Pros and cons of positions locking

The extent to which you can control the risks, determines your future success. In our opinion, the positive financial result on the fix api forex market depends by 40% on your emotions control and by 40% on the risk control. The remaining 20% ​​of the success lies in the availability of a trading strategy. If 40% of success depends on you, then the remaining 60% we can help you achieve it.

Thanks to our algorithm, the work logic is a profitable mechanism for analyzing the financial asset, as well as control and monitoring of the risks. Moreover, if you use the software for its intended purpose without interfering a robot in the process, this will reduce your psychological burden.

Also, there are several types of non-standard methods on the market for reducing the current risks in fix api trading, which we implemented in one of our robots. It’s about locking.

Locking the trading positions (or as it is also called – a “lock”) is a process of fixing a certain risk in order to reduce it in the future. To put it simply, its work algorithm is in the fact that if a trader already has a loss-making position, then he opens an additional deal on the same financial asset, but in the opposite direction. Thus, if the asset value goes further on the trend, the loss of the first transaction will grow, and the second will accumulate profit. However, the financial result for both transactions will remain unchanged.

This is done to fix the risk, and in order this big risk to not be reflected in the financial indicators. In addition, in order to fix profit in the future on the second transaction, which will show a positive result, as well as to limit and reduce the risks for the first transaction.

This approach has both its pluses and minuses:

+ This approach fixes a certain risk percentage. If you trade speculatively and the main thing is that at the moment there was no increased volatility in the fix api forex market, which can impulsively close your position, then some traders resort to this method.
+ If there is a lateral movement in the market, then this approach will yield additional profit.
+ Locking positions is used in algorithmic trading because the trading robot can more accurately determine when the locked position is opened and when it is closed.

– If you apply this method of risk control in manual mode and for a long time, then there is no guarantee that after fixing the profit, the quotes will unfold in the direction of the negative trading operation.

– This technique is in contrast to the classical approach of the risk control.

– It takes an additional margin on the same financial instrument in the accounts of the fix api forex brokerage companies.

Relying on the positive aspects of locking, we created a trading robot that trades on this method and conducts fix api trading with minimal risk parameters, and sometimes even with zero value (depending on the volatility and financial asset) –

This software has a fix api arbitration principle for analysis of the financial assets, but the transactions are opened based on the “lock” system. So, when there is an arbitration opportunity between two different accounts of brokerage companies, the robot opens a deal to buy where the quotes are lower and to sell where the quotes are higher. Thus, it turns out to be a kind of lock. When the arbitrage situation is exhausted, the trading robot closes the profitable transaction and thereby a positive result is fixed on the basis of exchange rate discrepancies.

This approach of arbitration principle implementation allows us to fix about 8-10% yield per week, and the lock algorithm controls risks and keeps them close to zero.

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