How to make money in the foreign exchange market?

The reason why some people speculate in foreign exchange for several years, but still lose money, is because they still haven't found a way to make money. Is it so complicated to make money in the foreign exchange market, and you can't learn it in a few years. Then why are novices often able to make a fortune. In fact, the way to make money is enough to learn in a week. The key is that this method must be correct.

What is the correct way to speculate in foreign exchange? Then you have to ask people who can make money in the foreign exchange market. Note that you must listen to people who can make money. I think only people who make money are qualified to speak, and only what people who make money say is useful to you. 99% of those long speeches written in fancy words are useless to you, and only 1% are useful to you. Can you extract the 1% that is useful to you? If you can't, I still advise you not to look good.

People who can make money don't have the habit of writing exchange reviews, and people who can't make money like to talk. The crux of the problem is here, there are always very few things that are useful to us, and there are so many things that are not used to us, so what things are useful to us! I didn't know at first, otherwise I wouldn't have taken so many detours, it all depends on my own understanding. We need to read carefully what is useful to us, and double our collection of fine products.

There are many people on various foreign exchange forums who are selfless about their good things. I am very grateful. I have also learned a lot in it, and I am also obliged to write something for everyone to discuss. There are many people studying very hard, and I have also studied very hard, learning technical indicators, learning wave theory, and superstitious operation advice.

First, follow the trend

Following the trend is the most direct manifestation of the law of market movement, which is the trend. The only way to treat the trend correctly is to operate in accordance with the trend. This is the first magic weapon for making money and even long-term survival in a speculative market.

Stanley Crowe, a well-known investment expert in the United States, once said: "The most profitable and most reassuring operation is always when I follow the trend at the time. The operation that loses the most and feels the most pressure is always when I build or hold against the trend and lose money." When a novice learns to trade, it is necessary to understand that establishing the direction of price movement is of great value to the success or failure of the overall transaction.

Determine a good direction through objective analysis, then jump into the trend and stay in it, drifting with it. As long as the trend continues to favor you, you must hold your position tightly to sit on the profit. Learn to trade in the direction of the trend, and in the process of going up and down with the trend, through risk management, to achieve excellent operating results. This is the essence of homeopathy.

For beginners, the recommended analytical tool is the moving average. As a concise and clear trend indicator, the moving average has a good effect in following trends, which has won the favor of practical experts. For specific applications, please refer to the eight rules of Glamby moving averages and the triple filter investment theory.

Second, grasp the big and let go of the small

Beginners who have just started trading should pay attention to cultivating a systematic trading mindset at the beginning, not counting temporary gains and losses, but striving for long-term stable overall gains. To do this, you must learn to choose among many market opportunities, seize big opportunities and give up small opportunities. Therefore, the two core factors for evaluating opportunities, namely risk-reward ratio and success rate, must be firmly grasped, which is the second most powerful magic weapon for beginners to make money.

The so-called risk-reward ratio, which is the ratio of the latent risk loss of a trade to the expected return, is the risk-reward ratio. For example, we plan to execute a trade. After analysis, if our estimated potential loss value is 100 points and the profit target is 300 points, then the risk-reward ratio of this trade. The so-called success rate is the probability of a successful profit. For example, in 10 trades, if you make 5 profits, the success rate is 50%.

Suppose our risk-reward ratio is 100 points: 300 points, and the success rate is 70%. This means that when we make 10 trades, each time we make a profit of 300 points and lose 100 points, the overall profit will be 300x7-100x3 = 1800 points.

Suppose our risk-reward ratio is 300 points: 100 points, the success rate is 90%, each time we lose 300 points, and each time we make a profit of 100 points, then in 10 trades, the overall profit will be 100x9-300x1 = 600 points.

Considering these two core factors, a transaction with a smaller risk-reward ratio and a higher success rate is what we should strive for.