Hedge – Secret of Success


Price has a peculiar way of moving. It will move either sideways or trend in one direction. When the price is trending it will give a sharp move and then retrace back and then start the original trend again. The retracement can be as sharp as 78% of the first trending move. Question is how to survive and be in our trade, how to keep our emotion in control when we are expecting higher targets but steep period of retracement’ keep testing us?

There is only one solution and i.e. HEDGING

You must have experienced that when you determine a breakout and take a trade in it, it comes to your Stop Loss level, sometimes even triggers it and then resumes the trend very sharply. One gets a feeling that someone behind me is standing and peeping into my orders and eating my stop loss every time. As we all know, It is not so. The reason is that market and price tests our knowledge and conviction to the core and only the one who keeps full confidence on his setup and trade sails through. This is the reason why more percentage of people lose and very few gain, and they gain phenomenally well.

Hedging gives you the power to overcome all these difficult situations

Hedging gives you many options to ride a trade when price is trending in your direction without any fear of losing in case price turns suddenly. Hedging also takes care of the minor pull backs and sideways price action so that you do not exit a profitable trade in between. Most Importantly hedging also helps to you to exit a wrong trade without giving major losses.

We discuss in our webinars with our members about:

  1. various types of hedging,
  2. strike selection in designing the hedge,
  3. which expiry to trade in which condition,
  4. which hedge is suitable in different market conditions,
  5. various types of adjustments and
  6. most importantly when to use which adjustment

Margin Issues:

Most of the traders are worried about the margin required in hedging and have. amis conception that hedging reduces your return potential. It is not true. Hedging in fact increases your ROI and also provides an additional cover if price goes against you. Margin Issue arises when a trader is not aware about the proper knowledge of hedge designing. There is a science involved in hedging with basic mathematical calculations that we share in our webinars with our members.

Hedging is the only way to convert this trading journey into a serious business.


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