Exiting the locks or locking means minimizing the losses and the consequences from them which were obtained as a result of unsuccessful transactions and the subsequent increase in capital.
Forex lock, in fact, contributes to the solution of problems like: the market moves to the side remote from the trader and the latter is confident that soon he will turn around and begin work on increasing the capital. Why is this happening? We learn further.
Locking means “lock”. This procedure consists in opening new orders that are previously open and become identical to the last one. The trader does this to save the deposit funds. There are only two situations that can cause the trader to install locks. They are:
- A desire to ensure the safety of your account when the advancement of Margin call is to be made or shortly before this action.
- In cases if the trades are opened in the direction of trends and it is obvious that there are no reversals, placing the lock you can earn on the corrections occurring in the market.
The first case described above is a kind of SOS signal. The lock is used as a means of requesting help. In this case trader opened many orders, focused on one direction. The level that is visible in the line and shows the status of MT4 at the bottom of the screen leads to a downward trend.
Such situations can arise in the case of a poor possession of the merchant money management, when he opens positions in a large lot or many orders in one direction. These trading advisors often open each subsequent transaction with a larger scrap, willing to get out of the minus. But in this case the probable outcome is the discharge of the deposit. It will move in the same direction, but he knows that in the near future there will be a rollback.
Virtually all brokerage companies perform or support entry to the lock. After all, they assume that each subsequent open transaction will block the previous one. In this way the level of the margin grows and the loaded deposits become free. The broker sets the goal not only to relieve the funds, but also to earn as much as possible.
How to exit locks
There are three main options for getting out of Forex locks:
After the trader enters the lock, he must evaluate the market and its possibilities. It is important to wait for the case before the closing the order, when the market will return in its original position (when the lock was put).
Reduction of the size of locks
It’s immediately important to place a stop order lock while opening it. This is done to close the given lock already at a profit. Further there will come a time when the trader will be neither in a minus, nor in a plus. You need to open the next smaller in size order in the same direction immediately.
Negative lock X
The strategy is to add an extra dimension, multiplying the volume of Y.
There is nothing difficult in the exit from the locks, if you trust this business professional. At the first stages of trading this skill should be trained in the Trading Group company. Then your profit is guaranteed to be not lost and to be increased.