In the transaction, we should be aware of the spread, the spread is floating, and sometimes several times higher than its normal level. The sharp increase in spreads often occurs when news events are released, which can have a big impact on our transactions. So, how can we avoid the attack of crazy spreads?
How to really avoid the loss caused by the spread of the spread? When the spread is amplified, the only way to protect yourself is to limit the leverage level (in my opinion, the leverage level should be less than 10 Double). We only suffer losses when we open or close a position when the spread is amplified. If we do not make adjustments to positions when the news is released, we will not be affected. The spread will soon return to normal levels, and we will continue the account operations we are going to perform.
The only possibility for a forced closing of the field is the Margin Call. But if we limit the level of leverage, we will reduce the possibility of being forced to close.
The so-called "lock"
The author has been helping traders around the world, which means that I have seen many kinds of trading methods, mixed. One of the most harmful methods is the "lock order." A lock order refers to doing more and shorting at the same time in the same currency pair. This method will not only pay higher transaction costs (double the spread), but also protect the account from the spread of spreads.
A lock trader locks a profit or loss by placing a reverse order, but if the spread is amplified, it will have a negative impact on both long and short orders. If the leverage is too large in such a transaction, a high spread may directly lead to a burst. What's more, your closing price is often calculated according to the highest spread, which is tantamount to worse.
Therefore, the lock order is not a good way to lock in profits or losses, closing the position is the king, the lock order will also be dangerous due to the spread of the spread, and even burst. In addition, we also need to control our leverage, less than 10 times.
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