Hedging 101 (protecting profits or pause a trade)

Hedging 101 (protecting profits or pause a trade)

640   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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