Hedge trading is a risk management strategy that aims to offset potential losses in investments.
By using derivatives like options and futures, traders can protect their portfolios against market volatility.
Effective hedging can safeguard profits and reduce the emotional stress of market fluctuations.
Popular strategies include diversification across asset classes and employing stop-loss orders to limit potential losses.
Timing is crucial in hedging; traders must carefully assess market conditions to implement their strategies effectively.
As technology evolves, new tools and platforms are making hedge trading more accessible to individual investors.