FXGT's Hedging Rules: A Complete Guide from Prohibited Actions to Trading Procedures

While FXGT allows hedging within the same account, it also has several strict prohibitions

Ignoring these rules and continuing to trade carries the risk of having your profits confiscated, or in the worst-case scenario, having your account frozen

This article a detailed explanation of the absolutely essential prohibited actions .

We will explain the advantages and disadvantages, as well as specific trading methods, in a way that is easy for beginners to understand , so please use this as a reference.

For information on FXGT's reliability and instances of withdrawal refusals, please check out our FXGT reviews and reputation page

What is a hedging transaction?

Hedging is a trading strategy in simultaneously holds both a buy and a sell position .

This can be considered one of the distinctive trading methods in FX

With hedging, regardless of which direction the market moves, one of the positions is guaranteed to generate a profit, thus mitigating the risk of escalating losses

Here are some examples of transactions:

Thus, hedging can be used for risk hedging and strategic profit securing, and is a particularly effective method when sudden market fluctuations are expected or when you want to hold a position for the long term

However, there are not only advantages but also disadvantages and prohibited actions, so it is important to fully understand them before trading

FXGT allows hedging within the same account

While many overseas forex brokers prohibit hedging, FXGT allows hedging within the same account.

This is an important point for traders when developing diverse trading strategies

Being able to perform hedging trades within the same account eliminates the hassle of managing multiple accounts

Furthermore, it will enable quicker responses during sudden market fluctuations, making it easier to control the risk of losses

However, it is important to note that hedging across accounts with other companies or multiple accounts is prohibited

Advantages of hedging trades on FXGT

Hedging offers the following advantages over trading a single position:

1. The margin will be offset
2. This can help avoid forced liquidation
3. It allows you to observe the market over the long term with low risk
4. Holding onto unrealized gains can be a tax-saving strategy

Please use this as a reference to broaden your trading strategy

The margin will be offset

One of the advantages is that the margin is offset

FXGT has a system in place where, if you engage in hedging, the margin required for the buy and sell positions will offset each other

In other words, when opening a new position, you don't need margin for a hedged position, allowing for more capital-efficient trading .

Therefore, you can allocate more funds to other transactions

This can help avoid forced liquidation

The second advantage is that it helps avoid forced liquidation

Even if the market moves against your expectations, if you have a hedging strategy, you can offset the unrealized loss on one position with the unrealized profit on the other position.

This is expected to prevent a sharp decline in the margin maintenance ratio and help avoid a forced stop-loss

Being able to maintain a position even when the market is volatile is a significant advantage

It allows you to observe the market over the long term with low risk

The third advantage is that it allows you to observe the market over the long term with low risk

By using a hedging strategy, you can avoid being swayed by short-term market fluctuations and observe the market from a long-term perspective .

Since significant losses won't occur regardless of which way the market moves, you'll have ample time to carefully plan your next strategy

Therefore, it will be an effective way to reduce mental stress, especially for beginners

Holding onto unrealized gains can be a tax-saving strategy

The fourth advantage is that you can use unrealized gains to reduce your taxes

If you have to file your tax return at the end of the year, you can carry over profits to the following year by hedging your positions without closing any positions that have unrealized gains.

Therefore, it can be expected to have the effect of reducing taxes for that year

However, since tax-related strategies require specialized knowledge, please consider this only as an example

Summary of Tax-Saving Strategies for Overseas Forex Trading | Explanation of How to Avoid High Taxes and Whether Loopholes Will Be Discovered

Disadvantages of hedging trades on FXGT

While hedging offers many advantages, it also has the following disadvantages:

1. Transaction fees are doubled
2. Closing only one position changes the margin maintenance ratio

Please understand the two points above and take care to avoid unexpected losses

Transaction fees are doubled

One of the disadvantages is that transaction fees are doubled

In hedging, you hold both buy and sell positions simultaneously, so the spread and fees are doubled.

In particular, using hedging strategies with stocks that have wide spreads will result in higher transaction fees

When starting a hedging strategy, be sure to carefully calculate the transaction costs beforehand

Closing only one position changes the margin maintenance ratio

The second disadvantage is that closing only one position changes the margin maintenance ratio

During hedging, buy and sell positions offset each other, resulting in a stable margin maintenance ratio

However, if you close only one of the profitable positions, the offsetting effect disappears, and the margin maintenance ratio changes .

Changes in the margin maintenance ratio can increase the risk of a forced liquidation, so caution is advised

Prohibitions on hedging trades at FXGT

While hedging within the same account is permitted at FXGT, the following prohibited actions are in place to prevent malicious trading

1. Hedging transactions between accounts at different companies
2. Hedging across multiple accounts
3. Organized hedging by multiple people or groups
4. Hedging transactions that exploit the zero-cut system

Please be sure to check the above rules, as violating them may result in penalties

Hedging transactions between accounts at different companies

The first prohibited activity is hedging transactions between accounts at different companies

FXGT prohibits hedging transactions between an FXGT account and accounts with other FX brokers.

This is because attempts to gain unfair profits by exploiting small differences in exchange rates undermine the fair trading environment that FXGT provides

Using both an FXGT account and an account with another broker to engage in hedging will be detected by the system and considered a violation of the terms of service

Therefore, when performing hedging trades on FXGT, be sure to do so within the same account

Hedging across multiple accounts

The second prohibited activity is hedging across multiple accounts

FXGT prohibits hedging across multiple accounts under the same name.

This practice is prohibited because it poses a risk of abusing the zero-cut system

The purpose of dividing accounts into multiple accounts is to prevent the intentional use of zero-cut by incurring large losses in one account

Therefore, even if you have multiple accounts, always perform hedging within a single account

Organized hedging by multiple people or groups

The third prohibited activity is organized hedging by multiple individuals or groups

FXGT prohibits organized hedging by multiple individuals or groups.

These rules are in place to prevent activities such as unfairly influencing the market through large-scale transactions or fraudulently receiving bonuses

Organized transactions are more likely to lead to fraudulent activities that exceed the limits of individual discretion

Therefore, avoid coordinating hedging strategies with friends or family

Hedging transactions that exploit the zero-cut system

The fourth prohibited activity is hedging, which exploits the zero-cut system

FXGT strictly prohibits hedging trades that exploit the zero-cut system.

The zero-cut system is a mechanism designed to protect traders from sudden market fluctuations

Therefore, intentionally generating large unrealized losses and engaging in hedging trades aimed at triggering a zero-cut is considered fraudulent activity that violates FXGT's service philosophy

Such transactions may be subject to severe penalties, including account suspension

What are the penalties for engaging in prohibited activities in hedging trading on FXGT?

If you engage in hedging transactions that violate FXGT's terms and conditions, you may be subject to the following penalties:

If fraudulent activity is discovered, the trading account is typically frozen first, and then all profits earned from previous trades are confiscated

In some cases, you may be asked to return the funds you withdrew

FXGT uses advanced systems to constantly monitor for fraudulent activity

and strictly adhere to the rules before starting any transactions

How to perform hedging trades on FXGT

Hedging trades on FXGT can be easily performed from both the PC and smartphone versions

Here, we will explain each method in detail

1. Hedging on FXGT PC version
2. Hedging on the smartphone version of FXGT

The basic procedure is the same; you simply place an order to reverse your existing position, so please give it a try

Hedging on FXGT PC version

The trading method on the PC version is as follows:

Please try the method described above

Hedging on the smartphone version of FXGT

Here's how to trade using the smartphone version:

Please try the method described above

Frequently Asked Questions about Hedging Trading on FXGT

We have compiled the following frequently asked questions and answers regarding hedging on FXGT

1. Why are hedging trades between FXGT and other companies detected?
2. How much margin is required when using hedging strategies on FXGT?
3. Is it possible to simultaneously close hedged positions on FXGT?
4. Is it possible to use hedging strategies with an automated trading system on FXGT?

Before starting a transaction, please review the above questions and answers

[Summary] Hedging trades on FXGT

FXGT's hedging strategy can be an effective trading strategy if you understand how to use it correctly

The advantage of hedging is that the margins are offset, making it easier to avoid a forced stop-loss

However, on the other hand, there are also disadvantages, such as doubled transaction costs and a sudden change in the margin maintenance ratio if only one position is closed

Furthermore, FXGT prohibits the misuse of its rules regarding hedging between accounts of different companies, across multiple accounts, within groups, and the use of its zero-cut policy

Violating the above may result in severe penalties, such as account suspension or confiscation of all profits, so caution is advised

Understanding the advantages, disadvantages, and rules of hedging is crucial for successful hedging . Please use the information explained in this article to gain an advantage in your FXGT trading.

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