Foreign exchange is a popular item in financial investment. However, it is an economic project, and there will be certain risks, but why do people still permanently lose money in the foreign exchange market? This is because we have not fully mastered foreign exchange trading skills. Today, we will discuss with you three profit-making strategies for foreign exchange trading:

Follow the trend

Following the trend is the most direct manifestation of the law of market movement, that is, the trend. The only way to treat the direction correctly is to follow the trend and act on it. This is the first magic weapon to make money or even survive in the speculative market for a long time.

Stanley Crowe, a well-known American investment expert, once said: "At that time, the most profitable business always followed the trend. The worst losses and the most stressful operations were always when I established or maintained a position opposite the movement. When novices learn to trade, they need to know the direction of price operation, which is of great value to the success or failure of the entire transaction. Determine the direction through objective analysis, then jump into the trend, and have been in the movement, drift with it; as long as the trend continues to be beneficial to ourselves, we must hold a profitable position. Learn to follow the trend of the transaction direction and use risk management to achieve outstanding operational results in the process. This is the essence of conforming to the movement.
For novices, the recommended analysis tool is moving average. As a simple and clear trend indicator, moving average significantly influences tracking trends, so it has won the favor of actual combat experts. For specific applications, please refer to the eight rules of the standard and the investment principle of the triple filter.

Focus on big and not small

Let's take an example:
Assuming our risk-return ratio is 100 points: 300 points and the success rate is 70%. This means that when we make ten trades, each profit is 300 points, and each loss is 100 points, then the total gain will be 300x7 -100x3 = 1800 points.
Assuming our risk-reward ratio is 300 points: 100 points, the success rate is 90%, each loss is 300 points, and each profit is 100 points. Then in 10 transactions, the overall profit will be 100x9-300x1 = 600 points.
Taking these two core factors into consideration, the smaller the risk-return ratio we should strive for and the higher the success rate of the transaction.

Limit loss

Limit losses and keep the principal. Under this premise, keep as many potentially profitable positions as possible to increase profits. This is the third magic weapon for speculating and making money.
Risk is closely related to the trader, so novices should have a clear understanding of risk. After setting the stop loss, the trader will have a precise and quantitative knowledge of the lower limit of the failure, which is conducive to maintaining stable trading psychology.
While limiting losses, we must learn to hold for a long time to make up for losses caused by mistakes. Only long-term holding can make a lot of money. Only by making a lot of money can you make up for the losses caused by many errors and maintain a balance. These balances are part of the final trading profit.
Investors who cannot stop losses must lose money, and investors who can only stop losses must lose money. In the long run, only investors who can stop losses and make money can taste the taste of making money.