How to make a profit on Forex buying and selling at the same time

In terms of providing services on the portals of many brokers Forex market can often find mention of hedging (hedging). Strictly speaking, hedging – is the process of reduction of investment risks due to the use of another asset class. However, in the Forex market for hedging realize the simultaneous holding of two opposing positions on the same currency pair. Along with how many traders are unnecessarily prove the correctness of the application of hedging strategies or grid facts obtained empirically demonstrate the opposite. In fact, the use of hedging strategies or mesh only complicate the bidding process. The reasons for these difficulties are given hereinafter:

Trades turn into a tedious task

Balance merchant orders with simultaneous purchase and sale of the same currency pair will be zero. However, at the close of one of the positions, the trader is faced with the risk of incurring losses on the other, an open position. Therefore, the simultaneous buying and selling can be profitable only if the trader can accurately predict the market turn. If a trader has a similar talent, then, of course, it will not be necessary to enter into mutually exclusive deal for one pair. Moreover, such a trader will have to wait a few weeks, or even months, in order to close the purchase and sale of a position at a profit in both cases. Just imagine the situation in which it may be the person who discovered the order of buying and selling the pair EUR / USD, say, 8 months ago, when it was the quote at around 1.17. At this point, at least his buy order will remain unexecuted.

The same is true for grid trading strategy when the order volume is doubled after a specified period. In a market with a lateral trend, over time the merchant will collect only meaningless position, on which, as a result, he loses all control. Quite often, you can see how traders who use the strategy of the grid, lost a very big business, and these losses negate all the profit that was earned over a number of successful transactions.

Significant changes have been overlooked

Trade – is the accumulation of capital at the expense of substantial price changes. At the same time placing two contradictory orders, a trader restricts itself to the supervision of these prices, which are part of a larger phenomenon. hedging and netting Strategy deprive you of flexibility, and does not allow a rapid response to sudden changes in the market situation.

Higher Commission

In the case of simultaneous opening orders to buy and sell spread is always present. The infusion of additional funds in the order will only lead to an increase in capital of the organizer of trading in the market. If we consider the bill in the off-exchange trading system (the ECN) , the merchant will pay a higher amount of commission in the form of netting at the opposite transaction (lots). As a result, after the closing of all positions, only a tiny profit remains merchant.

Losses from daily (overnight) swaps

Any position that is transferred to the next day (overnight position) requires the payment of receivables or payables Commission for any non-Islamic trading account. Consequently, the accumulation of positions by hedge strategies or grid, will only lead to the payment of a large percentage of the difference in the swap.

Problems with the conclusion

If the score is listed for trading any hedge position, most brokers will establish for such traders are certain restrictions on the withdrawal of cash and the trader would be an incredibly stressful situation.

Trade should bring not only profit, but also the pleasure, and the use of hedging strategies and the grid, in the end, very mentally draining. Loss of enthusiasm inevitably entails the immediate financial loss. Therefore, it is reasonable to use simple trading strategies, to be disciplined and not try to beat the market every fight.


James Ann. Hyerczyk has worked as a fundamental and technical financial market analyst since 2001. His technical work features the pattern, price and time analysis techniques of W.D. Gann.

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