HEDGING TRADES
Don’t hedge your trades
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Hedging a trade is where you have a buy and a sell order on the same currency pair at the same time. You might be thinking, “why on earth would I ever do that?” But many people do it.
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People will enter a trade and then it goes against them, usually the trader doesn’t have a stop loss. So instead of either closing the trade or their stop loss being hit, they add a position in the opposite direction and have both trades open.
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Why do people do this? Because they panic, they don’t want to lose their money and they don’t have the correct mindset to be trading.
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If you’re unsure about a setup from the start…DON’T TRADE.
This is an example of what hedging would look like on a chart
As you can see from the example the blue dotted lines are the buy positions and the red dotted lines are the sell positions. If you don’t know what’s happening in the market and don’t see an opportunity, don’t trade. Hedging is a bad habit, don’t do it.