Liquidation is a collective term for the behavior of long sellers selling their positions or short sellers buying back the sold positions in foreign exchange transactions. Generally speaking, the entire process of foreign exchange trading can be summarized into three aspects: opening a position, holding a position, and closing a position. There are two main operating procedures for closing a position. First, in a bullish market, buy, open a position, and then sell to close the position; second, in a bearish market, sell, open a position, and then buy to close the position.

For example, an investor is bullish on the EUR/USD exchange rate and buys 2 mini lots/30K EUR/USD on January 11. The transaction price is 1.1930. At this time, the investor holds 2 mini lots EUR/USD long position. On January 15, the investor saw that the EUR/USD exchange rate had risen, so he sold to close the position of 1 mini lot of EUR/USD at 1.2100. After the transaction, the investor's actual position was only 1 mini lot of long EUR/USD. .