7 minute read
Does JustMarkets Allow Hedging? Everything You Need to Know
from JustMarkets
by Exness_India
If you’re wondering, “Does JustMarkets allow hedging?” the answer is a clear yes. JustMarkets, a well-known forex and CFD broker, explicitly permits hedging as one of the trading strategies its clients can use. Whether you’re a beginner or a seasoned trader, hedging can be a powerful tool to manage risk, and JustMarkets supports it across its platforms. In this article, we’ll dive into what hedging means, how JustMarkets facilitates it, the pros and cons, and some practical tips to make the most of this strategy. Let’s get started!
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What Is Hedging, and Why Does It Matter?
Before we go deeper, let’s clarify what hedging is for those who might be new to trading. Hedging is like an insurance policy for your trades. It involves opening multiple positions on the same financial instrument—often in opposite directions—to reduce the risk of loss. For example, if you buy 1 lot of EUR/USD, you might also sell 1 lot of EUR/USD to “lock” your position. This way, if the market moves against you, one position’s loss is offset by the other’s gain.
Hedging is especially popular in volatile markets like forex and cryptocurrencies, where price swings can be unpredictable. It’s not about making huge profits but about protecting your capital. JustMarkets recognizes this, which is why they allow traders to use hedging without restrictions, alongside other strategies like scalping and news trading.
JustMarkets and Hedging: The Details
JustMarkets, founded in 2012 and regulated by authorities like CySEC and the Seychelles FSA, is a broker that prides itself on flexibility. Their official stance is clear: hedging is allowed across all account types, including Standard, Pro, Raw Spread, and Standard Cent accounts. Whether you’re trading forex, commodities, indices, or cryptocurrencies, you can open multiple positions in different directions on the same instrument. This is particularly useful on their MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms, which are designed to handle complex trading strategies like hedging.
One cool feature of JustMarkets is its support for the hedging system in MT5, which wasn’t originally built for it. Following trader feedback, newer versions of MT5 introduced hedging capabilities, including a “Close By” function that lets you close two opposing positions simultaneously. If the positions have different lot sizes, the remaining volume stays open, making it super flexible for managing your trades.
Why Choose JustMarkets for Hedging?
So, why pick JustMarkets if you’re into hedging? Here are some reasons based on their offerings:
1. Flexible Account Types: JustMarkets offers accounts tailored to different trader needs, from beginners with the Standard Cent account (minimum deposit $10) to pros with the Raw Spread account (minimum deposit $100). All accounts support hedging, so you can experiment regardless of your experience level.
2. Low Spreads and Fast Execution: Hedging often involves frequent trades, so low costs and quick order execution are crucial. JustMarkets boasts spreads as low as 0.0 pips on Raw Spread accounts and an average execution speed of 52 milliseconds, faster than the industry average. This means you can enter and exit hedged positions without worrying about slippage eating into your profits.
3. High Leverage: With leverage up to 1:3000, JustMarkets gives you the flexibility to open multiple positions with less capital, which is handy for hedging strategies. However, keep in mind that leverage cuts both ways—it can amplify gains but also losses.
4. Swap-Free Accounts: For traders holding hedged positions overnight, JustMarkets offers swap-free accounts (also called Islamic accounts). This means you won’t be charged swap fees for keeping positions open past midnight, which can save you money in the long run.
5. Wide Range of Instruments: Hedging isn’t just for forex. JustMarkets lets you trade over 260 instruments, including forex pairs, commodities like gold and oil, indices, and cryptocurrencies. This variety allows you to hedge across different asset classes, diversifying your risk management strategy.
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The Catch: Things to Watch Out For
While JustMarkets is hedging-friendly, there are a few things to keep in mind:
· Not Ideal for Lower-Risk Securities: If you’re looking to hedge with ETFs or bonds, JustMarkets might not be your best bet. Their focus is on forex, CFDs, and cryptocurrencies, so they don’t offer these lower-risk securities, which some traders use for hedging.
· Mixed Client Feedback: Some traders have raised concerns about JustMarkets, including issues with withdrawals and accusations of unfair practices. For instance, one user on Forex Peace Army claimed their profits were withheld due to alleged “fraudulent trading” tied to hedging or arbitrage, though JustMarkets refuted this. While many reviews are positive, these complaints suggest you should proceed with caution and thoroughly understand their terms.
· Light Regulation: JustMarkets is regulated by the Seychelles FSA and CySEC, but these aren’t as stringent as top-tier regulators like the FCA or ASIC. This might affect dispute resolution or investor protections, so make sure you’re comfortable with the regulatory framework before diving in.
· High Overnight Fees: Swap fees (for non-swap-free accounts) can be on the higher side compared to industry benchmarks, which could add up if you hold hedged positions for days or weeks.
How to Start Hedging with JustMarkets
Ready to try hedging with JustMarkets? Here’s a quick guide to get you going:
1. Choose Your Account: Pick an account that suits your trading style. The Standard Cent account is great for testing hedging strategies with minimal risk, while the Raw Spread account is better for high-frequency traders.
2. Download MT4 or MT5: Both platforms support hedging, but MT5 offers more advanced features like additional timeframes and the “Close By” function. You can access them on desktop, web, or mobile for flexibility.
3. Plan Your Strategy: Decide which instruments you want to hedge. For example, you could hedge EUR/USD with an opposite position or diversify by hedging forex with commodities like gold. Use JustMarkets’ Economic Calendar to stay on top of market-moving events.
4. Manage Risk: Hedging reduces risk, but it’s not foolproof. Use stop-loss orders and keep an eye on margin requirements, especially during volatile periods like economic news releases, when leverage may be reduced.
5. Test with a Demo Account: JustMarkets offers free demo accounts that mimic real market conditions. Practice your hedging strategy here before risking real money.
Tips for Successful Hedging on JustMarkets
To make hedging work for you, keep these tips in mind:
· Stay Informed: Use JustMarkets’ tools like the Economic Calendar and market news to anticipate price movements that might affect your hedged positions.
· Monitor Costs: Keep an eye on spreads, commissions (if using a Raw Spread account), and swap fees. These can erode profits if you’re not careful.
· Start Small: If you’re new to hedging, begin with smaller lot sizes on a Standard Cent account to get a feel for it without risking too much.
· Leverage Wisely: High leverage (up to 1:3000) can be tempting, but over-leveraging can wipe out your account if the market moves against you. Always calculate your margin requirements.
· Contact Support: If you’re unsure about swap-free accounts or other features, JustMarkets’ customer support is responsive and can guide you.
Is Hedging with JustMarkets Right for You?
Hedging with JustMarkets is a solid option if you’re looking for a broker with low spreads, fast execution, and flexibility across multiple asset classes. Their support for MT4 and MT5, combined with high leverage and swap-free accounts, makes it easy to implement hedging strategies. However, the lack of lower-risk securities like ETFs, mixed client feedback, and lighter regulation are worth considering before you commit.
If you’re a forex or CFD trader who values flexibility and wants to hedge to manage risk, JustMarkets is worth checking out. Just be sure to do your due diligence, test strategies on a demo account, and keep an eye on costs.
Final Thoughts
So, does JustMarkets allow hedging? Absolutely, and they make it easy with their platforms and account options. Whether you’re protecting your forex trades or diversifying with commodities, JustMarkets gives you the tools to hedge effectively. Just remember to weigh the pros (low spreads, fast execution, swap-free accounts) against the cons (light regulation, potential withdrawal issues) before jumping in.
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