NFA bans locking from 15 May 2009 - page 20
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Your mistake is that you and many others relegate a tool called LOC to the ranks of strategy.
When it can hardly be called a tactic... A tactic of current action... that's all...
+1 Just action, not strategy
They are demanding some facts, which makes it seem as if no one has seen/heard anything else.
So, what is netbooking, anyone can study it thoroughly and without stress in any nettoplatform.
What's the problem, and as you see nothing invented (as in all that I write) and anyone can check ...
5. Convenient display of trading history. - taken
But that also depends on the platform. As has already been said, displaying "virtual" orders instead of one "real" position will not confuse anyone.
(then why the % of losing funds is many times greater than the % of those who are losing...?? ;)))))))))))))))))))))))))))))))))))
Are there any statistics? Or it's just for the glossary?
Addendum. It is possible to build a mega lot with locks, provided there is zero margin for locking.
This is on demo. On the real, open a position on the full margin will be given only on another, non-locked instrument.
+1 Just action, not strategy
It doesn't matter what you call it. What matters is whether it should be used.
I use the first 2 pros on my list myself, I consider the rest to be self-defeating. Never heard any arguments.
OK, let's look at a negative loc. It seems that Masterforex in its writings tried to justify the advantage of such a loc over a stop. It seems that the only more or less decent justification he has is protection against stop out. But if you look at it more closely, it turns out to be nothing more than overstaying - only the drawdown on the position is not growing, but canned. We put off executing stop orders on positions, hoping for better times. But they may not come for a long time - exactly as long as we would look for entry into a new position, if there were no lock and all positions were closed.
But we don't need to look for an entrance, we already have one, we just need to find the exit, but we have two :_))
This does not necessarily mean a positive outcome for both exits, as it does for any trade :_)
I have read the article and made some conclusions. If something has been missed, please add more.
Pros of locks:
1. closing multiple positions simultaneously (assuming that opening a single position will be faster and more profitable than closing multiple positions consecutively).
2. Easy accounting of orders in Expert Advisors.
3. The psychological factor "temporary stopgap" (it is easier to open a lot than to close a losing position).
4. Possibility to hide the drawdown of the balance.
Disadvantages of losing lots:
1. Negative total swap and commission.
2. Psychological factor "self-deception" (it is easier to open a lot than to close a losing position).
3. The possibility to hide the drawdown of the balance.
I am against using locks within the same strategy. But I would be more comfortable if they remain (for quick closing of positions and for easy accounting of orders in EAs).
PS: Helen, kombat, you really haven't provided a single example (let alone proof) of the benefits of locs. And you pounced on timbo with so much vomit that it was sickening to read...
Do you want to demonstrate your (or someone else's) account where a lot of money has been made using locs? Show it! And I'll change his story so that there are no locks - and the result will be better on the swap difference.
You are defending the lock as a technical tool? You are welcome to do so. But listen to your opponent, timbo is not talking about technique, but about financial performance. And he is right.
A small addendum on lokas, there is a positive lokas and a negative lokas
1 - Negative-lock (when the loss is detected and the trader waits to see what to do)
2-positive-lock (example: eurusd sell 1.6000 buy 1.24000, price 1.4000 both orders breakeven)
positive locke has a certain feature.
i.e. it is opened by correction but the opposite position is not closed, hoping the mid-term correction will continue
and correction will not become a reversal
in this situation we are fully protected
in swing trading, we simply closed - and entered into the reverse and also breakeven.
but here it reverses and knocks back our order if we have not got it fixed - it will not happen with a profit at a break
and the mid-term continues and not a swing!
it turns out another tactic
1 in the first case, we decided to wait, but psychologically we have already almost accepted the loss of the amount within the location - a break
2 we have a fixed profit and we can go to sleep, therefore, we have a breather + peace of mind for the medium term
and we have protection and possibility to continue the medium-term
--
Positive equity has some advantage in this situation
It doesn't matter what you call it. What matters is whether it should be used or not.
I use the first 2 pros on my list myself, I consider the rest to be self-defeating. I never heard an argument.
Well Helen cited one that suits you and I'm in favour too. Locomotive protection against force majeure. From a sudden jump in price against a position, from a broken connection. I.e. pending order at a short distance will prevent from big losses.
it is taken on corrections but is not closed on the counter position in the hope that the medium term will continue
and the correction will not become a reversal
in this situation we are fully protected
in swing trading, we simply close - and go back and break-even.
but it will be a reversal and it wipes out our order if we have not got it fixed - it would not happen with a lot; with a lot only one profitable order is left
and the midterm goes on and the swing no longer does!
This is nonsense.
What protection? What kind of breakeven? What demolition order?
We buy, predict a pullback, actions:
- close buy;
- Open a sell.
We stand in the sell, we forecast the continuation of the main movement, actions:
- close the sell;
- open buy.
The difference in loco tactics is only in the actions, the meaning and result do not change.
Well Helen cited one suitable for you and I'm all for it too. Locomotive protection against force majeure. From a sudden jump in price against a position, from a broken connection. I.e. pending order on a short distance will protect from big losses.
A pending order at short distance is a SL. There is no point in opening in the opposite direction, the result will not change.
Are there any statistics? Or is it just a figure of speech?
This verbiage is backed up by the fact that the vast majority of managers trade on netoplatforms.
(For it's kinda cool, and sometimes it's just a habit of dilling...)
From this it is quite logical to conclude about the % ratio...