Portfolio protection is just as important as portfolio appreciation. Erect hedges around your portfolios! Hedging in forex is as vital as risk management.
Hedging In Forex: A Complete Guide 2022
Hedging in forex concerns itself with an investment that shields your finances from a risky situation. The purpose behind hedging is the minimize or offset the chance that your assets will be worthless.
What is hedging?
Hedging in forex is the practice of opening many positions simultaneously to protect your portfolio from volatility or uncertainty. Therefore, hedging in forex is concerned with offsetting losses on one position with gains from the other.
Generally, the objective of hedging is to take a position on two dissimilar instruments that have an opposing correlation with each other. In case one instrument depreciates in value, the other is likely to appreciate. This may aid the offsetting of any risk from the declining position with a profit.
