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Forex glossary

Hedging

Hedging in retail forex usually means holding an opposite position in the same pair so that the two offset each other while the market is unresolved. Some platforms allow it as a netting-free mode and others do not, so whether it is available depends on the broker and the jurisdiction. A hedge freezes the existing loss rather than removing it, and unwinding two offsetting positions is a decision of its own.

Related term

Stop Loss

A stop loss is an order that closes a position automatically if the price moves against it by a set distance. It converts an open-ended risk into a defined one…

Spotted an error or a missing nuance?

Definitions are written by us and corrected when we are told we are wrong. If your broker quotes differently — especially on gold — say so and we will record the assumption.