Theory is the most important part of actual combat. The wrong theory of foreign exchange entry will cause you to make losses again and again regardless of the wrong decision. Therefore, if you want to do foreign exchange, you must have a solid theoretical foundation. How to place an order, where and in what direction? This question is very important. I don’t know how you think about it and how to do it.
How to place an order for foreign exchange transactions to achieve stable profitability
First of all, before placing an order, we have to do a technical analysis (without data prerequisite). The selected object (currency: pound and US), what is its current long-term trend, what is the medium-term trend, and what is the short-term trend? These three questions seem to be very easy, and I think everyone will know, so I won’t talk about these three questions. But there is an important issue that must be said, that is, the definition of trend and its formation. I don’t know how you define it. For it, my definition is: a trend is a direction formed by the main trend of the price change in a specific cycle. The change in the direction of price represents the transformation of long-short power and the embodiment of participants’ ideology. The trend is here. We have achieved this. Is it possible to place an order? It is far from being possible. It just gives us a general direction.
Since it is not certain that there are still important issues that have not been resolved? Yes, now let’s talk about the second important issue before placing an order: the reference cycle issue. Before you start placing an order, you must give yourself a position, you are an intraday trader (ultra-short-term), or short-term trader (hold positions overnight, two to three days), mid-line trader, etc.! After the positioning is determined, the reference period must be selected for one’s positioning. Let’s take an example: such as ultra-short-term: this approach does not hold a position for a long time, so of course it will not use a long period as the main reference standard. Generally, fifteen minutes is used as the main reference period, one hour is the trend direction period, and five minutes is the entry reference period. This approach is to use the small obey large periodic resonance approach. Take advantage of the trend and do not make a contrarian order. The main direction is required for one hour, and the main reference period must be consistent with the long direction period. If you want to get a good entry point, look for the resonance of the entry period. The two important order placement issues of trend and reference cycle have been resolved here, and the remaining issues to be considered are not too important issues, namely, position issues, calculation of profit targets, and stop loss issues.
I believe that many people know that more than 20% of orders placed are considered heavy positions. This is a universal understanding, and here I want to give you a new understanding. Positioning issues involve statistics and are an important part of money management. How much is the position of the order, this must be combined with the accuracy and profit-loss ratio of your own operating system. I don’t know if you guys know what an operating system is. I mentioned it in my first theoretical article and I didn’t say much here. Let me talk about the profit-loss ratio issue here: What is the profit-loss ratio? The literal solution is the ratio of profit to loss. To be more specific, it is the ratio between the profit and the risk brought by your system every day, and my own is 3 to 1, the profit is 3, and the loss is 1. This is a short-term system, usually overnight orders. The profit-loss ratio of the ultra-short system is generally 1 to 2.5, the profit is 1, and the loss is 2.5. Two different systems have two different profit-loss ratios. The profit-loss ratio also determines the accuracy requirements of the system. The lower the profit-loss ratio, the higher the accuracy requirements of the system. Talking and talking back to the system, first stop. Discuss the last question: stop loss. When placing an order, the stop loss must follow.
There are several ways to stop loss:
One is to limit loss and stop loss. This method is determined by considering the degree of loss that the individual can accept. If his loss can only lose 50 points each time, then he will stop the loss by 50 points each time. One disadvantage of this method is flexibility. Poor sex.
The second type is technical stop loss. The one I often use is to set a stop loss under technical pressure or support level, while considering my own ability to accept. If this stop loss range is calculated to reach my profit-loss ratio, then I may not be able to make this order, and wait for the appropriate level. . This kind of stop loss tries to take into account the possibility of market makers’ fraudulent data, so it is generally set at a position that deviates from the technical position by about 3%, because if the stop loss happens to be set at the technical position, this order usually gives Sweep away. There is also an immediate stop loss: This is an important method to further reduce losses based on the actual market situation in conjunction with the second. I remember one point in the previous theoretical article said: Before the market proves you are correct, try to close or reduce the position. This instant stop loss is based on this sentence as the theoretical basis. This kind of stop loss is difficult to say clearly, only you will slowly grasp it in the constant market experience!