FxGhani replies to: Stop Loss or Hedge It?


You got a position opened and the market is about to hit your SL (Stop Loss) value. What do you do? Quickly remove the SL value or Hedge it or you just let it go and then smile ?

If you don’t know what to do, you should walk away from trading. Losing trades should be accounted for in your system, money management, and trade management. If it’s not, you’ve got bigger issues than your stop getting hit.

Same for hedging. Professional traders don’t use hedging for loss avoidance. It’s for risk reduction to lower the loss amount and a good trade will lose the hedge and the winner will easily absorb it. Options are by far the better hedge vehicle than using a broker that lets you open a position in both directions.

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