The technique and countermeasure of the stop loss of the speculation foreign exchange.

How to set a stop loss is a problem we encounter every day in foreign exchange speculation, but in many cases, there are often sudden fluctuations in the opposite direction before the market starts, breaking through important trend lines or highs and lows. This is where most people stop losses. After sweeping away, they continue to run in the original direction. Many people make mistakes at this stage, and those who break through the stop loss are even more likely to suffer heavy losses.

When does this usually happen?

Why is there a stop loss action?

A sword answer:Zhonghui

The stop loss action has the following reasons:

1, the action of the opening position; the main force does not want to have a lower position than its opening position, the less the better, to reduce the cost for the future pull up, eliminate the resistance and the profit position squaring of the mechanism with a lower position than our opening position.

2. Forcing the damaged institutions or individuals to enter the market at a higher position than the main warehouse area, which invisibly plays the role of lifting the sedan chair for the main force, reducing the cost of pulling up and the risk of participating alone.

3. A means of making huge profits. In the accumulation of positions in the price, the most positions are stacked at important positions (or important support and resistance levels), and the main force uses eating them as a way to gain profits. Forcing the losers to intervene at a higher position is also the reason why the market can get out of a large part after sweeping losses.

4. When there is no obvious trend, institutions profit by sweeping losses up and down. This was obvious in the past when it was not a farm.

5. The means of shipment. The order is not enough, so we have to eat important resistance levels to lure more orders to follow the trend.