How to Close Positions in Online Forex Trading

Closing a position is a very important part of online Forex trading. Today I will talk to you about how to close a position in online Forex.

The basic principles of closing positions include: limiting losses; rolling profits. This is the basic principle that investors should adhere to when closing positions. This principle requires investors to hedge immediately and leave the market when a loss occurs in a transaction and the loss has reached a predetermined amount; when the market changes favorably, there is no need to rush to close the position to make a profit, but should try to extend the time of holding the position to fully obtain the profits generated by the favorable changes in the market. Adhering to this principle reflects in practice the setting and implementation of take-profit and stop-loss.

During the investment process of domestic gold futures, the principles of limiting losses and rolling profits must be observed, and attention must be paid to the risks of overnight positions. Due to the linkage between domestic and foreign gold markets, the domestic gold futures market is highly volatile and the risk of overnight positions increases. Therefore, in the process of investing in domestic gold futures, the principles of limiting losses and rolling profits should be flexibly applied.

The choice of closing time

Based on the past experience of the futures market and the characteristics of gold futures themselves, the following points should be paid attention to when choosing the timing of closing gold futures positions:

1. When the futures price reaches the set stop loss level, the position must be closed. The purpose of setting a stop loss position is to control the loss within the range that one can bear, "keeping the green hills alive, and not afraid of running out of firewood." Closing the position at the stop loss position can avoid greater losses. It is also an important manifestation of the implementation of investment discipline and can ensure that the trading plan is effectively implemented under the premise of correct decision-making.

2. When the take-profit target is reached, it is best to close the position on the same day to reduce the risk of holding the position overnight. This is based on the linkage of domestic and foreign gold markets and the greater volatility of my country's gold futures.

3. When you find that the reason for opening a position is not valid, you should resolutely close the position. Investors have their own reasons for opening a position, such as opening a position because of certain news or based on the logic of their own analysis. However, once it is discovered that the reason for opening a position is not valid and at the same time there is no other sufficient reason to continue to hold it, then the investor's behavior of opening the position itself is unreasonable, and the position should be closed in this case.

4. Positions must be closed as soon as possible when switching between contract months. First of all, the minimum margin for domestic gold futures contracts is 7%, but since the tenth trading margin before the delivery month has been increased to 10%, as the contract delivery date approaches, the margin ratio for gold futures ranges from 10% to 40%; secondly, the gold futures delivery rules stipulate that positions held by natural person customers are not allowed to enter the delivery month. Finally, before the close of the last trading day of the first month before the delivery month, the gold futures contract positions of natural person customers should be adjusted to 0 lots, otherwise the positions will be forced to be liquidated by the exchange. These regulations require investors to move positions between months in a timely manner. Open positions must be deployed two months before the delivery month to seize the opportunity and try to close positions 10 days before entering the delivery month to avoid risks caused by concentrated liquidation in the market.