The Hedge Strategy

Which everyone who is in this market has heard at least 1 time.

Generally, the market we are in is a place where there are too many dynamics and there is too much risk. It helps us to minimize this risk and keep our psychology strong. It acts as insurance to protect against these risks and to enable us to make more profit.

We can also use it in most areas of life. In general, it is the tendency to open a reverse position, which is used to prevent losses that may occur.

💰️I'll start with futures, which is the most used area. Let's say you have taken a long position from the support areas. You have two different options.

Firstly, the transaction was successful and the price went to resistance. Since your cost is in a good place, instead of closing it directly, you can reduce the exposure by a little and get a short exposure in the same way as the remaining amount. In this way, if the price drops, you can earn from the short, close it in the right place, add long again and earn much more money.

Secondly, let's imagine that the support is broken.

You have two options here. First one is to stop and continue, the second is to take a hedge short in the retest. Here, too, if your operation is successful, you can close the short from the next support and add it to the long operation. This allows you to reduce your error to a minimum loss and make a profit if your move is correct.

Let’s give another example:

➡️You can also use hedge in spot market. Let's say there is a certain amount of $BTC or a different #Coin that you hold in your spot for a long term. You think it's going to fall from somewhere, but you're not so sure. Then you can open a short position to your spot as a hedge without selling your spot product.

If you are successful here, you will close the short pose from somewhere in the lower regions and both reduce the cost of the product in your hand and increase the amount in your hand. Thanks to this, if the market one day goes to the points we are targeting, you will make a lot more money.

#hedge #trading