1、 Homeopathy
The trend is our friend. Once the rising or falling trend of foreign exchange is formed, it will run stably, which can help us follow the trend and make profits from investment. But at the same time, we should also keep in mind that the longer the trend runs, the closer it will be before the trend is broken.
In the actual foreign exchange transactions, people often only pay one-sided attention to the level of the exchange rate itself and ignore whether the exchange rate tends to rise or fall in the future, forgetting the classic maxim "follow the trend". In fact, this upward or downward trend has greater and more important significance for investors' profits and the amount of profits. An important skill in foreign exchange trading is to focus on potential rather than price. The so-called "heavy trend without heavy price" means that in a wave of obvious upward trend, you should dare to buy at any point. As long as you don't buy at the top, you can make money. Therefore, once you are optimistic about the trend, you don't have to worry too much about the exchange rate. If you care too much about the price, you will easily fall into the trap of "going against the trend". Because in a big bull market, if you have to wait until the low price to enter, it is often when the general trend reverses and falls.
However, this opportunity is usually a big technical profit taking, or the fundamentals have fundamentally reversed, and the bull market has turned to a bear market. At this time, how can we buy on bargain hunting? Once you buy it, nine times out of ten it will be covered. On the contrary, in a wave of obvious downward trend, if you must insist on a higher rebound before short selling, you may never have a chance. A bear market tends to fall faster than a bull market, and it will never turn back. Therefore, we should first find out the characteristics of the trend of the foreign exchange market, especially the behavioral characteristics of the price trend in a specific time. A great advantage of studying the behavioral characteristics of price trends is that price trends faithfully record the role of unpredictable market expectations. Although studying the past does not mean that we can accurately predict future prices, as long as we understand the characteristics of market price trends and do not force us to predict the future, as long as we can respond to the characteristics of similar market trends when they occur.
2、 Light warehouse
The essence of foreign exchange investment is risk control and fund management. Investors should have a plan for the use of funds. One of the principles is to lighten positions and keep more than 2-3 times of funds at any time to cope with price fluctuations. Only by controlling the position can we grasp more opportunities. We can often see this phenomenon. Sometimes there are good opportunities in the market, but investors have no ability to capture such opportunities because of their heavy or even full positions.
For example, if you have 100000 yuan invested in the foreign exchange market once, you will only have one trading opportunity; If it is divided into two 50000 yuan to enter the market, there will be two trading opportunities; If only 25000 yuan is invested each time, there will be four trading opportunities. Therefore, controlling positions is tantamount to giving yourself more choices, which will undoubtedly greatly improve the safety factor of investment. In the final analysis, controlling positions is a means of risk control, because we can not accurately predict the future trend at any time. Turning the "big force" into a "small team" to control the rhythm of attack can undoubtedly make us comfortable in the investment market.
It is an ideal fund management method to operate light positions, increase the weight according to the trend, and increase the weight in a pyramid way. The so-called "pyramid" overweight means that after buying a currency for the first time, the exchange rate of that currency rises. Seeing that the investment is correct, if you want to overweight and increase investment, you should follow the principle of "the number of overweight each time is less than that last time". In this way, the number of incremental yards will be less and less, just like the "pyramid". Don't add weight when you lose money. After buying or selling a currency, when the market suddenly moves in a reverse direction, some people will increase their stakes and do it again. This is very dangerous. If the exchange rate rises for a period of time, what you buy may be a "top"; It would be a vicious loss if the exchange rate did not turn back after falling and buying more and more.
3、 Stop loss
Stop loss points are set to preserve strength. In foreign exchange trading, mistakes in investment decisions are often inevitable. If you do not correct this mistake in time, you will encounter fatal danger. Therefore, stop loss is a very important rule. The greatest advantage of stop loss is that it can limit the loss to a certain limit, exchange a small loss for the safety of more funds, and effectively preserve the financial strength for future wars. Soros, the world investment master, said that investment itself has no risk, and only uncontrolled investment has risk.
As investors, we are facing a huge capital market that will not be transferred by our will. The surging of the foreign exchange market not only has huge profit potential, but also has the risk of losing your money. What needs to be clear is that there will always be opportunities in this market, but once you lose your money, you will lose the ability to look for opportunities again. Therefore, in order to avoid risks, it is not only necessary but also very important to set stop losses.
The following factors shall be paid attention to when setting the stop loss price:
First, we should focus on the general trend and look for the previous major points or new highs (new lows) in the technical graphics, or the prices that the market has proved difficult to break more than once;
Second, the main analysis price of technical analysis;
Third, the price that the government or central bank officials have emphasized;
Fourth, the most important point is to constantly summarize and accumulate from the daily operation, and the key is to find a stop loss method suitable for your own situation.
4、 Stop surplus
If the purpose of setting stop loss is to save strength, then the purpose of setting stop win is to keep profits. No matter investors or speculators, only by learning how to protect their profits, can they easily gallop in the foreign exchange market.
When the currency you buy is appreciating, you often hesitate about when you can make the most profit by selling it. There are many possibilities here. If you have set a profit target before entering the transaction, such as preparing to make a profit of 200 points, once you reach this price, you can stop winning immediately and lock in the profit. Another possibility is that the trader keeps increasing the profits until there is a sign that some price change is changing to lose money. In this case, the stop win may be determined as selling at the stop loss point of the stage high, or selling when the technical index gives a sell signal; Act in the same way as the first case occurs. No matter what kind of profit plan is used, the most important thing is that traders must realize that the ultimate goal of trading is to make profits. When setting up the winning stop, we can start from these four aspects: first, set the winning stop position with the price; second, the winning stop method with the increase; third, stop winning according to the technical indicators; fourth, stop winning in the chip area. Stop winning in time in the early high price area, transaction intensive area and other important chip areas.
Money is easy to make but hard to keep. For this kind of psychology, we should still remember the risk, and never forget the risk because of the pursuit of maximum profit. The high profits of the capital market should come from the long-term accumulation of sustainable profits under low risks. The experts only pursue the most reliable, and only the low hands only focus on profit maximization and are satisfied with the short-term glory. Those who can buy are apprentices and those who can sell are masters. Only by successfully selling can profits be realized.
5、 Discipline
The essence of trading behavior is a confrontation between human nature and mentality. After careful study, the vast majority of trading problems in the market originate from the body and mind. The greed, fear, hesitation, decisiveness, courage, prudence, conformity, etc. of people's character are exposed in the market transactions. To a certain extent, profit is a reward for your personality advantages in the trading process, and loss is a punishment for your personality shortcomings in the trading process. Technically, I am eager to learn, but psychologically, I am sad. Between the market and people, the real difficulty is always people. Trading begins with mind cultivation, followed by ideas, strategies and skills. In a certain sense, the market itself is risk-free. The market is like a river. The risk lies in you who cross the river. The risk is up to me. Therefore, we should firmly establish the concept of the supremacy of discipline in foreign exchange trading, learn to "cultivate the mind" and "strict laws", and overcome the weakness of human nature. Many people often do the opposite. Stories are twice as effective as stories.
As a trader, you need to understand the market, understand yourself, and understand the weaknesses of your personality, which is the prerequisite for investors to gallop the battlefield and accumulate wealth. First, look for weaknesses in your own human nature. For most people, it is more important and difficult to understand themselves than the market. Second, among the weaknesses of human nature, we can not simply explain them with right and wrong. Many of them are born, because people's thinking has limitations, or even defects, which leads to our very easy to make mistakes. How to overcome the weakness of human nature and overcome self is the problem to be solved. In fact, the answer is very simple, that is, rules. Just act according to the rules, and your transactions must also have rules.
