Hedging terms for safe and guarantee. Hedging protects customers’ funds from unfavorable currency fluctuations. Funds on their account are fixed at the transaction price. So hedging helps to reduce the risk of risk associated with changes in exchange rates, which also helps achieve results without changing due to their fluctuations.
In fact, hedging uses one instrument in terms of reducing the level of risk associated with unfavorable influence on prices. The rest of the term hedging means insurance fluctuations in currency prices, assets etc. Hedging can also be described as a form of short-term investment, made to minimize risk, due to price movements in the market.
Hedging type on Forex
The first type of hedging is “hedging the buyer a funds” to reduce the level of risk, in connection with the possibility of rising instrument prices. Another type of hedging is “hedging the seller a funds” to reduce the level of risk due to price declines.
A trader who previously opened a buy transaction position on his trading account, then opened a new position by selling. When the price approaches one of the open positions, you can execute one or both of the positions.