Hedging strategy

[hubert1111]

Hello,
i new i just want to ask:
When i see hedging strategy there is something like that :
first 0,1 lot than double 0,2 than 0,4
and final like multiple times it goes to 48 or something like that
so its 8 or 9 operation to make this strategy succesful
im i right

My question is why ???? what happend if i will double lot goes to 48 lot and what if market will still in my "wish"
Second question: If that works like that how much min money must i have to make this trategy work , i can start from 0,01 lot its ok

do i have chance to start with 450$ and use strategy,,, i will have then only 30$, 60$, 120$, 240$ so its 4 "possition" not 8 or 9 when it s show on images of hedging strategy which i still dont get . Best regards

 

[Fin_Trader]

This is a martingale strategy. Naturally, its first goal is to increase the deposit as quickly as possible. Experienced traders are wary of this method and resort to it rarely, because the risk of a deep drawdown or complete loss of the deposit is too high.

 

[Polakandil]

Using a lot size that is larger than the first position in my opinion is less wise and more risky. Besides trading costs, it is also more complicated to manage trades and account balances so that they are healthier in the long term.

 

[borzy]

Hello,
i new i just want to ask:
When i see hedging strategy there is something like that :
first 0,1 lot than double 0,2 than 0,4
and final like multiple times it goes to 48 or something like that
so its 8 or 9 operation to make this strategy succesful
im i right

My question is why ???? what happend if i will double lot goes to 48 lot and what if market will still in my "wish"
Second question: If that works like that how much min money must i have to make this trategy work , i can start from 0,01 lot its ok

do i have chance to start with 450$ and use strategy,,, i will have then only 30$, 60$, 120$, 240$ so its 4 "possition" not 8 or 9 when it s show on images of hedging strategy which i still dont get . Best regards

Sometimes the required number of doubling will be less like 5 or 6, your example means some worst case scenario that may happen in 0.001% cases. But it will certainly happen if you make a lot of traders. In other words you will most probably encounter bad streak of trades that will let your strategy eventually fail.

 

[PhoenixJ]

This is a martingale strategy. Naturally, its first goal is to increase the deposit as quickly as possible. Experienced traders are wary of this method and resort to it rarely, because the risk of a deep drawdown or complete loss of the deposit is too high.

Well said.

 

[brooksjanet24]

Hello,
i new i just want to ask:
When i see hedging strategy there is something like that :
first 0,1 lot than double 0,2 than 0,4
and final like multiple times it goes to 48 or something like that
so its 8 or 9 operation to make this strategy succesful
im i right

My question is why ???? what happend if i will double lot goes to 48 lot and what if market will still in my "wish"
Second question: If that works like that how much min money must i have to make this trategy work , i can start from 0,01 lot its ok

do i have chance to start with 450$ and use strategy,,, i will have then only 30$, 60$, 120$, 240$ so its 4 "possition" not 8 or 9 when it s show on images of hedging strategy which i still dont get . Best regards

With $450 I think you'd run out of margin way before reaching the higher lot size. Do you plan to test it on demo first?

 

[Polakandil]

Using an averaging up strategy may be lower risk than martingale. In averaging up the trader adds a new position when the price has risen and the trader believes the price will rise higher. On the other hand, martingale is very risky when adding double lots when prices fall with the trader's belief that the trend will move as before.

 

[brooksjanet24]

Using an averaging up strategy may be lower risk than martingale. In averaging up the trader adds a new position when the price has risen and the trader believes the price will rise higher. On the other hand, martingale is very risky when adding double lots when prices fall with the trader's belief that the trend will move as before.

How do you decide when to stop adding positions in an averaging-up strategy?

 

[Polakandil]

How do you decide when to stop adding positions in an averaging-up strategy?

I rarely use the averaging up strategy, but a scenario that can be tried is modifying the stop loss in the first position.

 

[Fin_Trader]

How do you decide when to stop adding positions in an averaging-up strategy?

The averaging strategy is dangerous for the deposit. If the price suddenly reverses on the news market, it is very easy to lose the deposit. It is better to trade on the market, setting the stop higher and opening a trade with a large step only when the previous position is already in breakeven.

 

[Imogen Beaumont]

Sometimes the required number of doubling will be less like 5 or 6, your example means some worst case scenario that may happen in 0.001% cases. But it will certainly happen if you make a lot of traders. In other words you will most probably encounter bad streak of trades that will let your strategy eventually fail.

Is there any way to protect yourself from those bad streaks?

 

[Lee.me]

Sounds like you're describing martingale hedging, basically doubling your trades to make back losses. Honestly, it’s pretty risky and can blow your account fast if the market keeps going against you. With just $450, you'd only manage a few trades before it gets scary. I'd start with safer strategies, keep learning, and protect your stress levels! Good luck!

 

[Fin_Trader]

Is there any way to protect yourself from those bad streaks?

Do you think it's so easy to predict where the price of an asset will move? You can predict, but not with a 100% guarantee

 

[Polakandil]

It is difficult or even impossible to predict with 100% accuracy, predictions can deviate from expectations.

 

[ArnavDeshmukh]

Martingale is risky; doubling lots can wipe out small accounts fast. Even starting at 0.01 lots, 8-9 losing trades will destroy $450. Markets don’t always reverse when you need. Better to risk 1-2% per trade. But, has anyone actually made this work long-term?

 

[Imogen Beaumont]

Do you think it's so easy to predict where the price of an asset will move? You can predict, but not with a 100% guarantee

True, nothing’s guaranteed. I just meant, is there a way to reduce the impact of bad streaks? Like with position sizing or better risk management?

 

[papaya_financial]

What you are describing sounds like a martingale-style hedging approach, where the lot size is doubled after each losing position until the market eventually moves in your favor.

Here’s the issue:

• If you start at 0.01 lots, doubling each time means your exposure grows very fast (0.01 → 0.02 → 0.04 → 0.08 → 0.16 → etc.).
• By the time you reach 48 lots, your margin requirement will be enormous, especially with leverage limits, and a small move against you could wipe the account.
• This is why people show “8 or 9 steps” — but in practice, most accounts blow up before that because the margin or free equity runs out.

With $450, you will not be able to survive many doubling steps, especially if your broker’s margin requirements are strict. You’d probably run out of usable margin after just a few positions, even if you start small.

If you really want to try hedging, you’d be better off doing it with a clearly defined stop-loss and smaller risk per step, rather than doubling endlessly. On Valetax, for example, you can use flexible lot sizing and set your risk per trade to stay within safe levels. This way, you avoid a margin call and keep trading even if the market goes against you for longer than expected.