Precautions for transferring the stock market into the foreign exchange market

In recent years, due to the long-term downturn in the securities market, foreign exchange trading has attracted the attention of a large number of investors. However, due to the qualitative differences between the two markets, investors who transfer from the stock market often stay on a set of operating concepts of stocks, which is more likely to invite risks. Here are a few issues that investors should pay attention to when entering the foreign exchange market:

1) There is no trend concept

The securities market in our country only has a long-term mechanism, no short-term mechanism, and long-term investors in the stock market are often only used to doing long, and they don't know what to do about the falling market. New investors also lack the trend concept of foreign exchange, resulting in investors buying and selling based on feelings, lack of sufficient reasons before placing orders, and lack of overall perspective (except for short-term transactions).

2) Stop loss is not timely

Investors believe that the stock market risk is relatively small, and no matter how much it falls, they will not lose all their principal. It is a big taboo in foreign exchange to still have this kind of fluke when participating in foreign exchange transactions, while ignoring the leverage mechanism of trading margin, not strictly following their own instructions when there is a loss on the book, or simply not thinking about stopping losses!

3) Fear of winning money, courage to lose money

This is the most common mistake of newcomers to foreign exchange. When investors win profits, they are often afraid that they will spit back a little profit, so they rush to take profits. As a result, a large piece of fat will be lost later. When there is a loss, they always have the illusion that their stuck position can be recovered. The lucky ones may be able to survive, but the stuck market often indicates that the position has been in the wrong direction. If you don't strictly implement the stop loss, you may be doomed.

4) Frequently make subjective assumptions about tops and bottoms

When the stock price rises from 6 yuan to 20 yuan, it is generally judged that it is not easy to chase up, but when the European/American price rises from 1.4330 to 1.5000, the average person only draws from the analysis of the K-line chart that it is time to peak. In fact, the European/American price has risen to above 1.5000. Accurately judging the top and bottom is often not something that ordinary investors can do.

5) Lack of strict financial management

In the stock market, full positions are everywhere, but this move should be avoided in the foreign exchange market as much as possible. Fund management is the foundation of foreign exchange trading! For newcomers to the foreign exchange market, judging the rise and fall of the market should be placed second. Fund management reflects the rigor of investors' thinking and operation. The randomness of position size often leads to an imbalance in trading mentality, which is an important reason for foreign exchange trading failure.