Hedge or Hold? Deciding When to Protect Your Forex Position
The foreign exchange market moves fast. With currencies influenced by everything from central bank policies to geopolitical tensions, Forex traders constantly face one critical question: Should I hedge my position or hold on and ride it out? Protecting your capital in an environment as volatile and interconnected as Forex is essential, but so is potentially maximising returns. Making the right decision about when to hedge or hold can spell the difference between strategic control and reactive losses. This article explores how to navigate that decision with clarity and confidence.
Understanding the Concepts: Hedging vs. Holding
Hedging in Forex is a risk management technique that involves opening a second position to offset potential losses from your primary trade. This could be a positio...