A dual hedge strategy is one of the simplest and safest approaches because trading in such a volatile market is not an easy task. Always try to protect your investment especially in times like these when there is war and uncertainty everywhere.
It is better to trade safe haven assets first and choose investments where your capital loss is either impossible or very small.
In my opinion, Gold and Silver are safe haven assets so trading them is more suitable especially in a hedge strategy. With hedging you can always monitor your profit and loss, your risk of loss remains minimized and your profit ratio can also improve.
Today I want to talk about another simple and effective strategy that I am currently testing in practice.
I have tested many strategies before. Some were successful and some were not. Previously I used this hedge strategy with a grid system but now I have decided to use it directly.
Select Gold and Silver then divide your total investment into four equal parts. In other words you will invest in four separate layers.
I have 800 USDT allocated to each layer.
In the first layer regardless of the current Gold price or market position I always open a long position on Gold using 75% of the amount which is $600.
Against that I open a short position on Silver using the remaining 25%, which is $200 because Silver is about three times more volatile and moves faster than Gold.
After opening both positions I wait for a price difference that gives me a profit. If the trade becomes profitable I close both positions and book my profit.
However if the trade goes into loss I wait for Gold to fall by 2% from my first entry price.
When Gold drops by 2% I open the second layer by investing another $600 in a Gold long position and another $200 in a Silver short position.
Again, I wait for the positions to become profitable. If they do I close them and exit with profit. Otherwise I wait for another 2% drop and repeat the process with the next layer.
Whenever any layer becomes profitable I close that layer and secure the profit.
If all four layers become active at the same time I do not use a stop loss or book a loss. Instead, I close any profitable Silver short positions and secure those profits.
Since Gold is a safer asset with low volatility and I would have averaged my position over an 8% decline. I simply hold my Gold positions and wait for the market to recover.
As each layer recovers I close it one by one and secure the profit.
This is the simple strategy that I am currently testing.
At the moment I have only the first layer open where I have invested $600 in Gold and $200 in Silver.
One important point to remember is that you should not use leverage in this strategy. Trade only with 1x. so that your investment remains safe while generating steady income.
I hope you guys will like this post and is interesting as well. If you find it informative then dont forget to give me a support. Share you reviews in the comment section below. Thank you all for your time reading the content.
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