Risks hedging is the protection of the assets from fluctuations of currency courses with making deals with fixed price on Forex market. Such procedure allows the trader to get the guaranteed profits which will be higher than all the charges to open positions. Using this strategy requires the player to invest a lot of money, more than a regular trading because it supposes opening several deals that compensate each other if needed.
Risks hedging as any other trading transaction on currency market requires the trader to analyze thoroughly the market. After the trend direction is determined the player opens the main deal from which he will get profits. In case the direction of price movement has changed a trader has to open two others based on the movement of the trend without closing first positions. One deal will bring profits to the trader and the second one will compensate the losses. One should close hedging deals only after the player is 100 % sure in the correctness of determining the trend and he can cover all the charges with profits gained.
Forex hedging: expenses
- Hedging as any other operation on currency market requires additional expenses: Currency hedging as well as any other deal on Forex supposes spread fee, which means the difference in the price at the moment of purchase and sale.
- Forex hedging brings charges for transferring the positions to the next day. Thus the longer the period for which the deal is open, the higher the per cent from the amount will be attributed to the rollover. But there is one advantage in it swap (the payment) will depend on which deal is open not only with its size, but with the receiver, because it can be directed to the broker as well as the trader.
- To make a deal on Forex a trader needs to put a security deposit on his account which consists 1-5 per cent from the whole amount of opening positions. After the position is closed the player can withdraw the money the sum of which will be made taking into account the profits gained or losses.
Thus charges for hedging that a trader should expect are little, meanwhile he can get guaranteed profits from the deals at the expense of lowered risks. As a whole the forex strategies hedging are good for players, especially for beginners and those who prefer safe tactics to aggressive trading.Social button for Joomla