What is hedging in Forex?

[John Baldock 0]

Hi, I would like to learn more about hedging in Forex.

[Tobias Jackson 0]

Hi, thank you for asking this question! 

Hedging is a way to avoid the risk of losing money due to fluctuating exchange rates. For instance, a company can reduce the risk by shorting the Euro and buying the USD. That way, if the dollar rose in value, the profits from the trade would offset the losses on the other side and vice versa.

[Alex Clark 0]

Thanks for information!

Edited August 18, 2021 by Alex Clark