From personal experience I DONT RECCOMMEND it. It will rarely do little more than create something of a stalemate and serve only to prolong a loss. When I had only been trading for about 12 months I lost everything from hedging gone wrong. I thought hedging was similar to just giving yourself some thinking space at times the market switched suddenly and instead of closing on trades early I opened opposing ones to balance my losses with my profits. The problem was when my short trades were for example 100pips up it also meant that my long trades were at least 100 pips down. How could I close my positive trades without leaving myself 100+ pips down.
After trading on the see-saw for about a couple of months I decided I needed balance out again so when the pair was such that I believed it was going to bounce back from where it was, I closed my good trades leaving me with the hypothetical 100 pips (from trading long to balance my short trades) that i was expecting to reverse. Which it did momentarily and I relaxed and took my eye off the ball during which time the pair reversed again thanks to the European and Greek bailout crisis and before I knew it my broker had closed all my trades and when I went back to check on them I had lost close to $70,000. If you're lucky, rich or 100% vigilant and attentive 24/5 then hedging could MAYBE work. Otherwise it's nothing more than a false sense of security.
After trading on the see-saw for about a couple of months I decided I needed balance out again so when the pair was such that I believed it was going to bounce back from where it was, I closed my good trades leaving me with the hypothetical 100 pips (from trading long to balance my short trades) that i was expecting to reverse. Which it did momentarily and I relaxed and took my eye off the ball during which time the pair reversed again thanks to the European and Greek bailout crisis and before I knew it my broker had closed all my trades and when I went back to check on them I had lost close to $70,000. If you're lucky, rich or 100% vigilant and attentive 24/5 then hedging could MAYBE work. Otherwise it's nothing more than a false sense of security.