DislikedTo all those who answered my post (#1888): I will give two examples to explain my position. I’m NOT talking about banks, COT or pyramiding into some kind of millipede. I’m simply talking about being long and short in the same pair simultaneously. I’m NOT saying that you can’t make money hedging. What I am saying is that you can make exactly the same amount of money (pips) by not hedging. Do you understand the difference between these two statements? Example #1 Trader ‘A’ has a buy position of 3 lots, and a sell position of 2 lots in EURUSD. His...Ignored
But I think why people keep insisting that hedging works is because it actually does work for them. I would venture that it offers psychological benefits which can translate into monetary benefits. Hedging tricks the brain into thinking that there was no loss taken, and at the same time it gets us out of the losing position. Perhaps the clarity of mind that comes after hedging (as opposed to feeling bad about a loss) more than makes up for the transaction costs the trader incurs...
Because otherwise I see no sense in so many people arguing for the benefits of hedging when there clearly is none as we can see from the mathematics...
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