Jan 03 2021 0
In the forex market, the question of whether we can really make profits has become more prevalent in today’s world. Some people fail to make money by trading forex, but many are still generating huge profits from this market. Therefore, it can be reckoned that we should understand how the market works. More specifically, it would be of great importance to manage risks effectively.
In fact, hedging is one of the ways that helps traders reduce the possibility of risks. However, in order to have a greater understanding of hedging, we will look at its specific aspects. When you know how to capitalize on hedging, it is possible that you can stay away from risk and trade more effectively.
And when you choose an effective strategy such as hedging, you should use it with the best forex brokers ever. My ideal choice is Exness, one of the best FCA regulated brokers. Let me explain why Exness hedging is the best.
The definition of hedging
In order to help us know how to make use of hedging in forex, we need to fully comprehend what hedging really is. Basically, hedging allows traders to purchase currency pairs and place a totally different selling price at the same time. It should be noted that you might not gain any profit if you remain open. However, provided that the market timing is proper, you can make more money without facing any risk.
It is obvious that you will be able to trade in opposition to your previous order when using a hedging method. This allows you to avoid risks if the market is volatile because of the protection of your second trade.
To make it clearer, I will give you the following example.
If the base currency of a trader is USD and he buys the currency pair of USD/GBP, his trade will be safe when he buys a contrasting pair. In this case, although movements of the market are not what he wants, he still avoids losses because of his second trade. Another scenario is that traders can close the second trade if the first trade will help them generate profits. As a result, with the support of hedging, you will not worry about risks because it allows you to manage your risks successfully.
Hedging with Exness
Unquestionably, you will be able to form a positive scenario when taking advantage of hedging. Simply, when you make a second trade opposite to your first trade, you will form a win-win. In other situations, some brokers put a prohibition on hedging strategy when you use the same account. Luckily, you still have other choices.
Applying two alternate pairs can be seen as another path of using hedging strategy. It can be well exemplified that your USD will be hedged by a GBP/USD and USD/CHF. Nonetheless, it can lead to risks because of the fluctuation of pairing valuation.
Should we use hedging with Exness?
As aforementioned information, hedging methods can be both risky and safe. Therefore, the only thing we should do is to have a good insight into its characteristics. On the one hand, using a hedging strategy might not help you generate big profits, but it can help you gain money later on, or it also prevents you from risks. On the other hand, you will be charged because you have to make 2 security investments at the same time. In addition, the flexibility of your trade will be limited.
Exness is an amazing forex broker that offers low spread, low commission, high leverage, and the fastest trading system as well as deposit/withdrawal system in the market. So it is the perfect broker for hedging.
But do you know that Exness is different country from country. So you should know the difference between them.
All in all, using a hedging strategy can prevent you from risks or generate profits later on. However, it also has some disadvantages as mentioned above. Therefore, before making a final decision, you should take Exness hedging into consideration.