What is forex open positions ratio?
The forex open position ratio is something which is held by a trader in respect of all major currency pairs. This open position trading is quite popular in forex trading business where both long and short positions trading are used. However, the value of currency exchange never remains static, and it is updated over a course of time.
What is the significance of open position ratios forex?
Open positions ratios forex are offered trading platforms, and the ratios are determined based on the positions of the traders operating in the trading platform. This indicates the ratio is the only indicators appear in the market of forex irrespective of all major currency pairs.
Most of the investment banks do not use the retail trading platform, but they choose to trade for long positions. However, the retail traders who are keen to practice trading in the retail market must be aware of the proper use of open positions trading in the forex market.
While a trader chooses to trade with forex open positions ratio, he should be aware of the fact that forex open position ratios do not show the percentage of short or long position trading in respect of major currencies. To define this in simple terms, let’s cite an example here, suppose you open a trade at a currency pair of 25:8. This percentage will remain the same for all open position major currency pairs.
What are the basic things need to keep in mind for open position trade?
For opening a trading position, one must keep the following points in mind
Symbol: A trader needs to choose a security symbol for opening a trade
Stop loss: Do not use stop loss order frequently, rather place it optionally
Volume: While opening an open position trade, the trader must specify the trading volume or lots
Take profit: A trader must select a take profit level while opening a position
Three things a trader must follow for maintaining an open position ratios forex
For maintaining an open position trading, a trader must focus on three important things such as
Always stay in touch with the market
Whether you are an expert trader or just a beginner, you cannot deny the significance of economic news that highly influences price action trading. Therefore, it is highly important that the trader must always keep himself updated with trading news as the value of currency exchange may fluctuate at any time posing a great risk for open position traders.
Try to be flexible with various trading plans
If you have done a course on forex trading, you must be aware of the fact that how important it is to be flexible with various trading plans. However, flexibility does not mean spontaneous or not following your previous or initial plan. It means you need to adjust sometimes with your trading plan in order to maximize profit.
Always update your position size and order
Just because you have the right trading plan does not mean you will not change your trading position or order. In order to minimize the risks of trading, you need to adjust your trading positions from time to time.
Keeping all these factors in mind, you can certainly start with forex open positions ratio. Don’t waste your time on making full-proof trading plans as you may have to adopt other flexible options to minimize the level of risk. Once you start with these practices, you can certainly develop them into good habits.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.