To hedge effectively, you need to understand the concept of correlations

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To hedge effectively, you need to understand the concept of correlations. Currency pairs can be positively correlated, negatively correlated, or have no correlations at all. For perfectly correlated pairs, you can initiate opposite trades simultaneously. In this case, if you believe that one currency will move up, you can buy it and simultaneously short a small amount of other currency. If the trade works out, you will profit from the first currency and make a small loss of the second currency.


Your profit will be the profit of the first pair minus the loss of the second senegal business email list pair. The same concept applies to pairs that are negatively correlated. Hedging can also be used in multi-asset trading. For example, historically, the price of gold has tended to move lower when the dollar strengthens. Therefore, if you are bullish on the dollar, you can also short a small volume of gold.


Remaining in the Forex market for the long term After learning about the Forex market, trading risk management is the most important concept. This is because even the best traders who do not practice proper risk management strategies will lose money. Therefore, when developing your trading strategy, you should always incorporate a section that covers Forex risk management. Every trader on OctaFX uses the benefits of negative balance protection.