Forex lock (Blocking) and exiting
The main task of a trader in the Forex - reduction of losses incurred by failed transactions, and then making a profit. Forex lock allows you to find a way out of a situation where too many open positions in the same direction, but are you sure that the market will turn in your direction. Today we look at the concept of Forex castle and examine how it is advisable to use it.
The notion of locking
Blocking (from the English. Lock - lock) means exhibiting trader countertrade equal volume whose direction is opposite to the previously open position (s).
Forex locks or Loka traders exhibited in several cases:
* To protect the deposit, when possible offensive margin call (Margin call) or earlier.
* To increase profits on pullbacks when the basic position is open on the trend.
* Blocking can be applied to automatic forex robot.
Let us both. First - a cry for help, protection trader your deposit when too many open positions in the same direction and so-called level displayed in percent in the status bar at the bottom MT4 falls. This is what happens when a trader mistakenly entered too large lot or adviser when selling Martingale method, opened too many positions in one direction or another. It is no secret that the councilors setochniki-open the following items, the volume increase to cover the losses from the previous. If too many open positions, it could be fatal for the deposit.
The second case, when using Forex locks - increased profits if the trader does not want to close the current position, open the trend, but believes that this is a small correction. For example, one open long position of 10 lots on the uptrend. Technical analysis gives a signal that small corrective movement down. Trader opens a short position volume 2-3 lots, hoping to get more revenue. The basic position is not closed.
Most Forex brokers Blocking support, but I would recommend a broker Alpari. Blocking means that the volume of transactions as to void overlap each other (example below). In fact, going into Loki, we reduce the burden on the deposit, but set ourselves another problem - how to get out of both deals with usury?
Forex options out of the castle
Ways to get out of the castle several Forex.
1. Tactics called negative castle.
When you open a lock order analyze the market. Lok at closing plus, waiting for the price returns to the first position, previously unprofitable. As a result of such actions can be detrimental not only to withdraw the warrant to zero, but also make a profit on both positions.
2. Tactics reductions in Forex castle.
When the pending order and opened lok, exhibiting a stop order for locking position to retract it without a loss. Once go to zero, another open position in the same direction but at a smaller volume.
This method works best in flat.
3. A negative tactics castle with an increase in volume with the addition of BA.
Advantages and Disadvantages of Forex locks
Of the benefits of closing note to breakeven or even a small plus a losing position. This is only possible with the skillful use of locks. You can also receive additional income for corrective movement, as already described above. Locking allows the trader to take a break, maybe to find the money to replenish the deposit in a critical situation.
Disadvantages. There are several:
* Lock position, it is difficult to comply with money management.
* Accumulate negative swaps, most often on both positions.
* Psychological discomfort in case of prolonged retention position.
* Rather complicated way out of Forex castle.
Disadvantages clearly outweigh the benefits. Unfortunately, in most cases, the locks will result in loss of money. Therefore it is not suggested to use Loki in his trade. And if it really happened that way without locking out - try to correct the situation to get out of this, even a small loss.
1. If you open the lock, it is very desirable to be in front of the monitor until the lock is closed.
2. The wider lok, ie distance between orders, the more difficult to make a profit or break even.
3. Opening the lock, do not rush and ponders what to do. Loss in the castle and there will be no increase. But hasty hasty action on your part can make the situation worse.
4. Coming out of the localized or going into it, it is very desirable to conduct a qualitative analysis of the market situation.
Go back MetaTrader 4 for Android / Next article Teletrade - reviewed traders