DislikedHi Sys.iphus, thanks for taking your time to go through all these variety of topics. They are very helpful! Since we are in a fundamentals thread could you give us your current read of the status of each currency? For example: - How do you think the perspective of Brexit and the UK elections will affect pound? - Is Trump talking down the dollar? Do you think that there are any changes in the long term outlook of a strong dollar? - What do you think will happen with EUR if Marine Le Pen DOESN'T win, which seems to be the likely outcome? - When should...Ignored
Dislikedhello SY, for the more advanced traders, would you mind to write about your hedging? so down 1ATR from you first trade, you cost average as well as hedge at that point with the same position size? you keep doing that further down? thank you for sharing.Ignored
In regards to hedging, you hedge with other currency pairs as I outlined in the Pairs vs Cross Posts.
So if you are short GBPUSD and getting crushed and need to change direction or hedge.
You would do so by purchasing other pairs. When short GBPUSD are -1 GBP and +1 USD
So you need to get +1 GBP and -1USD through other pairs.
Buy GBP/JPY - You are +1 GBP and -1 JPY
Sell USD/JPY = You are -1 USD and +1 JPY
With these positions you are +1 GBP, 0 JPY, and -1USD.
Now you need to do some math regarding the volume of each trade as the volatility of each pair is different.
If you multiple the bids of GBPJPY and JPYUSD you will get the bid of GBPUSD.
You could also hedge it using
GBPCAD and USDCAD
etc.
Think in terms of your net position.
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