The lock order came from futures at the earliest time, and later with the development of financial derivative products, it was applied to the trading of other products, and it was booming for a period of time. Order lock really means that after investors buy and sell futures contracts or other financial products, when the market shows a trend opposite to their own operations, they open a new position opposite to the original position, also known as lock-up and lock-up. The operation of locking orders is quite popular now, and many investors who have just entered the foreign exchange market also consider it a very good method. So whether the lock list is really useful, after reading the following article, I believe you will have the answer in your heart.
Locking positions are generally divided into two situations, namely profit locking and loss locking. Profit lock-up means that the futures contracts traded by investors have a certain range of floating profits. Investors feel that the original trend has not changed, but there may be a short-term retracement or rebound in the market, and investors do not want to pay the original low price. If the high price sell order is easily closed, a new position will be opened in the opposite direction while continuing to hold the original position. Loss lock-up means that the futures contracts traded by investors have a certain degree of floating loss. Investors can't see the market outlook clearly, but they don't want to turn the floating loss into actual loss, so they open in the opposite direction while continuing to hold the original loss position. Establish new positions in an attempt to lock in risks. The method and principle are the same whether it is profit locking or loss locking, so there is not much difference in essence, and both are wrong.
The biggest harm of lock-up is that it paralyzes the risk control of many investors. They always think that there is no problem in not letting the stop loss go. In the worst case, I will lock the order. Over time, the stop loss menu has become a decoration. If you want to achieve success or long-term stable profits from the financial investment market (especially the foreign exchange market), you must completely dispel the idea of locking orders in terms of trading discipline and investment psychology. In the war, the soldiers are very fast, and in the foreign exchange, the fighters should not be missed. Those who should stop the loss should stop the loss as soon as possible, and must not procrastinate again and again. In the end, they can only face the dilemma of being forced to close their positions or liquidate their positions. As the saying goes: To untie a bell, one needs to tie it.
Locked positions are "easy to knot and difficult to unravel", especially loss locked positions. Since the operation of locking positions will seriously affect the trading mentality, there will be some psychological pressure to buy and sell two-way position operations at the same time. Therefore, investors will have a certain psychological burden when unlocking. It is inevitable that they will look forward and backward, be at a loss, and often miss good opportunities to unlock their positions. Sometimes even if you grit your teeth and get rid of the position, but because you are worried that the loss of the position in the other direction will increase, you will not have enough confidence after all. If there is any trouble, you will lock the position again, and you will be completely trapped in a vicious circle of lock-up. In the end, the long and short positions may be closed at the same time in a fit of anger, and the floating losses will eventually turn into actual losses, and many investment opportunities that turn defeat into victory will be missed in vain. After all, lock positions are "easy to close and difficult to untie", and "it is appropriate to untie but not to close". If you can set the stop loss early at the key technical position, you don't have to be so embarrassing.
Risk control is always the first priority. The easiest way to control risk is to stop loss. The execution of stop loss determines your trading discipline. The quality of trading discipline directly affects your trading success rate and profitability.
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