Do you hedge a trade?
By hedge I mean if a trade is losing, you open a trade in the opposite direction on the same pair, for example you would have both a long and a short trade open on the GBP/USD, of the same lot size.
Just to keep it simple, let's not get into correlating pairs, using one pair to hedge another, etc. If you do this, answer no.
I do believe a good trader might have strategies wherein a hedge is used.
From my inexperienced viewpoint, a person opens a hedge when he has a trade he doesn't really know what to do with, or can't bring himself to just close it and take the loss.
So they open a hedge, now they have 2 trades they don't know what to do with. That would be the case with me.
When I play out the possible scenarios in my mind, I just see a lot more opportunities to be whipsawed.
By hedge I mean if a trade is losing, you open a trade in the opposite direction on the same pair, for example you would have both a long and a short trade open on the GBP/USD, of the same lot size.
Just to keep it simple, let's not get into correlating pairs, using one pair to hedge another, etc. If you do this, answer no.
I do believe a good trader might have strategies wherein a hedge is used.
From my inexperienced viewpoint, a person opens a hedge when he has a trade he doesn't really know what to do with, or can't bring himself to just close it and take the loss.
So they open a hedge, now they have 2 trades they don't know what to do with. That would be the case with me.
When I play out the possible scenarios in my mind, I just see a lot more opportunities to be whipsawed.