9-6-2016 11-55-54 AM

Just like we had discussed in today’s webinar, this is an example of an “income trade” that “hedges the wealth position”.

Typically, a hedge is a trade in the opposite direction as a previous trade.  This way, the second trade that profits offsets the loss on the original trade.  This is due to being “long term long” but for today, “short term short”.  This is extremely easy to do as a forex trader.  The key is to be long JPY pairs (short JPY) so that you collect interest everyday.  For the second, or hedging trade, you MUST close the trade before the end of the day, otherwise you will be CHARGED interest.  You don’t want that, since the original long term trade was taken to EARN the carry, or interest payment on your leveraged money.



9-6-2016 7-36-38 PM

4 thoughts on “Hedging JPY… just like we said in our Forex Webinar”

  1. Paul Mason says:

    Got that, but sadly missed most of your webinar today as I was too busy winning 30p on a AUDCAD trade. Oh, that’s not 30 pips, that 30 of our Queen’s Great British pence…

  2. Thabo Mapohosha says:

    I read your book and I was wondering how this works. This makes perfect sense. Thank you for the illustration.

  3. Milsep Man says:

    This most defiantly answered my question from todays webinar. Thank you very much!

  4. George Deprez says:

    I think I understand, but it looks like the you held the position through the close.
    Am I wrong?
    If so, then how much were you charged on 0.25 lots?
    If not, then when is the close? I normally presume NY Close.

    Either way, nice catch on that trade.

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