Forex hedging journal

Discussion in 'Forex' started by pbw, Feb 21, 2008.

  1. pbw


    Please contribute your ideas and thoughts on hedging Forex -or any experience you have in this area.

    Right now I see Gbp/USD at good support moving up -- buy at 1.9623
    and sell Eur/USD at 1.4826.

    I am new at hedging. Cheers.
  2. Sell EUR/GBP @ 0.7550
  3. You're creating a synthetic long GBP/EUR position. This has nothing to do with hedging.
  4. There have been a few threads about hedging that are pretty entertaining to read. If you are a trader hedging seems pointless. If you a longer term investor or have a strong general sentiment about something playing out but you're not sure when hedging seems to have its merits. Don't use hedging as a way to escape taking loses. If you think the GBP/USD is going to 2 in 5 days just buy it if you think it is going to 2 sometime in the next 3-6 months then short something with a strong correlation. But then again strong correlations don't always last forever. For my long term plays I use one of those bucket shops that let you go both ways and depending on what mood im in I'll either have a long bias or a short bias, it seems ok as long as you don't mind paying premiums out the a** until your trade plays out.
  5. pbw


    I agree --don't use hedging to avoid taking losses.
  6. pbw


    Also please stay on topic -- if you are selling eur/gbp at 7550 -- what are you hedging it against -- cheers.
  7. pbw


    -open- GBP/USD = buy -1.9623
    -present -GBP/USD = 1.9676 = +53 pips

    open - EUR/USD = sell - 1.4826
    -present -EUR/USD = 1.4829 = -3 pips=

    profit = + 50 pips
  8. really are new to this.
  9. Like the previous poster said - you can as well trade eur/gbp - and NOT pay 2 spreads each time. Whatever you are doing, its not 'heding'.
  10. pbw


    What is your definition of hedging? Cheers.
    #10     Feb 22, 2008