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use hedging for substitute stop loss


stezz

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for my friends trader who considers conventional stop loss is too stiff, I would suggest to try other alternatives to limit the losses, using hedging.

 

hedging here means we opened positions simultaneously buy and sell without having to close or one of the positions.

 

use hedging as a stop loss can be done in two ways:

 

The first way: with instant execution

 

our intention to open a new position opposite the position we are floating minus in the same currency and with no advance close to the minus position earlier. This method is used to lock the position that was floating minus.

 

The second way: with a pending order

 

that is, we put pending orders at specified prices as the protector of a position we take, so if the price moves outside of our predictions when we do not currently monitor the chart, the pending order will be automatically activated to protect the loss on the position we have taken earlier.

 

how to stop hedging as a substitute for this loss is not recommended for novice traders, however, can be an alternative for traders who do not want a rigid stop loss :) Whichever alternative we choose, should be adapted to "the circumstances" we. that is, we must feel comfortable with whatever decisions we make when trading;)

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