Hi
I will try to explain on how you can use hedging instead of traditional stop loss. Try this out in demo account before in your live. This can be very rewarding if used correctly.
For this hedging strategy to be successful you need a clear and successfull trading plan (atleat over 75% winning) where you will have you entry / stop loss and exits already defined.
See the following image to have an idea, I will explain below:
I will try to explain on how you can use hedging instead of traditional stop loss. Try this out in demo account before in your live. This can be very rewarding if used correctly.
For this hedging strategy to be successful you need a clear and successfull trading plan (atleat over 75% winning) where you will have you entry / stop loss and exits already defined.
See the following image to have an idea, I will explain below:
1. At 1 the entry 1 get execute, price goes down and touches our Stop loss area , say at that place instead of stop loss you hedge your position ( take opposite trade of same lot size). If at 1 you bought 1 lot then at the SL place you would sell 1 lot. (Your loss is locked and margin is free now)
2. At 2 , your second entry is triggered, now you close your sell 1 lot and the entry 2, so now you have 2 lots of buy, when price moves up to a small distance you can close you buy 1 at some loss ( actually at BE as you have closed you sell with some profit.)
3. You can let the entry 2 running till your profit traget, it this is fails you can hedge. Try this hedging method it will reduce you losses to a great extent and increase you profits,
I dont want to go into the calculations part, if you find something interesting with hedging strategy then give it a try in demo first. This is one of the major thing which helped in my trading journey 500% in 10 months.
Let me know if this was helpful, If you have any doubt shoot in comment section.
2. At 2 , your second entry is triggered, now you close your sell 1 lot and the entry 2, so now you have 2 lots of buy, when price moves up to a small distance you can close you buy 1 at some loss ( actually at BE as you have closed you sell with some profit.)
3. You can let the entry 2 running till your profit traget, it this is fails you can hedge. Try this hedging method it will reduce you losses to a great extent and increase you profits,
I dont want to go into the calculations part, if you find something interesting with hedging strategy then give it a try in demo first. This is one of the major thing which helped in my trading journey 500% in 10 months.
Let me know if this was helpful, If you have any doubt shoot in comment section.
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