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Introduction to Forex Trading - Locked Positions


Locked Positions (LockedPositions), from the futures market, refers to cont forexbonusrebateuing to buy orders in the opposite direction of the orders held in the h forexdiscountbrokerss, called forexrebatesbrokers positions, for example, in the hands of the previous long orders of a contract, continue to buy short orders of the same contract; or in the hands of the previous short orders of a contract, continue to buy long orders of the same contract in For example, if a trader opens a position to sell 1 lot of EURUSD for a period of time and the price moves away from the traders expectations, the trader decides to open another position to buy 1 lot of EURUSD and the end result forex discount brokers that the loss from the first sale of the currency pair is fixed in the foreign exchange market, a locked position ( LockedPositions) some places are also known as hedging (Hedging) [classification of locked positions]: a. Locked positions will generally be divided into profitable lock single and loss lock single profitable lock position refers to the traders open transactions have a certain amount of profit float, but the market may appear a short fall or rebound, the trader expects the overall trend of the future remains unchanged, and do not want the original low-priced buy orders or high-priced sell orders The trader will continue to hold the original position and at the same time, open a new position in the opposite direction. The opposite of the opening transaction partial lock is just the trader in the same account to do the opposite of the number of open transactions and the previous number is not exactly equal [occupied cashback forex calculation]: in the occupied margin above, the rules of each platform completely locked position occupied margin is not the same some traders platform completely locked position of the single is still required to occupy the margin, that is, two single need margin; and some of the platform Locked single is not occupy the margin, while the previous single is occupy the margin; there are platforms lock single will release the margin of the locked two single, that is, has used the advance for 0 Of course, there are some platforms will also be based on the currency pairs traded to different lock policy, some currency pairs lock occupy margin, some currency pairs do not occupy margin [will not blow up after the lock? Will my position be blown up after locking? Some people may ask after fully locking the position, my order is actually hedged, so how will it blow up? The answer is: Yes, because even after the full lock, due to the existence of the cost of spread, your account net value will still change Lets look at the formula for blowing up: Generally speaking, the rules of traders to close positions through the prepayment ratio level, for example, some traders are in the prepayment ratio level of 50% to close the position prepayment ratio level = net value / used prepayment x 100% net value = Balance + floating profit - floating loss [Discussion]: floating spreads, the change in net value in the case of a fully locked position in the case of a fully locked position, due to floating spreads, the net value of the trader will produce changes The following is illustrated by a case: For example: assume that the current position is locked single for 1 lot of Europe and the United States: when the spread is 2 points, for example: when the current spread is 2 points, profit and loss for -40, then the account net value is also reduced by 40 and when the spread becomes 10 points: when the spread is 10 points, the profit and loss is -120, the account net value is also reduced by -120 so, even in the case of a fully locked position, due to the floating spread, the total profit and loss of the account is still changing, the account net value is also changing (1)  fully locked position release Margin, the used advance is 0 As we mentioned above, some dealers give their clients the policy that if the position is completely locked, then the two orders are completely hedged and the used advance is 0 In this case, according to the formula: advance percentage level = net value / used advance x 100%, the denominator is 0. At this time, if it is the expansion of the swap and spread, resulting in a net value of 0 or When it is lower than 0, it will produce a burst (2)  completely locked position of the single both ends of the margin collection / collection of a single margin this is the case we mentioned above completely locked position still collects margin, this time has used prepayment is not 0. In this case, according to: prepayment ratio level = net / used prepayment x 100% of the formula, the used prepayment still exists, the At the same time, as long as the prepayment ratio level is lower than the closing ratio established by the broker due to spread expansion and segregated interest, then even if the position is completely locked, it will still blow up [Conclusion]: a. Even in the case of a completely locked position, the net value is always changing due to the existence of spreads and swap interest If the spread is fixed, the net value is unchanged in the case of a completely locked position, ignoring the segregated interest b. When locking positions, be sure to look at the locking policy of each platform, especially in the case of locking positions that take up margin, brokers will set different rules, such as weighted average to calculate the price
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