Speculating and Hedging in FOREX Trading

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FOREX Traders speculating in the FOREX market trade to make profits by buying one currency and then selling another simultaneously.

On the other hand, a hedger will trade FOREX to establish a position in an attempt to protect his margin or cancel the risk in another investment or currency. A hedger has a particular interest in a particular FOREX currency whereas the speculator doesn’t have any attachments to the FOREX currency.


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Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts