Cryptocurrency Hedging Strategy!
The risk-averse trading tool you don’t know about! My mentor has 8 years of trading experience. Why is he always right about the direction when he gets in? It’s not just because he’s lucky; it’s because he uses hedging strategies! (I recommend liking + saving this to avoid losing it later.) Without further ado, let’s get straight to the point:
What is hedging? Hedging means simultaneously conducting two trades that are related in the market, opposite in direction, equal in quantity, and offsetting in profit and loss.
In simple terms: Hedging is making two trades, one short and one long, with roughly equal quantities. This way, no matter how the market changes, the profits from one side can offset the losses from the other. Many people might say, isn’t that just doing double work and losing on fees? Not necessarily! For example, if the short position is correct, you don’t close it, and you keep profiting. If the long position goes against you, you close it in time to cut losses. Doesn’t that achieve the goal of managing the direction correctly? The main purpose of hedging is to control risk, not to earn more profits. It helps investors lock in profits or reduce uncertainty in turbulent or highly volatile markets. Hedging is a method to reduce risk, and if used well, it is definitely much stronger than just relying on gut feelings to enter the market!