Forex Hedging

Forex hedging is a very simple strategy where you have to look for a currency pair the are closely correlated with one another. A good example for this forex hedging strategy are the currency pair EUR/USD and USD/CHF. The process is to go LONG on both of this currency pair at the same time. All you have to do is to wait for un-correlation to happen where one of the currency pair gains a higher profit that the losing pair. For example the EUR/USD reaches +126 profit while the USD/CHF only reaches -100 pip loss, you can close both orders earning you a profit of +26 pips. You can then re-enter again for you second trade. However, to make this system successful you need to have a good money management.

I placed an Long entry order on both EUR/USD and USD/CHF early this morning and I was able to profit with a small amount.

I place and entry awhile ago at;

Open Price
EUR/USD 1.41035
USD/CHF 1.08067

Close Price
EUR/USD 1.41234
USD/CHF 1.08054


Profit
EUR/USD + 19.9 pips
USD/CHD - 1.3 pips

I bought another set of price at;

EUR/USD 1.41232
USD/CHD 1.08033

I have disregard the previous order because I made an error in placing my entry order. I was supposed to place USD/CHF but instead I placed USD/JPY.

Anyway, here are the new active orders for today.

EUR/USD 1.4160
USD/CHF 1.0771

Does anyone know why NFA prohibited hedging? We'll have to go offshore.

Sorry don't know why, maybe they hate interest earners.

Anyway, here are the new active orders.
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