Hedging is a strategy where traders open opposite positions on the same trading instrument to manage risk.

• Complete Hedging:
  • Buy and sell orders have the same lot size on the same instrument.
  • No margin is occupied for these hedged positions.
• Incomplete Hedging:
  • Buy and sell orders have different lot sizes.
  • Only partial margin is required.

Example:

• You open 1 lot buy of gold and simultaneously open 1 lot sell of gold.
• In the MT4/MT5 terminal, the “Trades” section shows zero used margin because the positions completely offset each other.

Hedging allows traders to protect existing positions or manage market risk without closing trades.