Hedge Protection

Master automated risk management through intelligent position hedging.

Hedge Protection is an advanced risk management feature that automatically opens counter-positions when trading strategies experience significant losses. By monitoring the worst-performing trade in each strategy and triggering hedges based on pip loss thresholds, this system helps protect capital while maintaining your original market positions.

Important Notice

Hedge Protection increases your position size and market exposure. While it can limit losses during adverse moves, it also adds complexity to position management. This feature is recommended for experienced traders who understand risk management and hedging strategies.

Prerequisites

Before using hedge protection, ensure you're comfortable with basic EA operations, understand position management, and have tested the feature thoroughly on a demo account.

Core Concepts

Automatic Protection

When your trades start losing money, hedge protection automatically opens a counter-position to limit further losses while keeping your original trades open.

Strategy-Based Monitoring

The EA groups your trades by strategy name and monitors each group separately. When the worst trade in a group hits your loss limit, protection activates.

Flexible Risk Control

You control how much protection to apply - from partial hedging that maintains some market exposure to complete neutralization of directional risk.

Key Benefits:

Loss Limitation: Caps your maximum loss at the trigger level regardless of further market movement
Position Preservation: Keeps your original trades open in case the market reverses in your favor
Hands-Free Operation: Works automatically without requiring you to monitor markets constantly
Flexible Management: Hedge positions can be configured with their own profit and loss exit points

Activation & Setup

Hedge Protection is an EA-only feature controlled exclusively through the EA interface. Unlike other advanced features, it cannot be activated through signal parameters and operates globally for all strategies when enabled.

Mode	Description	Behavior
Disabled	Feature completely disabled (default)	No hedge monitoring or protection
Enabled	Always active using EA input settings	All strategies monitored for hedge triggers

Important: When enabled, hedge protection applies to ALL trading strategies managed by the EA. There is no per-strategy control - the feature operates globally based on the settings configured in the EA interface.

Test hedge protection thoroughly on demo accounts before enabling it on live trading. Start with conservative settings and gradually adjust based on your risk tolerance and market conditions.

Hedge Management

The Hedge Management section contains five simple settings that control when and how hedge protection activates. Understanding these settings helps you customize the protection to match your trading style and risk tolerance.

Setting	What It Does	Recommended Values
Hedge Management	Turns the feature on or off completely	Disabled (safe default) / Enabled (active protection)
Hedge Trigger	How many pips you're willing to lose before protection kicks in	30-50 pips for major pairs, 20-30 for scalping
Hedge Volume %	How much protection to apply (100% = complete protection)	75-100% for strong protection, 50% for partial
Hedge Take Profit	When to close hedge with profit (0 = manual control)	15-30 pips for active management, 0 for manual
Hedge Stop Loss	When to close hedge with loss (0 = no automatic stop)	20-40 pips recommended, never leave at 0

How Hedge Protection Activates

Understanding when and how hedge protection triggers helps you set appropriate parameters for your trading strategy:

Monitoring Your Trades: The EA continuously watches all your open positions, grouping them by strategy name
Finding the Worst Performer: In each strategy group, it identifies which trade is losing the most money
Checking the Loss: When that worst trade reaches your trigger level (in pips), protection activates
Opening Protection: A hedge position opens in the opposite direction to limit further losses
Managing the Hedge: The hedge position can have its own profit and loss targets, independent of your original trades
Ongoing Protection: Your losses are now capped - further adverse price movement won't hurt as much

Simple Rule: The EA only looks at your worst-performing trade in each strategy. Even if you have multiple losing trades, only the biggest loser determines when protection kicks in.

Understanding Hedge Volume Percentage

The hedge volume percentage determines how much protection you get. Here are common scenarios to help you choose the right setting:

Your Trades	Hedge % Setting	Protection Applied	What This Means
0.3 lots BUY positions	100%	0.3 lots SELL hedge	Complete protection - no more losses
0.2 BUY + 0.1 SELL trades	100%	0.1 lots SELL hedge	Protects your net 0.1 lots exposure
0.4 lots SELL positions	75%	0.3 lots BUY hedge	Partial protection - 0.1 lots risk remains
0.2 lots BUY positions	150%	0.3 lots SELL hedge	Over-hedged - now net 0.1 lots SHORT

Choosing Your Level: 100% gives complete protection, 75% gives partial protection while maintaining some upside, 150%+ actually reverses your market direction.

Managing Your Hedge Positions

Once a hedge is placed, you can let it manage itself or control it manually. Here's how the exit settings work:

Exit Setting	Set to 0 (Manual)	Set to Pips (Automatic)	Best For
Hedge Take Profit	You decide when to close for profit	Closes automatically when hedge gains X pips	Active traders (manual) vs. hands-off approach (auto)
Hedge Stop Loss	No automatic protection (risky!)	Closes automatically if hedge loses X pips	Always set this - never leave at 0

Important: Your hedge positions are separate from your original trades. When a hedge closes (profit or loss), your original trades remain open. This gives you flexibility to manage each part of your position independently.

Always set a hedge stop loss! Without it, your hedge could lose more money than your original trade, defeating the purpose of protection.

Practical Examples

Example 1: Single Position Hedge

Setup: EURUSD strategy with single BUY position, 30-pip trigger, 100% hedge volume

Event	Price	Position Status	Net Exposure	Action
Initial Entry	1.2000	0.10 lots BUY (TrendStrategy)	0.10 lots LONG	Monitor for trigger
Price Drop	1.1970	0.10 lots BUY (-30 pips)	0.10 lots LONG	Hedge triggered!
Hedge Placed	1.1970	0.10 BUY + 0.10 SELL (TrendStrategy_Hedge)	0.00 (Neutral)	Risk neutralized
Further Drop	1.1930	0.10 BUY + 0.10 SELL	0.00 (Neutral)	No additional loss

Result: Original position locked at -30 pips loss. Further price movement doesn't increase losses.

Example 2: Multiple Trades Protection

Scenario: You have multiple EURUSD trades under "MyStrategy" - some winning, some losing

Your Trades	Size	Current Result	What Happens
BUY Trade #1	0.20 lots	-10 pips	Not the worst yet
BUY Trade #2	0.15 lots	-28 pips	This is your worst trade - triggers protection!
SELL Trade #3	0.10 lots	+8 pips	Making money - doesn't affect trigger

What the EA does: It sees you have 0.25 lots net BUY exposure (0.35 BUY - 0.10 SELL). With 75% hedge setting, it opens a 0.19 lots SELL hedge to provide partial protection while keeping some upside potential.

Example 3: How Hedge Exits Work

Scenario: Your GBPUSD trade triggered a hedge, and you've set automatic exit levels for the hedge

Your Trading Situation:

• You bought 0.30 lots GBPUSD at 1.3000
• Price dropped to 1.2960 (-40 pips) and triggered your hedge
• EA opened 0.36 lots SELL as protection (120% hedge setting)

Your Hedge Settings:

• Hedge Take Profit: 20 pips (closes hedge when it makes 20 pips)
• Hedge Stop Loss: 15 pips (closes hedge if it loses 15 pips)
• Original BUY trade: Still open, not affected by hedge exits

What Could Happen Next:

Market keeps falling: Your hedge makes money and closes at 20 pips profit
Market bounces back: Your hedge loses 15 pips and closes, but your original trade recovers
Either way: You're protected from major losses while keeping upside potential

Common Questions & Solutions

Question/Problem	Why This Happens	How to Fix It
My trades are losing but no hedge is opening	Feature might be disabled or trigger level too high	Check that Hedge Management is "Enabled" in EA settings. Lower your trigger if needed (try 25-30 pips).
I see multiple hedge positions for one strategy	EA was restarted and lost track, or duplicate EAs running	Each strategy should have only one hedge. Manually close the extra hedges and check for duplicate EAs.
The hedge size doesn't look right	The EA calculates based on your net exposure, not individual trades	If you have mixed BUY/SELL trades, the hedge protects your net position. This is normal behavior.
My hedge won't close automatically	Take Profit or Stop Loss settings are set to 0	Set Hedge Take Profit and Stop Loss to positive numbers (like 20 and 30 pips) for automatic management.
Only one losing trade triggered the hedge	The EA watches your worst trade, not all losing trades	This is how it's designed to work. The worst performer determines when protection activates.
I can't find my hedge positions	Hedge positions have different comment names	Look for positions with "_Hedge" added to your strategy name (e.g., "MyStrategy_Hedge").
Hedge keeps triggering too often	Trigger threshold too small for market movement	Increase your Hedge Trigger setting. For volatile pairs, try 40-50 pips instead of 20-30.
100% hedge didn't completely neutralize my position	Broker lot size restrictions cause small rounding differences	Small differences are normal due to broker minimum lot sizes. The protection is still effective.

Risk Management Reminder

Always test hedge protection thoroughly on demo accounts before live trading. Start with conservative settings (higher trigger thresholds, lower hedge percentages) and gradually adjust based on your risk tolerance and market conditions.

For complete parameter references and additional configuration options, see the Configuration Guide.