DislikedSuppose, lets say EURUSD moved from 1.2700 to 1.4800
Lets say someone had a hedge at 1.2700 with a Buy and SL at 1.2600
And a sell at 1.2700 with SL at 1.2800
The market moved up to 1.4800
The sell hedge met SL and closed.
The buy hedge continued, raking in all the profits.
This is meant by the term hedging.
It is a very calculated move also termed as straddling during news times.Ignored
This form of "hedging" is irrational in most cases (it is in fact not even hedging in the true sense of the word). Just because you CAN be profitable with it, doesn't mean it is the OPTIMAL method. It isn't. Honestly, steviet, if you are profitable with it then great, but take a look at alternatives and I guarantee you your profits will increase - the only thing you'll lose is the annual Christmas card from your dealer.
Please take a look at the link I posted above so I don't have to post the same thing twice.