I just realized that many of you still don’t fully understand hedging in crypto trading. In fact, it’s not as complicated as you think—what is a hedge, and why do so many professional traders use it? Simply put, it’s a way to open 2 opposing positions at the same time to reduce risk when you’re not sure where the market is headed.

A real-life example: you see Bitcoin’s price is too high and you feel it’s about to drop, but you’re worried that if it keeps rising, you’ll miss the opportunity. At that point, instead of just shorting normally, you can open a short position with a larger volume and simultaneously open a long position with a smaller volume. The result is that if the price keeps evaporating, the long position helps you limit your losses. But if the price falls, you close both positions—your profit from the short can offset the loss from the long, and you still make money even if it’s not some huge profit.

The great thing about hedging is that you can still DCA into one of the two positions normally—you don’t have to wait. And in rare cases, both positions can even end up profitable at the same time; that’s when you get “compound gains”—the moment every trader is hoping for.

So what does hedging actually mean on your own exchange? It’s very simple: just close all open positions, go to settings, and turn on protection mode. From there, you can freely open long and short at the same time without worrying that they’ll affect each other. I think this is a pretty useful skill for anyone who wants better risk control.