# Forex Scalping & Hedging With OANDA

Decrease risk using allocation management and single unit precision trading.Forex hedging is defined as combining identical, similar or correlating currency pairs with the goal of eliminating or decreasing risk. Eliminating risk, when implemented correctly also equates to eliminating profits. Therefore, the preferred method in our opinion is to decrease risk while also maintaining the opportunity to earn profits in the form of Daily Fx Pips while forex trading. Best of all it can be done is a scalping mannner with short sessions of 30 minutes to hours.

## Decrease Losses and Add to Wins Early – Common Sense Trading

Who wouldn’t understand this? Yet the opposite is usually done. No offence to our rapidly growing list of Martingale traders, however, we know that you have your genius quarks and hit it big more than most traders would imagine. For now, Let’s look at a real example.

You don’t need a hedging compatible account for this, in fact you don’t want to go that route. Instead, it is best to trade two sub-accounts which can easily be accomplished with OANDA. There will be two sub-accounts, one where long trades are placed and the other for short trades. Trades will be sized by pip value, the only way to allocate with precision and this can only be done with accuracy using OANDA.

### Step 1 – Place Equal Pip Value Trades

Subaccount 1 – Long Positions

– Buy EURUSD, Pip Value $1.00

– Double the size when the position reaches a 10 pip profit.

– Halve the size when the position reaches a 10 pip loss.

Subaccount 2 – Short Positions

– Sell EURUSD, Pip Value $1.00

– Double the size when the position reaches a 10 pip profit.

– Halve the size when the position reaches a 10 pip loss.

### Step 2 – Simultaneously Cut Losses & Add to Winners

Let’s assume the rate for the EURUSD increased to 10 pip and the spread is continuously at 1.5 pips. With a 10 pip move the long subaccount would be at a profit of $8.50 while the short subaccount would be at a loss of -$11.50 for a total among the two accounts at $8.50 + (-$11.50) = -$3.00.

When the 10 pip mark has been reached the long position will increase to a $2.00 per pip value and he short position will be decreased to a $0.50 per pip value for a realized loss of $5.00 from closing 50% of the short position. Let’s see what happens when the EURUSD moves up another 5 pips. Did you figure it out? Amazing, right?

### Seem Complicated?

It’s not easy for most, but that’s why you are here. Once you grasp a few concepts and become familiar with the interface, it’s not complicated. It only takes a reasonably smart, non-lazy human to take the time to discover the possibilities of this method.