What is a Close Out?

Closing a position is a term derived from commodity futures trading, which refers to the trading behavior of a party that trades in futures to offset a previously purchased or sold futures contract. Closing a position is a collective term for the behavior of a bull in selling stocks bought or selling back the stocks sold in a stock transaction. ^[1]

Close a position

For example, an investor opened a position on December 15 and bought January.

Liquidation can be divided into hedged liquidation and forced liquidation.

Hedging liquidation is a futures investment company that sells futures contracts of the same delivery month by buying in the same futures exchange to close previously sold or bought futures contracts. The so-called forced liquidation means that a third party other than the holder of the position (futures exchange or futures brokerage company, such as FXCM Global Gold Exchange Trading Platform) forcibly closed the position of the holder of the position. Cut positions.

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1. Stop Loss Closing: When there is a certain profit, the stop loss protection cost is raised, and then as the market develops, the stop loss is raised according to the technical graphics until the stop loss is eliminated. This method applies to unilateral quotes.

2. Close-out: The price is closed when it is observed that the price is unable to reach a new high and there are signs of decline. This liquidation method is an improved and upgraded version of the stop loss liquidation method, which can maximize the grasp of due profits.

3. Closing with resistance: When the price reaches or is about to reach the next resistance level, the position is closed without waiting for the impact result. This method is suitable for oscillating prices or rebounding. When it comes to one side, most of the support is invalid, and it will miss a lot of profits.

4. Target Closing: Treat each order as a bet with high odds. Set the order with stop loss and take profit at the same time, the take profit target is at least three times the stop loss, and at the same time adjust the open position according to the fixed loss amount. When holding a certain profit, the stop loss protection cost is raised. Assuming a profit-loss ratio of 3: 1 (this is the minimum), the order success rate can reach the break-even point as long as it reaches 25%. Assuming a success rate of 7: 3, the overall wind-reporting ratio of the system is (7 * 3): (3 * 1), which is 7: 1. This method is also most suitable for shock markets.