Very often I read the new traders discourse about the hedging.
Following their logic, it is possible to hedge the risk of the rate of EURUSD sell, by GBPUSD buying, etc., there can be lots of examples.
In fact, that statement is irrelevant to hedging. Trader using this method, only shifts the risks from one currency to another. In reality, the risk is floating and changing are depending on the currencies correlation as well as on its course variance.
It's called spread-trading (spreads, in slang), also called the pair trading.
Following their logic, it is possible to hedge the risk of the rate of EURUSD sell, by GBPUSD buying, etc., there can be lots of examples.
In fact, that statement is irrelevant to hedging. Trader using this method, only shifts the risks from one currency to another. In reality, the risk is floating and changing are depending on the currencies correlation as well as on its course variance.
It's called spread-trading (spreads, in slang), also called the pair trading.
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