might go long the EUR/USD, but the market price immediately tumbles down. In order to protect myself against further losses, I place a short order so that any further downard movement in price will not affect me — I may lose in the long position, but I partially make up for that loss by the gains in my short position.

    This is how most traders I know 'hedge' against losses. Unfortunately, this is a terrible way to trade.

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