what is forex hedging

what is forex hedging is a risk management technique utilized. By traders to mitigate potential losses resulting from adverse price movements in currency pairs. Traders employ various hedging strategies. Such as derivatives like options or futures contracts. Or entering offsetting positions in correlated currency pairs. The primary goal of forex hedging is to protect trading positions from unfavorable market conditions. Thereby safeguarding capital and preserving profits. By implementing effecti, traders can minimize downside risk while still participating in potential upside movements, enhancing overall risk-adjusted returns. Understanding how to employ strategies enables traders to navigate volatile forex markets with greater confidence and resilience, ultimately improving trading outcomes and long-term profitability.