06/07/2026
LFX 101
🚨 WHY DID MY EQUITY DROP AFTER CLOSING A WINNING HEDGE TRADE? 🤔📉
Ever closed a profitable trade in a fully hedged position, only to see your account equity suddenly fall? It may seem like a platform error—but it's actually how hedging works.
🔒 The Hedge Protection Disappears
When you have both a Buy and Sell position on the same asset, the profits and losses offset each other.
Example: ✅ Buy Trade: +$500
❌ Sell Trade: -$600
Your net floating result is locked at -$100.
But the moment you close the winning Buy trade and secure the $500 profit, the hedge protection disappears. What remains is the losing Sell trade at -$600, exposing your account to the full floating loss.
As a result, your equity drops instantly.
💸 Don't Forget the Spread Costs
A hedge consists of two separate trades, meaning you pay the spread twice. Closing one side separately can make the impact on your equity even more noticeable.
💡 Smart Trader Tip
Instead of closing hedged positions one at a time, use MetaTrader's "Close By" feature.
✅ Closes both positions simultaneously
✅ Reduces unnecessary spread costs
✅ Prevents unexpected equity fluctuations
✅ Helps manage hedged positions more efficiently
📚 Learn Before You Trade
Understanding the relationship between Balance, Equity, Margin, and Hedging can save you from costly mistakes and emotional decisions in the market.
📌 Save this post for future reference. 📌 Share it with fellow traders who need to understand how hedging really works.
Learn. Trade. Grow.