hedge

Have you ever noticed a potential profitable trade and just jumped on it? For example, you eagerly enter a $SOL trade, smiling, and rubbing your palms waiting for profits to start rolling in.
Then, Boom!🥺 It gets bursted and you start seeing red everywhere.😭
A potential profitable trade just started playing against you and burning your capital like hell.😱
Then you get stopped out. Yes, your stop loss get hit 🎯 and you are out of the trade. 😔
But just when you thought that the worse is over, $SOL makes a u-turn and starts pumping up 😂
You see that your initial call was right. You saw the trade clean and clear, but somehow somewhere the trade didn't play out just the way you wanted it to.
Maybe your entry was wrong or maybe you just didn't have the right hedge to keep your trade safe and sound.
And that's why I want to show you a few ways to hedge your trade against losses. This might just be the difference between consistently hitting your trade targets and getting stopped out every single time.
Let's get right to it.
1. THE STOP-LOSS BUFFER
There are many times I've got stopped via my stop loss but then the trade makes a u-turn and starts going in the direction I predicted.
Most of the time, this is because my stop loss is too tight. Too close. Too near.
I've learned to always give my stop loss some room to breathe. I don't just place it below the support area. Instead I place my stop loss at a position that is realistically impossible for price to get to if my trade analysis is right.
Read that again, slowly and carefully.
2. THE REASONABLE LEVERAGE
Haha. I remember back when I used to trade with a 50X leverage 😂 Just a little price draw down and my account is liquidated.
That is because my leverage is often unreasonable.
Nowadays, I set a reasonable margin such as 3X or 5X. The highest I've attempted recently is 10X and that's even unusual.
But I've discovered that the more reasonable my leverage, the more winning trades I get.
3. THE HABIT OF DRAWING CHARTS
My number one rule is, always draw your charts no matter what.
Draw the trendline, draw the channel, mark out the resistance and support zones, draw for different time-frames.
If you do this enough, you'll avoid confusion and take more confident trades.
4. WAIT FOR TRADE CONFIRMATION
I always believe in confirming my trades before executing them.
No more panic trades, no more FOMO, no more second guessing.
I simply confirm my trade bias before committing to the trade.
This means that I might not catch some trades and I might be left behind in some rallies, but one thing I'm sure of is that I don't take a trade that has not been confirmed to my trade bias.
This has helped me hedge my bet and made me a more mature trader.
5. ALWAYS TAKE PROFIT
Greed is good, but greed can be dangerous.
I have one rule, always take your profit. Always, every time.
I do this by either by taking a partial profit on winning trades or moving my stop loss to a higher position.
This effectively means that even if the trade starts going against me, I already have some profit in the bag.
Even if I get stopped out, I still make a profit. That is is my hedge right there, and that is how winning traders trade.
Copy that and you'll start winning too!
#Hedge #StayProfitableStayProfitable