Forex Hedging - Criticisms Finally DEBUNKED.

Trading is risky, and most people lose money.

FTC/CFTC Risk Disclaimer - Please read this so you're 100% aware of the extreme risks associated with any type of trading and investing.

I’ve said for years and years and years - trading is extremely risky, and most people will lose all the money they try to trade with - even the people who follow the information I provide. Trading is a skillset that is difficult to learn, and I make it look easy because I’ve been trading for 7+ years. As with any high performing skillset in life, trading is NOT easy.

Your likelihood of consistently making money trading is abysmally low, whether you learn on your own or whether you follow the things that myself or others teach.

It’s like becoming a doctor, many people start pre-med and medical school, but only a tiny fraction of them succeed and actually become doctors. The average success rate of trading is even worse that that! Becoming a doctor is obviously not for everyone, and becoming a trader is obviously not for everyone, too.

I (and my company, MissionFX, LLC) make NO guarantees/promises/express direct or indirect representation that you’ll achieve any specific result trading, regardless of whether you’re following my free or paid content.

I’m just some random guy on the internet who is sharing what’s worked for me - I have no clue what will work for you because there are a million contributing factors that will determine whether or not you will make money trading.

Do NOT take into account any information that I share anywhere on the internet as the basis for your trading decisions. I’m not responsible for your success, nor am I responsible for your failures.

Read the full risk disclaimer on my website below, so that you’re 100% aware of the risks associated with trading - then you can make an informed decision as to whether or not you want to continue following any of the information I share (or continue to pursue trading in general).

[NickShawnFX]

POLL! What's Better - Hedging or Stop Losses? EXPLAIN WHY!

[thedaxman]

I've used hedging for 22 years and it has served me exceptionally well. My only variation is I like to look at a trend, wait for the breakout, then enter a first trade at the re-test of the broken level. So only buy when the trend is up, sell when it's down, hedging is the safety net. Great winning % but yes, when it goes wrong because every trend breaks in the end, hedging bails me out. Great video Nick

[brendanbutler]

I can see how hedging can help to soften the psychological impact of a loss because it makes you realize that trading success and failure isn't about individual trades but how you perform over a number of trades. In that sense it could help with the fear of failure and so make you more profitable even with the cost of extra spreads and swaps.

[Spitfireseven]

You are so much more pleasurable to listen too. It's all so liguid and plainly laid out. It defenitly is gonna be watch the video more than once. This is not boring, that's the thing. Thanks Nick, You are the man!!

[markhal]

Adding imbalances with your support and resistance zones marked out on your charts can give you another area to hedge from. Great video, thanks.

[luretrixster]

Thanx,
i'm surpised how few likes, compared to views. Should have been more!
I like your stuff :)

[Kaitrader]

I totally agree and have been doing this for years. Hedging is a more sophisticated way of managing a potential loss from a trade. But more importantly it is about the "winner" mindset. A stop-loss forces you to mentally accept a loss, after a loss, after another loss. Whereas a hedge allows you to be more creative and utilise your skills as a trader to manage your way out. A hedge may not necessarily mean you will always return to a profit, but it could mean a much 'smaller' loss than would otherwise have been the case with a straightforward stop loss. The industry doesn't talk about it in the retail world because this is what most professionals do. You think Warren Buffet buys $1 billion worth of Apple shares then discusses where to put his stop loss?

[focusandtrade]

I have realized this strategy because I don't like stop losses, could see it working but couldn't execute. Thanks for the breakdown💯🙏🏽

[tradezinger]

Hi Nick,
Thanks for all the good content.

From what I understand, if we are hedged and we close any of the positions at break even, we become unhedged.

Eg: Let's say that we are hedged for a 1k loss:

- We close the sell position at break even
- We leave the buy position open.
- We became unhedged/ unprotected.

If price keeps moving down it will add more and more loss to our trade.


This is the small mistake you made @ 23:50 min.


We should never lose sight of the danger of closing anything at break even!!!!.... unless the break even comes from a losing trade and an equal winning one.

do you agree?


Thanks.

[labaud]

Been Backtesting with daily pivot points on a 15min TF for the past 2 weeks. Backtested with the different ways of managing risk like Nick explained it. And damn it works like a charm. Time to forwardtest it for a month. We'll see how it goes. Thanks Nick for this different way of looking at the markets. I'll open a second account to use it once the forward testing will be completed. Keep up the good work 🙂

[EvanQuiel]

This, in my opinion, just serves to highlight the necessity for an edge among investors, as simply playing the market like everyone else is insufficient. What do you think? I've been a little hesitant about investing in the present market, but I also think it's the perfect moment to start.

[Vegigido]

Nick, I cant thank you enough for the nuggets you delivered here in this video. I finally can have the confidence to trade as a winner rather than a loser by hedging the way you do it. Great video! I will certainly recommend it to my frioends who are struggling in their trading.

[jameszhang]

At 6:20 mark, for simplicity let's assume 10 pips is the distance between the sell and the buy.

Hedging:

If price comes back, you close sell at breakeven, now you are at a -10 pip loss (due to open buy). You aim for the buy to move not only past breakeven, but also above it, so you're aiming for +20 pip profit.

If price moves down, you will be at -30 pip loss. (-10 pip from open pnl, and -20 pip from price moving down - since you're aiming for a +20 pip profit)

If price moves up, you will be at +10 pip gain

Stop loss:

You cancel the sell when it reaches the point you'd normally hedge. -10 pip loss locked in. Then price goes back down to where you placed the sell. If you buy here at 2x quantity, aiming for +10 pip of profit.

If price moves down, you will be at -30 pip loss. (10 pip loss from original sell, 20 pip loss from buy)

If price moves up, you will be at +10 pip gain (the 20 pip profit offsets the 10 pip loss from the original sell).

The outcomes are the same. Please correct me if wrong. Thank you for all the videos sir.

[Jessicatorres_]

I began my investment journey at the age of 38, primarily through hard work and dedication. Now at the age of 42, I am thrilled to share that my passive income exceeded $100k in a single month for the first time. This success reinforces the importance of the advice mentioned earlier. It is not about achieving quick wealth, but rather ensuring long-term financial prosperity

[ThisIsReezy]

Very helpful. Instead of setting stop-losses, I have also always somehow tried to make my losing trades still end profitably. Sometimes I was successful, but sometimes not. Your videos and explanations are exactly what I was looking for, although I was not looking at all. Thank you very much for your videos.

[avinashrana]

Nick i have followed many strategies and analysis, but All i can say love your hedging technique and mindset, its been a month i am following the technique and i am profitable, looking forward to go for your close friends group… Appreciate your efforts…

[TravelingHacker-um]

I just learned the word “hedging” recently in trading. I’ve been doing this kind of strategy for quite sometime even before I learned this word. I just knew that I have to cancel out some losses if my prediction is wrong.

It might not be for everyone’s taste. I hate stop losses because I lost lots of money from being stopped out, but then later my TP is hit once my SL gets hit.

Hedging is a way to stay longer in the game.

I had a scenario where I foolishly placed a long order at the top and sell order at support level. But still able to manage to profit and closed all bad entries using hedging.

[allthingsnu]

Thanks for this video, Nick. I've been learning to trade SPY options for the last 15 months. I unintentionally got myself into a call and a put at the same time during a possible reversal and ended up liking it because I felt protected until it was more clear which direction price was going. I didn't even know that what I did is called hedging. Once I found out that it was hedging, I came to YouTube to look for videos on hedging while day trading just to confirm I'm not crazy and found this video. I'm going to test it out next week in Paper Money.

[Izukamma]

My only thing with hedging is that it’s kind up to discretion where you place that pending order, and can never really account for your losing percentage per pip. This is a really bad idea for funded accounts seeing the fact that theses daily loss limits and with hedging you can’t account for your loss percentage ahead of time. My advice is don’t do this with a funded account. You most definitely will lose the account with a few consolidating trades

[keithgrant]

This is absolutely golden hahah! Thank you so much Nick!