Practical advice for beginners in foreign exchange on how to reduce foreign exchange speculation mistakes

existforeign exchange marketThere are no eternal winners and no eternal losers, but only those who win more and lose less can win the title of "winner" in this field. So how can we win more and lose less? Small failures and small setbacks in the process of foreign exchange speculation are inevitable, just like no one is perfect, no one can never make mistakes. The root cause of these small setbacks and small failures often stems from various large and small mistakes, so the more mistakes avoided, the closer to the title of "winner". InZehuiWhen trading on the platform, many beginners also focus on how to reduce such mistakes. Here are six tips on how to avoid foreign exchange mistakes:

(1) Assuming that you are trading in the same direction as the market trend, take a position on the basis of past or subordinate trends that have produced large spreads, or take a position in a moderately retrograde position to the current market trend; in this regard, it is important to note that if you misread or ignore the current market trend, buy in spite of an incurable bear market, or sell in spite of a strong bull market, you are likely to suffer losses and feel stupid at the same time.

(2) Only participate in those markets where the market trend is strong, or the main trend of the foreign exchange market is forming. Recognize the current main trend of each market and hold only positions that conform to this main trend direction, or choose not to participate.

(3) Once your position moves in your favor, and your technical analysis confirms this favorable trend movement, you can increase your position under certain conditions (pyramid method). However, care should be taken to avoid blind increases when trading.

(4) Your market-following position can make a very favorable move, so you should hold on to that position. Since there is a favorable move in the market-following position, you should tolerate any minor trend movement and do not trade it frequently or try to profit quickly from counter-trend trades.

(5) Unless trend analysis indicates that the market has reversed and your order has been intercepted, you should retain your position. At that point, if you are very attentive to the market, you should hedge your original position against the latest trend. However, if you have hedged your position, subsequent market behavior indicates that the main trend is still in place, and your hedging is premature, you should completely re-establish your position in line with the main trend. But do so carefully and objectively.

(6) What if the market moves in the opposite direction to your expectations? First, how can you know that the position is being held incorrectly? If you can't figure it out, then the daily equity position can "tell" you in some unspecified way. Following the thumb rule, the margin ratio for investing in stock trading should not exceed 40%, and for futures trading should not exceed 70%. When using instruments such as Zehui, it is also necessary to pay attention to the reasonable control of the margin ratio.

Finally, it should be emphasized that while the most important factor for success in foreign exchange speculation is a consistent and workable strategy, three additional important elements are required: constraints, constraints, and constraints.