Isaiah David479_ McDonald#58

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How does portfolio-level hedging improve forex risk control?

Instead of hedging each position, portfolio hedging manages aggregate exposure. Institutions offset risk across multiple trades using netting strategies and cross-currency correlations. Retail traders can mimic by reducing overlapping trades—e.g., long EUR/USD and long GBP/USD can be partially hedged with USD/CHF shorts. Benefits: efficiency and cost reduction. Risks: miscalculation of correlations leads to hidden risks. Portfolio hedging reflects a professional approach: looking at the big picture, not isolated trades.