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I just delved deeper into hedging and realized that it is a quite useful technique when you're uncertain about market trends.
So, what is hedging basically? It’s when you open two positions simultaneously—long and short—to protect yourself from risk. For example, if you see the price has risen and is trending downward, you want to short but aren’t 100% sure, so you can open a short position first and then open a smaller long position. This way, you cover both sides at the same time.
If the price continues to rise, the long position will cut losses on the short side, reducing your overall damage. Conversely, if the price drops as expected, you close both positions, and the profit from the short offsets the loss from the long, leaving you with a net gain.
On the other hand, when the price is too low and you want to go long, do the opposite—open a main long position and a smaller short to hedge. The good thing is, while hedging, you can still perform regular DCA on one of the positions without any restrictions.
I also discovered that in some rare cases, both positions can be profitable at the same time, resulting in compound gains—that’s the best-case scenario. Technically, it’s extremely simple: just close all current positions, go into settings, and enable the hedging mode. Hedging isn’t as complicated as many think; understanding the logic allows you to apply it immediately.