....Ok, so its not a hedge trade in the traditional sense.

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Setting up a situation where you are both long and short on the same instrument is what most of us retail traders refer to as a hedge trade, while this is not technically correct, it can still offer up a good low risk or zero risk situation particularly in some of the choppy movement or when the direction bias is not certain.

I usually refer to this method when two opposing signals are setting up... which one do you take?   -   Take both.

In the chart below you can see the 60 min GBPUSD, with Fib retracements on and I have identified that price is at an interesting level for me to consider a short trade... at this point of the chart price has also moved through my long trigger. So a short trade setting up with potentially a long trade soon.

The next chart shows the short trade setting up now giving me my entry Short @ 1.9660

So that's the first part of the "hedge" set up and price is now running nicely in my favour with some small profits already booked.

At this point of the chart I don't know that the long trade will set up for me, but I'm planning ahead and if it does come to the level I want to take a trade on that I will intend on taking the long trade as well.

Note that I will not be closing out the short trade.

The chart below show that price has moved down to the level that I was prepared to take a long trade at

and this chart chows the entry for the long

So, not I have a situation where if price goes down I make pips, if price goes up, I make pips and if price stay range-bound I'm making pips.

So whats the point most of you will ask... consider this trade was taken Friday afternoon going into the weekend, I have profits booked on both sides of the trade and now a risk free and profitable situation.

Next time two opposing trades set up for you don't just choose one and hope for the best consider both as valid trade options

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Enjoy

Phil