Is "lock-up" in foreign exchange trading saving you or destroying you?

　　What is the significance of locking orders in foreign exchange transactions?

　　In the process of foreign exchange trading, many investors have implemented "hedging" behavior. This behavior usually occurs when "the floating loss of the trade order is close to or exceeds their own risk tolerance", trying to use this "tool" to reduce or hedge the loss of the existing position, or even the risk of liquidation. In addition, many traders who have not developed the habit of "stop loss and take profit" also use this function frequently.

　　However, for traders who have lost so much that they are overwhelmed, does this "hedging" function make sense? Can it really reduce their risk? Or is it ultimately futile? Let's take a look at what the "battle-hardened" veteran traders have to say.

　　@Xihua Hanbing, who has 10 years of foreign exchange margin trading, expressed his views on this on Zhihu. First, is it meaningful to lock positions in foreign exchange trading? He believes this mainly depends on what the trader's purpose of locking positions is. From a macro perspectiveThere are two kinds of lock-up, one is to open the same number of reverse orders to lock in profits after floating wins, which is not much different from closing the position; the other is to open the same number of reverse orders to lock in losses after floating losses, which is similar to position squaring.

　　"What is the psychology behind these two kinds of lock-ups? Personally, I think the first is to lock in profits after eating this cycle band and wait for the correction in this cycle to enter the market again. The second kind of lock-up has not been tried. My inference should be that I don't agree that the floating loss after this entry is my fault. I want to lock in the loss and not let the loss of principal further expand, and hope that the market will slowly realize my mistake and return to the direction that the second lock-up thinks should go."

　　He believes that the secondLocking a position is not meaningless at all, at least it can give traders some psychological comfort, that's all"Whether the specific market outlook will return to the correct trend that the lock-up person thinks is correct, I personally think it depends on fate, why lock up if you don't depend on fate?"

　　Duke, who has 8 years of experience in foreign exchange trading, believes that hedging is different in fluctuations and trends.In fact, it should not be called lock position in the trendIf it rises too much, it is expected that there will be a pullback to add short orders in order to eat the pullback, and you don't want to lose the low-level orders. It should be counted as two operations in different time periods, rather than locking positions. During the shock, you don't know which direction you will break through. Do short orders and multiple orders on the upper and lower rails, and then close the counter-trend orders after a complete breakthrough.

　　"However, most of the locked orders are usually due to losing a lot of money, but psychologically, I always think that I may turn back at any time, butThe position or psychology can no longer support the pressure to continue to resist the order. I feel that adding a reverse order will not continue to lose money. "Ostrich Policy"Most of these locks are counter-trend orders, and to unlock them, it is often necessary to solve them with a flat loss order, but psychologically, most people choose a flat profit order, so there is no solution. "

　　The trader from Nantong, Duke, further explained, "Locking should be a short-term active hedging behavior rather than a passive ostrich behavior that locks in lossesLocking the position is to avoid short-term opposite market shocks. Locked orders should be held for a short time, up to every other day within a day, and are generally used for data quotes or breaking major news. As a trader, when releasing multiple data, it may cause large fluctuations in both directions or the data may be contrary to the current trend. Open a multi-order with the same number of hands at the same price, an empty order, or an equivalent order opposite to the order in hand at that time. "

　　"When the data is released, first level the order that has immediate profit after the announcement, and then level or continue to hold another order, it is easy to lock and difficult to unlock. For beginners, the more you lock, the less sense of direction, and it is not easy to control. Most traders who are able to do this kind of operation have a deep understanding of the habits of the operating variety. For beginners or traders who have not yet stabilized profits, the low-frequency operation mode of large stop loss and small positions is easier to get out of the quagmire of losses," Duke added.

　　 "It mainly depends on what the logic of hedging is," said "Little Fox", an individual trader.The core logic is still to hedge riskIf you think the market will move either way, then you don't need to use the lock function, because the market trend is nothing more than long or short for you. If you feel that there is still an uncertainty, you may lock your position. "

　　Survey data show that most traders believe that locking orders may be an unhelpful behavior, and even amplify the risk of exposure to positions, ultimately leading to"Picked up sesame seeds and lost watermelon"However, a few traders believe thatIn extreme circumstances, locking positions is a correct and risk-reducing approach.

　　An investor with several years of trading experience said: "When you face a large position, you can't control the risk, and the market has not finished, and the capital can't bear it, you know how good it is to lock the position. People who don't have much money and are very good at trading will definitely lock the position, lock the position back and forth, and finally turn from loss to profit. This is the most basic thing in trading."