How to avoid liquidation in foreign exchange speculation? Whether it is in simulated trading or real trading, liquidation is no stranger to novices. The more inexperienced people start an order, the more impetuous they will be, and the more likely they will be to lose heavily or even liquidate. happened. Let’s see what methods can effectively avoid the occurrence of liquidation.

What is a liquidation in foreign exchange speculation?

The so-called liquidation, simply means that the loss exceeds the account balance. When the market changes greatly, if most of the investors’ funds are occupied by margin and the trading direction is opposite to the market trend, then due to the leverage effect, it is easy to encounter the situation of liquidation.

How to avoid liquidation in foreign exchange speculation? How to remedy a foreign exchange liquidation

First, do not blindly follow orders

Many investors are not confident in themselves, trust others’ words, and want to operate through others’ orders. But the market is uncertain, and no one can predict it. Therefore, investors must have their own opinions and learn to analyze by themselves.

Second, reasonably control the position, and achieve a small amount of light storage

Too heavy position is the main reason for liquidation. Try not to use a large percentage of leverage. Don’t be blinded by the thought of getting rich overnight.

Third, set a stop loss

“Everything is done in advance, and nothing is done beforehand.” When investing in foreign exchange, you should develop the habit of setting a stop loss when opening a position, and don’t wait until the position is closed and regret it.

The fourth point: avoid over-trading

Many foreign exchange traders are still thinking about how to continue trading and/or profit to make up for the losses when successive trading failures bring losses. In fact, this is a very bad thing, because when repeated failures will cause a big blow to the trader’s psychology. This is very easy for traders to take subjective actions, which is very dangerous. So when you lose money, do not continue trading, you should calm down and think about the reasons for the failure. After calmly thinking about your mistakes and figuring out a solution, you can trade. In short, you should adjust your psychology and mentality when trading.

Fifth point: Do not operate against the market

In the foreign exchange market, there are often short-selling or over-killing, and this eventually forces the trader’s account to liquidate. The main reason is that traders think that they are dead or too many, and they will not be flexible to change their strategy. Therefore, you must follow the trend when trading, which will greatly reduce the possibility of your own liquidation
What is a liquidation in foreign exchange speculation?

The reasons for the explosion of foreign exchange speculation are as follows: short orders become long orders, long orders become locked orders, and locked orders become violent warehouse orders.

Never admit compensation, increase the position on dips, and finally go into a big position. Knowing that he was wrong, he was lucky, hoping for a miracle, and finally went into a storm.

For traders with a certain amount of experience, these can actually be avoided. Do not engage in bottomless transactions beyond their own circumstances. Eat as much food as you can, do your best, and do a good job in risk management, capital management, and reasonable control. Own trading positions and costs.

The foreign exchange market is full of profit opportunities, but no one can eat a fat man. Doing foreign exchange transactions requires a calm mind. Doing foreign exchange is not a gambling. You must have a full understanding of the market and yourself, be clear-headed, and do what you can.