I just realized that many of you don't quite understand what hedging is and how it works in actual trading. In fact, it's simpler than you think.

Hedging basically means opening two opposite positions at the same time — one long and one short. But why do that? Usually, when you see the price too high, you want to short to profit from the downward trend, but you're not sure if the market will go down or keep rising. At that point, instead of going all-in short, you open a short position first and then open a smaller long position to protect yourself.

Scenario one: the price continues to rise. At this point, your long position will offset some of the loss from the short, or even turn into a profit. So you've minimized your risk.

Scenario two: the price reverses and drops. You can close both positions at the same time, with the profit from the short offsetting the loss from the long, and ultimately you still make a profit, albeit smaller than going all-in short from the start.

Additionally, if you see the price too low and want to go long, you do the opposite — open a long position and a smaller short to protect yourself. The great thing about hedging is that during the process, you can still DCA normally into one of the two positions, without standing still.

There's a rare but very interesting case: both positions are profitable at the same time. Then you'll have compound gains, meaning profits from both sides.

The setup is extremely simple. Just close all current positions, go into settings, turn on the hedging mode, and you're done. Then you can open two positions as usual. I see many traders overlook this method, but it’s really a powerful tool for effective risk management.