Hedging is a key risk management strategy in forex trading, allowing traders to protect open positions from unfavourable market movements. Whether you’re using simple offsetting trades or complex multi-currency strategies, choosing the right broker is essential. This guide explains how to evaluate forex brokers that allow hedging, helping you identify those that support flexible, transparent, and effective hedging practices.

What Is Hedging in Forex?

Hedging involves opening one or more positions to offset the risk of another. This can include:

• Direct hedging: Taking an opposite position in the same currency pair (e.g. buying and selling EUR/USD simultaneously).
• Cross hedging: Using correlated pairs to reduce exposure (e.g. long EUR/USD, short GBP/USD).
• Multi-currency hedging: Using different pairs and instruments to manage portfolio risk dynamically.

Not all brokers allow direct hedging—especially those governed by certain regional regulations (e.g. US brokers regulated by the NFA prohibit it).

What to Look for in a Hedging-Friendly Forex Broker

1. Hedging Policy Transparency

Always check whether the broker explicitly states that hedging is allowed.

Look for:

• “Hedging permitted” in the account terms or FAQ
• No FIFO (First In, First Out) rules that interfere with trade closure
• No automatic position netting or offsetting
• No limitations on the number or size of hedged positions

If the broker does not clearly mention hedging support, request written confirmation before opening an account.

2. Execution Model

For hedging to work effectively, execution must be clean and reliable.

Best brokers offer:

• STP or ECN execution with no dealing desk
• Minimal slippage between opening and closing trades
• Support for partial closes and simultaneous long/short positions
• Fast execution speeds (under 100 milliseconds)

Avoid market makers that may block or reprice hedging strategies.

3. Platform Support for Hedging

The trading platform must allow traders to hold multiple positions in the same instrument.

Preferred platforms:

• MT4: Natively supports hedging with separate long and short trades
• MT5 (with hedging enabled): Must be configured for multiple positions (not default netting mode)
• cTrader: Offers flexible hedging with advanced order control
• Proprietary platforms should be tested in demo mode to confirm hedging behaviour

Always check that the platform does not auto-net or combine positions.

4. Margin and Leverage Treatment on Hedged Positions

Different brokers handle hedged margin differently.

Compare brokers based on:

• Hedged margin requirements: Some brokers reduce required margin for opposing trades
• Leverage: Must be sufficient for managing multi-leg strategies
• Hedged trade impact on free margin and equity
• Visibility of hedged exposure on account overview

Choose brokers that minimise margin costs for hedged trades and explain their margin treatment clearly.

5. Swap and Spread Considerations

Even in a hedged position, costs can accumulate over time.

Evaluate:

• Spreads on both long and short positions
• Swap/rollover rates: You may still pay a negative swap on one side of a hedged trade
• Availability of swap-free accounts (if needed for long-term hedges)
• Commission structure on ECN or RAW accounts

Low-cost hedging is essential for scalability.

6. Risk Management Tools

Effective hedging brokers provide tools to manage multiple positions and protect exposure.

Look for:

• Hedging calculators and margin tools
• Multi-chart and multi-order views
• Portfolio exposure breakdowns
• Built-in alerts for account drawdown and volatility shifts

These features support real-time management of complex strategies.

7. Regulation and Legal Standing

Ensure the broker is regulated in a jurisdiction where hedging is legally permitted.

Best choices are regulated by:

• FCA (UK)
• CySEC (Cyprus)
• ASIC (Australia)
• FSCA (South Africa)

Avoid brokers regulated only in the US (CFTC/NFA), where hedging is restricted.

Top Forex Brokers That Allow and Support Hedging

Here are brokers well-known for allowing hedging and supporting it with strong infrastructure:

Intertrader

Intertrader is FCA-regulated and offers true STP execution with no dealing desk, making it suitable for hedging strategies.

Why It’s Ideal:

• Full support for direct and cross hedging
• MT4 platform with no FIFO or netting rules
• Raw spreads with tight pricing
• Strong UK regulation and execution transparency

TiBiGlobe

TiBiGlobe offers an institutional-grade platform and flexible execution environment tailored for multi-strategy traders.

Why It’s Hedging-Friendly:

• Advanced margin calculations for hedged trades
• Hedging available on all currency pairs and instruments
• FIX API support for automated hedging systems
• Fast execution with minimal slippage

AvaTrade

AvaTrade allows hedging across MT4, MT5, and its proprietary platforms, with strong account protection tools.

Hedging Features:

• No restrictions on position direction
• AvaProtect risk management for hedge-related strategies
• Clear swap policies and margin calculations
• Regulated in multiple regions where hedging is permitted

Vantage

Vantage supports scalping, EA use, and hedging on its ECN and standard accounts, ideal for traders needing flexibility.

Hedging Support:

• MT4 and MT5 with hedging mode
• High leverage options and low-cost execution
• VPS and automation support for hedging systems
• No position netting or FIFO enforcement

Markets.com

Markets.com provides user-friendly access to hedging strategies across forex, indices, and commodities.

Why It’s Suitable:

• Full support for opposing trades on the same instrument
• Proprietary and MT5 platform compatibility
• Margin and swap visibility in mobile and desktop view
• Strategy templates for hedge-based risk control

Conclusion

If you’re wondering how to evaluate forex brokers that allow hedging, focus on execution model, platform functionality, margin treatment, and regulatory support. The top brokers—Intertrader, TiBiGlobe, AvaTrade, Vantage, and Markets.com—allow flexible hedging without restrictions, providing the speed, transparency, and control that hedging strategies require.

In hedging, precision is key. Choose a broker that supports your strategy—not one that limits it.