Confused About Going Short or Long? Enter Both Directions at the Same Time | Hedging Explained

[00:02] With every market movement, someone is always winning and someone is losing. If you're in a long position and the market is rising, you're profiting and happy, but everyone who's shorting is losing and upset. Let me give you an example of a situation we've all experienced. When we enter a trade, we set our entry price,

[00:18] trade, we set our entry price, take-profit price, and take-loss price. The price moves slightly towards profit, then reverses completely, hits the stop-loss, and we lose the trade. Of course, from the same point where we entered and lost, someone else entered against the trend and won. Everyone

[00:34] wishes all their losing trades had been entered against the trend and were profitable. So, what do you think about us trend and were profitable. So, what do you think about us entering short positions at the same time,

[00:52] market direction? This video is divided into three sections. The first section explains the concept, the second covers all the possible scenarios for the trade's trajectory, and the third section

[01:04] discusses effective strategies for applying the term "hedging." Welcome! In a new video, I'm Mohammed, and you're currently watching the Dr. watching the Dr. [Music] channel.

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[02:07] people through the link in the description box. Thank you for watching the video. Let's begin. The video explains the concept of conversion, which is what we do in any trading deal. We

[02:19] enter at a specific price. For example, let's say I want to enter a short position at this price because I think the price might bounce back down from this area. So, I enter at

[02:31] this price and define my profit zone. Let's say I want a 2% profit and I set a stop-loss at, say, 1%. So

[02:49] now I have a 1% stop-loss and a 2% profit. The trade could move in either direction; it could go up and cause me to profit. Everything seems fine. But, based on the principle of consolidation, what do I do if the price reaches my

[03:02] consolidation, what do I do if the price reaches my stop-loss level? In this case, I'll open a new trade, but this time it's a counter-trade. If the new trade, but this time it's a counter-trade. If the price reaches this level,

[03:15] price reaches this level, I expect it to bounce back and go up. So, I expect it to bounce back and go up. So, I'll open a new long position from the point where I lost, and I'll set my take- profit again at 2%, the same as the

[03:30] stop-loss level. I'll also set my stop-loss at the entry point of my first short position. So, in this scenario, if

[03:42] So, in this scenario, if the price... The price rebounded from that area. First, I entered a short position, which reached the stop-loss level and caused me to lose. I have a possibility that the price caused me to lose. I have a possibility that the price will continue upwards and give me my profit. What

[03:57] would have happened? I would have lost 1% on the stop-loss and gained 2% when the long position won. Therefore, I compensated for my loss on the losing trade. This is simply and

[04:11] compensated for my loss on the losing trade. This is simply and briefly the principle of hedging. Now, let me tell you about the possible scenarios using the capital management system for hedging. Let's

[04:23] go back to the drawing of the trade in Mauritania. Currently, as we said at the beginning, I see that I want to enter a short position from this area. So, I short position from this area. So, I directly set a short position at this price with a

[04:37] directly set a short position at this price with a specific profit percentage and a specific stop-loss. Right now, I have a possibility that the price will go down or up to the stop-loss level, but if it reaches the stop-loss level, I want it to enter. I'll put another long position, and its stop-loss will be at the same level

[04:53] as my initial entry point for the long position. So, I'm currently in another long position, but its entry price is at the same level as entry price is at the same level as my stop-loss, and the stop-loss is at the same level as my initial

[05:07] entry price. I'll set my profit again, and in this case, and in this case,

[05:36] of the three possible outcomes. The second, and second best, is that second, and second best, is that the price rises from this the price rises from this level, hits the stop-loss, enters the long position,

[05:57] rises again, giving me my profit on the second long position. In this case, I'll have lost the first thing. I lost 1% on the first trade, which was the short trade, but I

[06:09] compensated for 2% with the second long trade. Therefore, I would have made a 1% profit from Therefore, I would have made a 1% profit from both trades. There's a third possibility, the worst-case scenario. This scenario is simply

[06:26] that the price might drop from this area, that the price might drop from this area, for example, and then suddenly rise unexpectedly, triggering a long for example, and then suddenly rise unexpectedly, triggering a long trade. The price might then move again and

[06:38] trade. The price might then move again and fall, triggering another stop-loss order. So, fall, triggering another stop-loss order. So, I would have lost 1% on the short trade I would have lost 1% on the short trade and another 1% on the long trade

[06:50] because the price hit the stop-loss order consecutively. We're faced with one of these possibilities, and with the hybrid or hedging strategy, we use this approach to try and increase our chances of

[07:04] this approach to try and increase our chances of winning instead of losing. The entire principle of trading, my friends, is based on probabilities, and in any market situation, there are always those who win and those who lose. In this case, we are exposed to either winning or losing. But

[07:20] we are exposed to either winning or losing. But we have a possibility of winning twice and losing once. So let's look, for example, at this trade we made here in this area. made here in this area. Notice how the trade unfolded. Immediately, like the viewers,

[07:35] Notice how the trade unfolded. Immediately, like the viewers, the price reached the stop-loss area without giving me any profit. But the trade closed immediately with a single candle, giving me my profit for the second trade. So that's what happened to us now. Now for the second question: I made a 1% profit, and in total, I have a

[07:53] trade that lost due to a stop-loss hit, and another trade that compensated for the loss and gave me an additional profit. Now that we've discussed the possible scenarios regarding hedging or

[08:05] hybrid trading, let me tell you about effective strategies you can use to effective strategies you can use to achieve the highest possible profit. The first method achieve the highest possible profit. The first method is to always use hedging in an area that is a

[08:18] is to always use hedging in an area that is a strong support or resistance zone. When the price reaches this zone, if it breaks through, it will either rise immediately

[08:30] either rise immediately upwards or reverse immediately from there. Therefore, you'll always be dealing with support and resistance zones. There's a support and resistance zones. There's a high probability that the price will reject

[08:44] these zones and fall, creating strong resistance, or that it will break through these resistances and rise directly upwards. So, you're in a hedging zone, or a support and resistance zone. If you do this, you'll have a

[08:57] support and resistance zone. If you do this, you'll have a high probability of profiting in these areas. The second strategy, or rather, let me give you my second piece of advice, is simply to give you my second piece of advice, is simply to use hedging when there's a

[09:11] major news event coming into the market. For example, when there's a price announcement or a specific piece of news related to the market, there might be price movement or fluctuations when this news is released. At these

[09:24] times, we usually see either a single candle directly rising upwards or a single candle falling downwards. These candles are always a reaction to major news happening in

[09:36] are always a reaction to major news happening in the market. So, here, in the form of two trades, if we're in a the market. So, here, in the form of two trades, if we're in a hybrid trade system... Conversely, it's possible that one trader might win while the other wins, and

[09:49] this often happens. Of course, I'm not saying it's 100% guaranteed, but I'm telling you that experience shows that

[10:01] shows that hedging often yields very respectable profits. That's all I'll tell you in today's video, which I hope you'll enjoy. If you're not subscribed to the channel, please subscribe. And if you liked

[10:13] the video, please give it a like. This greatly helps the video reach a wider audience on YouTube. Thank you very much, and peace be upon you.