Forex Hedging risks

[Ovo]

Hi My name is Ovo and I am a new member to this forum.

I have heard so much about the forex hedging technic but not really sure of the risk
Say you bought long the GBR/JPY with an interest paying broker A and sold JPY with an interest free broker B. What happens if the JPY makes a gain and GB falls. Would you still make a profit. Does it matter which currency fell or rose?


Thanks in advance for your response

 

[Rhody Trader]

If you go long GBP/JPY and then sell JPY elsewhere, you are doubly short the Yen. A long in GBP/JPY means long GBP and short JPY. If JPY rises you will get hurt. If GBP falls you will get hurt. You have no hedge as proposed.