This works like having an investment in Bitcoin but risking suppose $ 200, this is how I understand it, but how to do when volatility can currently work for or against us? If we choose the option to risk the $ 200 and it is lost, how to recover that $ 200? risking another $ 200 or do you have another particular strategy?
I'll try to explain what I have understood so far, so basically hedging means you put some funds on the other side too to manage some potential loss. for example you have on buy order like 1K dollars and you see the market going down then what hedging means is you put some money on the other side too for sell order so that in case market goes unexpected you can save some part of the loss.
But, the problem with hedging is that you are also going to cut off your profits by a large margin in case the market behaves in the expected manner and the price changes in your favor. Basically hedging can be understood for gamblers like betting money on Team A and then betting some on Team B to ensure you don't loose everything.
