What are the manifestations of foreign exchange positions?

(1) The total amount of foreign exchange sold exceeds the total amount of “Oversold Position” (Oversold Position);

(2) “Overbought Position” in the opposite situation;

(3) “Savare Position” (Savare Position) where the total amount of buying and selling is roughly equal.

The first two will cause foreign exchange banks to be favorably or adversely affected due to exchange rate changes. In order to avoid the risk of exchange rate fluctuations, foreign exchange banks must operate foreign exchange transactions with other foreign exchange banks, that is, buy when “oversold hold” and sell when “overbought hold”, so that foreign exchange holdings can be used up. It is possible to flatten the difference (Savare).

How to set the size of the foreign exchange position when speculating in foreign exchange?

How to set up a foreign exchange trading position? The premise of setting up a position is that I will never let any trade lose more than 1%. If my account has 100,000 USD, then I will not lose more than 1,000 USD in a single transaction. To know your stop loss level, you must first imagine the level that you can accept when the trade loses, and then set your position size based on this.

for example:

  1. A position of 20% of the total trading funds, plus a potential stop loss of 5%, is 1% of the total funds.
  2. A position of 10% of the total funds, plus a potential stop loss of 10%, is 1% of the total funds.
  3. A position of 5% of the total capital, plus a potential stop loss of 20%, is 1% of the total capital.

Average true volatility (ATR) allows you to understand the range of daily price fluctuations and help you set up positions based on your time frame and stock fluctuations. If your opening price is $105 and the stop loss price is $100, then the ATR is $1, and the 5-day fluctuation period can be used to stop the loss.

Set your position from your own stop loss level and market fluctuations. Your space requirement for stop loss determines the size of your position. If you control yourself to only risk a 1% loss when your trade fails, then every trade is only a trivial one of the next 100 trades, and your emotions will be minimally disturbed. Even if you encounter a series of failures, you still have a chance to survive, so as to fight for the chance of waiting for success.