Learn How to Hedge in Forex Market


Even the most novice forex trader can understand the importance of hedging. It’s easy to guess, check-up your risk, and look for a breakout move. This is done by selecting long and short currency pairs at the same time. Once you feel comfortable with your forex robot and have the knowledge to tweak the settings, this is the best strategy.

Although you can make your forex robot go long or short on the same pair simultaneously, it is not legal. Unfortunately, the answer is no, and here’s why.

What should you pack for England with your robot’s bag?

We know that US regulators have been snooping in nearly every area they don’t belong to and have had to ban hedging for retail investors who have US-registered accounts. The National Futures Administration seems to be convinced that retail traders do not affiliate in the forex market. However, they haven’t stopped hedging institutions for institutions. This puts your forex robot at serious risk if you are a trader from the US.

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What are your thoughts? Either you can continue to work with a US broker who isn’t registered by the NFA. However, this is not a problem as the NFA wants to ensure that all brokers that cater to US clients are registered. You can also migrate your brokerage account to an European or British broker. You can think of it as going to FXCM UK using the American FXCM version. This account switch will allow you to hedging back to the forex robot.

There are some disadvantages to going offshore

Robots are complex because of the complexity of the user. This is not just due to the fact that US brokers have banned hedging. Additional problems arise when you convince yourself that you can sit still and continue your account with them. If your account is excessively heavy (which is usually a problem with soft currency), and you take it off the board you could be subject to the state taxes and regulations set forth by the Commodities Futures Trading Commission. This means that regulators not only want to improve your forex robot’s ability make pips work for you but they also want to eliminate brokers options by making it more difficult to transfer your account abroad. This sounds like a frustrating deal for both forex traders and robots.

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Check out Other Options

Every trader needs as many tools as possible. Forex robots can be very skilled at hedging and it pays to maximize these benefits. So why not spend some time searching for non-US brokers? You will be a happy forex robot.