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Hedging 101 (Trading without a StopLoss)

Hedging 101 (Trading without a StopLoss)

September 20, 2017 01:51   Sam S   Traders Library you should know  

Trading carries a huge risk for losses!
In fact, there is nobody in the world that trades who does not experience losses!
Our mission as traders is to limit the losses we incur so that we can protect our Equity.

As widely taught by educators, financial analysts, and other traders, the easiest way to protect ourselves from losses is to use a Stop-Loss order.

A stop-loss order will close your trade at a specific price set by you to limit the loss in case the trade becomes invalid.

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Hedging 101 (protecting profits or pause a trade)

Hedging 101 (protecting profits or pause a trade)

September 19, 2017 17:51   Sam S   Traders Library you should know  

Hedging occurs when a transaction is entered to reduce exposure to a prior trade turning against you and eliminating profits or increasing losses. Hedging is done to decrease the risks and hold a position until the markets begin to move in the original trade’s favored direction.

Just like finding entries, it is even more important finding exits.

It is especially important in the case a Day-trade turns into a swing trade.

Swing trades usually carry much smaller size because the stop-levels are much wider.
Using the same size on a much wider stop would massively increase the risk of the trade.

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