Two-Asset Preservation Strategy

Hedging (going long and short at the same time) strengthens your defense compared to single-position trading

You can trade in a steady and secure manner

However, just because you hedge

“Whether you preserve profits or preserve losses, the result is zero; nothing changes.”

There are people who say that

But that is merely a misconception

Hedging means that your positioning for trading is elevated in terms of your mindset

Trading hinges on the mind

If it isn’t mental, automated trading or system trading is more suited to the market

But how about automated trading or system trading?

Since there are now better-performing logics than before,

in recent times the results look good, but when the market changes it becomes much harsher

Even so, if you were to start with a single position

you would start to falter physically from the losses

Adaptability to the market tends to be determined by the mental state

To win and survive in the market

you need to firm up your defense

As they say, survive in the market for a year; protecting trading capital is quite important

The goal is to make profits, but it makes no sense to trade at the cost of losing your capital

Hedging can both defend and attack

Hedging serves to reset the mind once and restart trading

To protect trading capital, hedging is indispensable

The role of hedging is to prevent losses in trading

Therefore preserving profits is fine either way

Be sure to preserve your losses

Hedging strategies mainly involve preserving losses to reset the mind

The role of mental reset may seem small

But in reality it yields quite significant results

Just as individual traders are not focused on reducing losses

This is actually the most important issue

Incurring losses also means the mind is affected

If you don’t admit losses, you cannot prompt capital replenishment through trading

Because if losses are not admitted, the only possibility is a final big loss

This is a natural result, but while profits are being made it’s easy to forget

From the perspective of incurring losses, the mental impact is already there, which is a mistake

So you should reset as if nothing happened using loss preservation

Unlike single-position trading

Loss preservation through hedging doesn’t damage the mind as much

Whether there is technical analysis or not,

the act of trading and the profits you make can change

Subtle mental influences affect the outcomes

Basically

Plan for a lump-sum settlement over one to two weeks

I usually redo it in one week

If the logic is swing-based, it can be longer

But holding onto it too long isn’t meaningful

Also in hedging

Don’t expect too much profit

Hedging will accumulate extra spread costs and such

Preserve losses

Reset the mind

Target the next trade

When a trading opportunity arises, resume trading

If profits extend and meet the exit criteria, take profit

Do not consider the loss situation at this time

Loss preservation means not emphasizing cutting losses

Keep awareness of losses to a minimum

The greatest strength of hedging is to lessen awareness of losses

And then aim to improve the overall result

Hedging is done to strengthen the mental state

With mental strength built, switch to single-position trading

It’s like the first time you learn to ride a bicycle

In the market, performance changes with the mind

In hedging, the primary focus is on mental strengthening

There are people who continue to trade profitably with hedging

Keep hedging until you reach a point where results emerge from trades with a diminished loss awareness