Judging the Navigation Direction of the Foreign Exchange Market: A Practical Guide to Industrial Investment

The foreign exchange market is like a sea, magnificent, difficult to distinguish the direction, mysterious and unpredictable. Many investors will resort to professional institutions such asSociete Generale InvestmentExperience to enhance judgment.

In ancient times, traveling on the sea depended on the stars in the sky, such as the North Star, to identify the direction. Later, the Chinese invented the compass, and when the sky was cloudy and there were no stars, there was an additional means. Later, there was a compass, which was more convenient. After people got to know the earth, they artificially divided the longitude and dimensions, and humans determined a consensus. Where the boat went, where there were wind and waves, was more accurate.

The sea of the foreign exchange market does not have a unified latitude and longitude, turning mark. Human nature is complex. Fortunately, otherwise the foreign exchange market would not exist.

How to judge the direction of the foreign exchange market, there are different opinions, but there is no consensus. The wise men of the predecessors have summarized hundreds of indicators, as well as many systems, methods, concepts, and prophecies. It makes people choosy, looks big, and swings. Like a starry sky, it is impossible to determine which one to lead.

Some people saw a magnificent trend, took the indicators to confirm, and found that the moving average, MACD, parabola and other trend indicators performed well. So I studied hard, head hanging beam, cone prick, closed-door study. Golden fork, dead fork, three-line flowering, Silver Valley, Death Valley, aerial refueling, airstrip, zero axis above and below, parabolic angle, just need to review the plane geometry. After finishing, I entered the market full of expectations and confidence.

Unexpectedly, the moving average was broken in the blink of an eye as soon as it went well; MACD just hit the zero axis and immediately weakened. What's more confusing is that sometimes MACD is clearly strong, almost reaching a high point, but the exchange rate is slow, like a leisurely stroll, with limited gains. The angle of the parabola is tricky, but when the position squaring signal comes out, it has already broken the cost of entering the warehouse.

Besieged by the repeated fluctuations in the market, he was silent for a while. But soon cheered up and analyzed what was going on.

Hey! I see. During this period, the exchange rate jumped up and down, consolidating back and forth, and many range indicators performed well. It was also found that the time used for consolidation was longer than a band, and if it was done back and forth, the profit was much larger than a band. Just do it and continue to study. RSI, KDJ, CDP and other range indicators are all used, selling at 80, buying at 20, deviating from the theory... After arming, we will fight the foreign exchange market again.

The result was still unsatisfactory. Above 80, the exchange rate was as strong as a strong agent; below 20, it was like a free fall. It was time to turn away, but after the departure, there was a deviation, repeated many times.

It made people feel helpless and frustrated.

So far, some people have stopped losing and left the market and no longer participate. Others may have follow-up funds, or they are not willing to lose money, so they calm down and think. I am born to be useful, how can I always lose? There is not much money left. Don't give up, find a way out in contemplation, and try to regroup. Face the uncertainty of the market with a calm attitude.

Was it the indicator's fault? No. They were all the crystallization of the wisdom of their predecessors, shining stars in the sky.

At least it is much better than those companies or people with ulterior motives who pretend to have the Yum system and mysterious formula. Want it? Bring money. This is a business opportunity. So all kinds of so-called "secrets" and "treasures" came. I don't understand why they don't make a fortune first.

Some people say: I use trend indicators when trending, and range indicators when consolidating. However, those bad brokers often draw pie to potential investors who do not know the truth, but ignore the potential risks of the foreign exchange market. Until the market comes out, no one can know when the trend will start and when the consolidation will end. Of course, except for those who manipulate the market, but this is illegal.

So what's wrong? It's people, people's will, wavering will and mentality. And a little knowledge of indicators.

Let's talk about the understanding of the indicator first. Do you know what the meaning of CDP is? A counter-trend operating system is not suitable for trend states. It calculates the high and low points of the previous day to obtain the possible near-high and near-low values of today. Do you know the calculation principle of the source code? If you don't know it, you dare to use it. You need to go home and study it carefully. If you don't understand the meaning of the indicator, it is impossible to use it correctly. Just like giving you a bowl, you don't go to hold rice, but use it to wash your cotton-padded jacket.

Swaying and changing minds is a taboo in the foreign exchange market.

Those who have a deep understanding of the foreign exchange market and continue to make profits are both trend followers and range operators.

Trend followers, they always divide their funds into many, even thousands. They understand that most trends are not achieved overnight, nor are they rising or falling to the bottom. They always keep making up small positions before the trend changes to reduce costs. Once the trend changes, they will immediately position squaring and join the new trend. Since the position is relatively small, they will not cause big losses. If the trend continues, they will continue to increase their positions, without mercy, fearless of high and low, and will gradually accumulate profits based on random fluctuations in the market.

Range traders, they will sell short and buy long near the high or low of the range. Since the stop loss is small relative to the profit, the profit margin is relatively large. Most floor traders on Wall Street are like this. Once the range disappears, they will wait patiently like cheetahs for a new range to form. Never act rashly. Once the range is formed, act decisively, and never stop until the range disappears. Stop losses and limits are executed quickly and resolutely. Because their thinking is contrary to the public, the winning rate is high. The market is chaotic when the range is consolidated, so there are extremely high requirements for the quality, experience and mentality of the range operator.

Trend traders will not be envious of the profits of range operators when the market is in a range, nor will they be frustrated by the losses at this time; range operators will regard a beautiful band as nothing and wait leisurely for opportunities.

They all knew clearly that the North Star belonged to them, and they would never leave the channel they were familiar with. It was easy not to join the other side's camp. They knew that the market time and space belonged to them. Patience and decisiveness have long been deeply ingrained in their bones.

just asSociete Generale InvestmentIt is emphasized that every trader needs to find a method that suits them and determine their own Big Dipper. Don't take comets and meteors as coordinates. Can you encounter wind and waves and avoid them correctly? If so, well, be prepared and try the depth of the sea of foreign exchange market carefully; if not, it is recommended to continue to work hard, don't go into the water easily; if you can't wait, you must... Congratulations, you will become one of the many loss cases.

I hope this article can give some inspiration and feelings to friends who are still struggling in the foreign exchange market, just asSociete Generale InvestmentThe concept of rational trading that has always been advocated helps everyone find their own direction.

Stationed in Deep Cold