The benefits and harms of locks in forex trading
A lock (locking) is two open trades in equal volumes, in opposite directions (long and short trades), on the same trading instrument.
For example, you work with the EUR/USD pair. You have an open trade to buy. At some point you decided that the wrong direction, you do not want to close the deal with a loss, in the hope that it will close with a profit, but later, and not to increase the losses and thus earn, you have opened a sell trade with the same volume. This means you are "in the lock".
Traders get into a lock for several reasons. We have already considered one of them. The second reason is when inexperienced traders think that they will inevitably make profit by entering the market with a small take profit. And also traders enter a lock when there is a risk of losing the whole deposit.
The usefulness of the forex locking strategy is that with it, you can actually stop the growth of losses and earn profits at the same time. Locking a position is easy to use during a sideways trend by setting a "take profit" level. In this case, you need to keep the market under control.
If you are tired of being in the market, while your trades have not closed, you can, while being in a lock, simply do not set Take Profit, or Stop Loss, and allow yourself a rest. True, in this case your deposit will inevitably decrease in the amount of a swap (payment for carrying over the transaction to the next day). But nowadays it is possible not to pay the swap fee.
The harm of swap is that it dulls vigilance. Like a spider in a network, it draws the trader into opening new trades without waiting for the previous ones to close, thus encouraging financial discipline violation, inflaming the excitement and leading to uncontrolled situation.
By the way, many brokers encourage opening locks with certain incentives. Entering a lock is easy. But getting out of the lock is problematic, especially if you have entered the lock with a large gap. Competent exit from the lock is equivalent to competent entry into the market. Despite this, this technique is widely discussed in forex trading for beginners. Beginners like the ease and illusion of saving the deposit.
A lock that appears to be a lifeline can often turn out to be a boulder dragging you to the bottom. It is often easier to get a stop, pause in trading and start trading again than to get tangled up in lots.