One more note on hedging:
Its imposible to hedge a trade, using the initial position or entity as the hedge. Its just not there, one cancels out the other. If you have a long term forex trade and wish to make short term trades, you can, but it all works off of the same position, if you wish to hedge your long trade with short trades you can, but it is all part of the same positon, using the same underlying equity. And it is not a hedge, it is a trade.
A hedge requires using a different vehicle to hedge an existing trade, such as using gold to hedge the dollar, or using put options to hedge a large or long term stock position. Its imposible to truely hedge a position using the same equity, this is a misnomer, created by robot developers using MT4. All you are really doing is adding to or reducing your position, and creating trade revenue for the brokers. |