Hedging is an investment strategy that has a purpose of protecting ourselves against a loss in another investment. A trade is made with the intent of making money. However, if it doesn’t work out, I am protecting myself by making another trade that can profit from my first trade not working out. It is like buying insurance on a car. If I experience a loss on my car, I have made an investment in the insurance to help offset the loss. The hedge offsets the loss but it also offsets […]

Stop losses are a topic that divides a lot of traders. Ultimately, just like trading, there’s a lot of ways to accomplish what we want through stop losses. There is not a right or wrong way to use stop losses. Each trader is going to have to determine themselves why they are making the trade and why they would want to exit the trade if it goes against them. No doubt, there will be some trial and error involved. For new traders, typically the problem is setting stops that are […]