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Disadvantages of futures locking
Disadvantages of futures locking

(1) From the transaction results, the use efficiency that affects fund locking and liquidation is basically the same. After closing the position, the margin is not occupied, but the margin of one-way position is doubled when opening the position. After the lock-in, a large amount of margin is unnecessarily occupied, and other varieties cannot be made when there is a market, which seriously affects the full and rational use of funds.

(2) affect the order speed. When the variety shows an obvious trend, it must first close the position in the opposite direction (called unlocking at this time), and then lift the deposit and open a new position. If you don't lock the position, you can open the position and open a new position without closing the position.

(3) affect the operating mentality. After the initial liquidation, traders temporarily become outsiders, and it will be relatively objective and fair to look at the price trend of futures with a bystander attitude. However, due to the two-way locking, there are gains and losses respectively. Traders are often troubled by profit and loss and can't focus on the price trend of the market. They often operate because of profit and loss, not because of the trend, just as the narrow wooden strips that were originally placed at low positions were artificially placed at high altitude, and it is the same reason that it is easy to close positions when opening positions.

What does futures locking mean? For the above content, some people say that both sides can make money by locking positions, which sounds reasonable, but it is not. Because a person who can lock a warehouse can open a new warehouse. He knows which direction to flatten first, and he knows which direction to build a new position. Moreover, due to the influence of profit and loss, the attitude (mentality) of locksmiths to the market is often not as rational and objective as that of new locksmiths. Therefore, it is not surprising that locksmiths often lose money at both ends if they can't unlock it well. There are also some fans who lock the door and think that they often make money at both ends. In fact, it is often not the profit generated by unlocking. In fact, it is a kind of profit without stop loss, because unlocking the profit position first will not be released at the highest or lowest point most of the time, so that the loss of the loss position in the other direction will expand and the risk will be out of control. The only way to make it profitable is not to lose money. Even if the price trend is not analyzed, the probability of profit is as high as 80%. The loss caused by the failure of other 20% positions will be far greater than the profit of 80% profitable positions.

Seeing this, everyone should know the shortcomings of futures locking. If you want to know more about investment knowledge, please pay attention to us!