Hedging and Averaging Techniques

Hedging protects a client’s funds from unfavourable currency rate fluctuations.

Hedging can also be considered as a type of investment that allows traders to minimize price movement’s risks in the market. The hedging cost should be valued with regard to the possible losses in the event of not hedging.

Not all retail forex brokers allow hedging within their platforms. Be sure to research fully the broker you use before beginning to trade.

Averaging is a technique used by many traders to minimize risks associated with opening another position with the same direction at a different price level. The goal of this technique is to minimize risks by averaging more than one position which are opened at different price levels.