Hedge Calculator

Hedging in forex means opening a position that protects you from losses in another position. You're not betting on direction—you're reducing risk. The simplest hedge: you're long EUR/USD but worried about a news event. You open a short position of the same size. Whatever happens, one wins and one loses. Your P&L is frozen until you close one side. But why would you do that instead of just closing the trade? Good question. Sometimes you want to keep your original position for the long term but protect against short-term volatility. Sometimes you can't close a trade due to regulations. Sometimes hedging with a correlated pair makes more sense than a direct hedge. Hedging isn't free. Spreads, swaps, and opportunity cost eat into profits. A perfect hedge locks in zero gain. The skill is knowing when partial hedges or correlation hedges make sense—reducing risk without eliminating profit potential entirely.