Locking is generally divided into two ways, namely profit locking and loss locking. The so-called lock position generally refers to an operation method in which investors open positions with the same amount but in the opposite direction, so that the profit and loss of positions will not increase or decrease no matter where the price changes.
In fact, the so-called locked position is another term, called hedging transaction. For beginners who use the leverage of the foreign exchange market to conduct foreign exchange transactions, the most fundamental reason for locking positions is that they don't want to lose too many positions, so they open another position in the opposite direction of the original position, which is locking positions.
Extended data:
Locking is generally divided into two ways, namely profit locking and loss locking.
1, profit
Profit lock-in means that futures contracts bought and sold by investors have a certain floating profit. Investors feel that the original general trend has not changed, but the market may fall back or rebound briefly. Investors don't want to close the original low-priced orders or high-priced orders easily, so they continue to hold the original positions and open new positions in the opposite direction.
Step 2 fail
Loss locking means that there is a certain degree of floating loss in futures contracts bought and sold by investors. Investors can't see the market outlook clearly, but they don't want to turn the floating loss into an actual loss, so they continue to hold the original loss position and open a new position in the opposite direction in an attempt to lock in the risk.
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