Hedging

Hedging is opening a position that offsets the risk of another — most simply, holding both a buy and a sell on the same pair, so a move in one direction is partly cancelled by the other. Traders use it to protect an open position through uncertainty rather than closing it.

MetaTrader 4 allows hedging (multiple positions on the same symbol). Note that some regulators restrict it — in the United States, NFA rules prohibit hedging and apply the FIFO rule — so it isn’t available everywhere.

Hedging reduces some risk but adds cost and complexity, and it doesn’t remove the risk of loss.