dealing with hedging positions

[Guest life01]

Does anybody have a clue of how to come out of hedging positions without sustaining a loss?

 

[Caseynotes]

Hi @life01,  depends on what you mean by hedging. Some take it to mean simply taking an equal and opposite trade in the same market but that will never work because PnL just cancel while you are left with the cost of both trades.

Hedging actually means taking a position in an opposite market so if your first trade goes against you can make good your loss on the second market. 

[Caseynotes]

True enough @TrendFollower, with regards the two types of coffee one will gain at the others expense, as Arabica is the more sought after and more expensive tends to gain in economic upturns at the expense of Robusta and vicaversa.

The other way of looking at it is to go long both, say, condoms and pregnancy testers, one will gain at the others expense, so once direction is clear ditch the los er.