Hedging is generally defined as the purchase of two or more trading positions at the same time, where the objective is to offset losses in the first position through gains made in the other trading center.
Hedging or what is known as the usual maturity is to open the Jake Hammel Delta APP trading center on a certain currency and to be A, and then open a trading center opposite on the same currency A. This type of hedge protects the rolling of margin call or Margin Cool, because the second contract will win in the event of losing the first contract and vice versa.
However, traders have developed a number of hedging techniques in order to try to capitalize on the same hedge concept in profit making rather than offsetting losses.
On this page we will discuss some of the hedging techniques.
1. 100% hedging.
It is the safest and most profitable of all hedging techniques and at the same time carries the minimum risk. This technique uses the idea of balancing interest rates (price variance among intermediaries). In this type of hedge you will deal with two brokers. One of them pays interest to you at the end of the trading day while the other does not give or take interest on customer accounts. However, in such cases the trader will have to maximize his profits, or in other words he will try to make the most of this kind of hedging.
The basic idea behind this type of hedge is to open a trading center on a currency and let X be at an intermediary who pays a high interest rate every night on the existing contract. On the other hand, you open an opposite trading position on the same currency X at another broker that does not take Any interest on existing contracts, in this way you win from the interest rate or extension that is added to your account.
However, there are a number of other factors to keep in mind.
a. Currency used. The best combination of currencies to use with this strategy is the GBP / JPY pair, because at the moment the interest added to your account will be around US $ 24 per standard Lot you carry, however you should check with the broker you will deal with Each of them adds different amounts but generally ranges from $ 10 to $ 26.
B. Trading broker that does not charge interest. This may be the most difficult part of the topic. Before you open a Aria APP Software trading account with this broker, you should be sure of the following: 1. Is the broker allowed to open trading center for an indefinite period? 2- Does the broker receive commissions?
Some brokers get five dollars a fixed commission each night for each trading center that remains open, which is good though they do not. This is because when a broker takes money to keep your position, this means that this broker will allow you to keep your trading position open for an extended period.
C. Share your account. Hedging requires a large volume of money. For example, if you want to use GBP / JPY, you will need about USD 20,000 per account. This seems to be absolutely necessary because the monthly range of the Pound Yen’s recent moves has been around 2,000 points. So you do not want to listen to the margin call in one of your accounts. Also, do not forget that when you open a trading contract with two brokers, you will pay a spread for these contracts, which is around 16 pips for both. If you are using a single Lotte Normal this will mean you will pay up to $ 145. So once you enter the trade you will lose $ 145. So you’ll need at least six days to cover the cost of the spreads alone. So if you keep the Margin Cool again you will have to close both trading centers and then transfer the funds back to your account and then reopen the trading positions. Every time you do this you will lose $ 145 again!
It is important to use this strategy, but not to call margin. This can be achieved either by using a large balance of funds in your account, or by finding an efficient and quick way to transfer money between intermediaries.
Dr.. Capital Management. One of the best ways to manage such accounts is to withdraw monthly profits and balance the open trading centers. This can be achieved by withdrawing the surplus from one account or in other words, taking the profits from the winning account and then depositing this surplus in the losing account to balance it. However, this may be very costly. You should also know whether your broker allows withdrawals at the same time as the contract is open or not. One of the most effective ways to obtain this is to use the drag feature of brokerage services provided by third party companies.