In order to survive in this market for a long time, we first need to consider not how to make money, but how to lose money. When you can control your losses reasonably, scientifically, and effectively, then making money will come naturally. Share my experience here, and hope to learn and cooperate together.
Why do 95% of people lose money in the foreign exchange market? According to my experience, they just didn’t find a path that suits them.
Forex trading is like being in the desert, with directions everywhere and nowhere to go. Just like a fly lying on a glass window, it seems that the future is bright, but in fact there is nowhere to go, and it is beaten to the blood. From hope to disappointment, to confusion, all we do is to keep exploring to find ourselves. Way out.
The difference between subjective trading and quantitative trading
To profit in the foreign exchange market, first determine the direction. There are two general directions for trading, subjective trading and quantitative trading.
First of all you have to understand which direction you are heading in. Don’t think that only computer trading is considered quantitative trading, not so. Many of our retail investors learn from the Internet for high probability, profit-loss ratio, capital management, etc., all of which are the content of quantitative trading, to be precise, it is a mixture of quantitative trading and subjective trading. And subjective trading and quantitative trading are opposite in some places, which causes you to go east for a while and west for a while. The direction is confused, when will you reach the destination.
For foreign exchange to profit, it needs to be controlled from five aspects: fund management, technical analysis, profit-loss ratio, winning rate, and mentality. Among them, fund management is the key to success.
But if you understand this, you can only say that you are getting started and understand how to make money. But there is still a long way to go. But you must understand that if you cannot replace manual trading with computers, you will basically fall into a mixed situation of subjective trading and quantitative trading. Manual traders must distinguish whether they are quantitative trading or subjective trading.
For foreign exchange to profit, it needs to be controlled from five aspects: fund management, technical analysis, profit-loss ratio, winning rate, and mentality
We put aside the quantitative trading of computers, and only talk about the manual quantitative and subjective transactions that retail investors have to face. Because this is the key to whether we can jump out of the quagmire and achieve stable profits.
Subjective transactions and quantitative transactions must be subject to quantitative statistics, and statistics such as winning percentages can be calculated. But there is still a big difference between subjective trading and quantitative trading. Quantitative trading wins with probability, which requires a certain number of transactions to reflect the advantage of probability (some people say it is frequency). If you can trade 100-1000 times a year and strictly abide by your trading system, then this is considered quantitative trading. But this is not the case with the ultimate subjective transaction. If they don’t, they will win with one blow and seal the throat with one sword. When a quantitative trader is faced with a possible trading opportunity, he will hesitate and be uncertain in his mind. Anyway, just follow the trading system. Traders who achieve the ultimate in subjective trading are full of confidence. When they place an order, they are sure and affirmative. They are super confident and have no doubts. This is the subtlety of subjective trading and quantitative trading. For the ultimate subjective trader, the number of transactions in a year is very limited. There may be only a few transactions, but one grasp is enough to double the account.
Quantitative trading must reach a certain trading volume in order to reflect the advantages of quantitative trading. This is the fundamental reason why many people cannot make profits. Many traders have not conducted historical backtests of their trading methods at all, have not conducted quantitative statistics, and do not know Profit and loss ratio, do not know the probability of winning. When they place an order, they are uncertain in their hearts and rely on luck. Even if some people make quantitative statistics on their transactions, a series of losses often cause chaos and it is difficult to continue. Basically, under the banner of quantitative trading, you are doing subjective trading. Because your emotions are difficult to control, you can’t help but hold heavy positions, and you always think about retaliatory trading after losing money.
Subjective traders should find trading opportunities with absolute certainty when placing orders. Quantitative traders are often ambiguous when placing orders.
The problem faced by subjective traders who want to be the ultimate is that they must use historical experience to find their most confident trading opportunities, a chance to seal their throats. And it takes a lot of patience to wait until trading opportunities arise.
The difficulty faced by quantitative traders is that they must pass strict capital management, a large number of transaction orders reflect the advantage of probability, control the good profit and loss ratio, and achieve emotional trading.
Whether it is subjective trading or quantitative trading can achieve profitability, the key is to see which one is right for you. You can clean up your trading ideas, see which trading opportunities you are super confident, and incorporate them into your subjective trading system. Which trading methods require a large number of trading orders to reflect the probabilistic advantage and incorporate them into your quantitative trading system. If you can’t do quantitative trading at all, it is better to try the ultimate subjective trading method. Perform quantitative trading manually, and you will be deeply confused when you encounter consecutive losing orders. If your heart is not strong enough, it is better to try the ultimate subjective trading method I said.
Repeatedly toss, it is better to sit still, if you do not come out, you will win with one blow. This is how subjective trading works. If you do a good job in subjective trading, you will win over quantitative trading.
Four points of experience sharing:
- Don’t be afraid of making mistakes, but for fear of procrastination. It is inevitable to identify errors in the foreign exchange market of investment projects. After the new homes are locked up for the purchase of loans, there is no need to be anxious at the beginning, and carefully consider whether the exchange rate you bought belongs to the historical high level, the middle level, or the bottom region. When you find that the exchange rate you bought has been rising for a long period of time, you should first make a decisive claim and sell to reduce your loss. That way, it can not only reduce the harm in its future market trends, but also adjust its mentality and property, and then take the initiative. Sales in the foreign exchange speculative market are not afraid of doing something wrong, for fear of knowing that they have done something wrong and will not admit their mistakes, delaying the fluke and waiting for the exchange rate to warm up. As a result, the exchange rate has fallen and the loss is getting bigger and bigger.
- In the operation process, many Huimin friends have mastered the need to decisively admit compensation and leave the market at a high position to avoid the greater downside hazards, but how to set a stop loss level? For the establishment of the stop loss level, there are several positions that should be referred to most: the exchange rate fell below the 5-day moving average; the exchange rate fell below the lower limit of the initial finishing service platform and fell; the exchange rate fell below the bottom of the triangle caused by the initial fluctuations and convergence Tumble down and break. The stop loss level can be built in the position where the five-day moving average system software belongs, or the position where the finishing service platform and the bottom of the triangle belong.
Setting a stop loss level is indeed a difficult professional difficulty. Generally, industrial equipment can also formulate its own European compensation. If it is formulated to fall by 30 or 50 points, it will decisively close the position and leave the market. If you want to survive in the foreign exchange market for a long time, you should try your best to stop loss immediately and turn long-term pain into short-term pain. The long-term precipitation of property will definitely hurt the appreciation of property. Especially in the situation of buying at a relatively high position, it is necessary to set up a stock stop loss. Once the identification is wrong, try to stop the loss as soon as possible. It is the most effective way to deal with the high position.
- After stopping the loss of high stocks and selling the loan currency, you should wait patiently. Since selling at a high level, the exchange rate also has a period of decline in interior space design and time. At this moment, investors should refrain from their upset and irritable mentality of “earning enough costs” and patiently wait for the best time for the next new house opening. In fact, after selling the loan currency at a high position, the more the currency falls, the more beneficial it is for investors who throw out the currency. When the decline was quite large, at this moment, he bought the loan again with the property that was withdrawn from the previous claim. Because the exchange rate is relatively low, you can buy a lot of quantities. Once the currency rises slightly, you can quickly make up for the original loss. If the currency grows significantly and rapidly, it will naturally turn defeat into victory.
- High stop loss is of course an effective way to avoid greater harm. In addition, it is also a very good way to ensure quick settlement based on cross-marketing and marketing. Experienced discrimination, under the circumstances that the market trend permits, the quilt currency is cross-traded and cross-purchasing the currency with very good market conditions to ensure that the weak is exchanged for the strong. If the powerful currency grows rapidly, it can be solved, and it may even be profitable. Investors do not necessarily force liquidation back to the US dollar based on cross trading, which saves a lot of transaction fees. After all, the macd deviation of real trading is still very large. According to the cross trading, in fact, it is done by converting two transactions into one transaction, which of course will save transaction fees. When you are covered again in the future, you can first see if there are any good crosses that can be done. If there is no experience analysis, then fully consider decisive stop loss.