How to get out of the lock? Let's consider all options! Anton Hanzenko. - Ester Holdings

How to get out of the lock? Let’s consider all options! Anton Hanzenko.

Lock or lock transactions are transactions that are opened on one trading instrument in different directions, as a rule, with the same volume. As a result, the trader receives a certain loss (not fixed), which does not change when the price moves, without taking into account the swap. But how to get out of the lock? Let’s have a look at different options in this article!

Lock or locking strategies are very common in the Forex market, which is caused by the main advantage of the “lock”, and the nominal time that it gives to ponder the situation on the market without fixed losses. But along with the advantage, a trader using locking trades may find himself in a difficult situation of getting out of the lock, which is a very difficult task even for experienced traders.

How to get out of the lock? Let’s consider the following steps:

All castles can be conditionally divided into two categories:

  • when the price is in the lock zone;

  • when the price left the lock zone in either side.

Depending on the type of lock, the following actions are possible to exit the lock.

Before you begin the process of getting out of the lock, you should immediately decide on the sequence of actions and stick to them in the future. Even if they can lead to deliberately expected losses. Also very important moment of preparation of an exit from the lock there is calculation of management, as the majority of outputs from the lock means averaging or opening of new locks that requires free resources. And of course the psychological aspect is important. The process itself exerts great psychological pressure on the trader. Sometimes it can exert more pressure than the lock itself.

How to get out of the lock when the price is in the lock zone

Such a situation may seem very simple at first glance, since the exit from such a lock can be made when the channel is broken through to one of the parties with the further closing of the opposite transaction. But this channel, the lock zone, can be several hundred points and the price can move in it for a very long time.

The main feature of this situation is that the market maintains a common lateral trend, which determines the further pattern of price movement. As a result, the method of “intracanal trade” or the method “to break through the channel with averaging” is used to exit from such a lock.

It is also possible to use a lock inside the lock, but if the process of getting out of the lock causes discomfort – you should refrain from frequent use of this approach.

The main goal in closing the lock is to create the right analytical model for further market movement and to increase the positive volume of deals, which will cover the negative volume. Adhering to this principle, there is no difference – to close the locking transactions sequentially or all together, most importantly, to comply with money management.

In the next article we will deal with a more common situation when the price is outside the lock.

Follow Trader’s blog, do not miss useful information!

Hanzenko Anton

Подписаться на новости Трейдера

Subscription to the news of the trader!
Subscribe to the news of the trader in order to keep abreast of current events!


Вы с украины?