Recently, on my FXCM live account I have been experimenting with hedging. After studying this a while, it occured to me that this may actually be a better approach than a traditional stop. Trading XAU/USD and usdollar CFDs, I have found it more profitable to use a longer time frame. Currently, I trade the 1 hour chart. Trouble with this is that there is a lot of "noise" in 1 hour that can knock you out of the trade if you use a traditional stop. There is a real opportunity cost to this; not only have you lost the equity, but you also lose potential profit waiting to get back in again. Also, if you don't use a stop at all, you can easilly take a huge loss or lose everything to a "black swan". What I have been doing recently with the usdollar, is to enter a counter position where my stop would otherwise be. So if I am short, I go long at my stop. At worst, you lose what would other have been your loss if you stopped out + fees. At best, you profit in both directions. Furthermore, with FXCM atleast, this frees up usable margin. Therefore, you can in theory take a much larger position on a trade with a lesser fear of losing everything. Have any of you tried this and what has been your experience with this approach?