Foreign exchange pricing - why do you try not to lock your position in foreign exchange speculation?
What are the disadvantages of lock operation? The following small series to analyze the harm of lock operation. Speculation foreign exchange profit lock is a certain range of floating profit after trading, open a new position at the same time, lock can be said to be harmful and unhelpful.
Speculation foreign exchange loss lock is a floating loss after trading, do not want to change the floating loss into actual loss, then continue to hold the original loss position at the same time, reverse opening new positions, trying to lock in the risk.
The practice of countless traders has proved that it is a stupid way of trading to speculate in foreign exchange and lock positions, especially for losses. One of the common faults of traders who dare not face the reality is that they dare not face the loss. Lockage is the expression of this mentality.
The disadvantage of lockup is that it takes up double margin, reduces the use efficiency of funds and increases the investment cost. Another drawback is that it's easy to solve.
Although the floating loss has not been converted into actual loss for the time being, the funds have been transferred away, but there is no signature of investors. More importantly, foreign exchange pricing lock seriously affects the trading mentality.
Due to the two-way position, there will be a certain psychological burden in the liquidation, it is inevitable to look forward and backward, at a loss. Sometimes, even if he clenched his teeth to get rid of his position, he would lock his position again because he was worried about the increase of position loss in the other direction. As a result, he fell into a vicious circle of locking his position. Finally, in desperation, they had to close their positions at the same time and turn the floating losses into actual losses.
In short, speculation in foreign exchange is a harmful trading habit. If we want to succeed in the foreign exchange market, we must abandon the lock up completely psychologically and practically. Once the operation is wrong, we should stop loss in time and find another opportunity.
[disclaimer] the publication of this article by finance managers for the purpose of transmitting more information does not mean that they agree with their views or confirm their descriptions. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk