Hedging Your Bets Is Better Than Trying To Hedge His Bet
Many traders think that hedging is like a team of women who are taking each others’ bets. Well, actually it’s not that at all. In fact it’s better than that.
Hedging is really about having a little bit of protection to get out of a bad trade. If you hedged, you would be betting on a losing trade. So if you hedged your bets, you were betting on a good trade.
For instance, if you hedged your bets, what you would do is you would bet the point at a certain price. Then the idea is if you lose that point, then you don’t go bankrupt, you just stop. That way you don’t go broke if you lose the point.
What is more important is that you bet the point at a price that is exactly equal to the previous point. For instance, if you hedged his bets, what you would do is you would hedge your bets. Well, in that case you would basically be betting against another trader’s points. The idea is you are not betting against him, but you are betting the price to go up.
In the stock market, you may want to hedge your own points if you are a bad trader and has been losing money consistently. You can also do this if you think you have a winning streak and want to make sure you don’t hit the floor and lose all your profits.
You could also do this if you think that you are going to be profitable in a trading technique. The idea is that you know the trade is going to go up, so you would do a long trade on a short term stock.
Once again, this means you would hedge the point and betthe point at a price that is exactly equal to the previous point. If you lose that point, then you stop. This way you don’t lose all your profits.
You may want to do this because it is a big risk. If you decide to hedge your bets you might be leaving money on the table. Therefore you should use this method if you have a risk tolerance.