Opening a position refers to an investment behavior in which market participants invest funds into the traded market through the trading platform according to their own trading plan, in order to form expected returns. Opening positions also transformed traders from market waiters to market participants.
When the market has reached your expected entry position and there is a better entry signal to match it, you can enter the market decisively. But before the opening, there are two more important issues that need to be established. One is the risk-reward ratio, that is, the ratio of risk to reward, that is, the ratio between the profit target and the stop loss target. Generally, it is required to reach a ratio of 1:1 or more, indicating that this transaction is worth doing. The second is to focus on fund management. It is generally recommended that the risk limit be controlled within 2%, that is, the maximum loss of a single transaction cannot exceed 2% of the total capital. Calculated by 100 times leverage, if it is 10,000 US dollars, it is recommended to place 0.5 lots per order. According to this ratio, you can calculate the number of orders placed according to your own funds. In fact, the final transaction is a matter of fund management.
How to grasp the timing of opening a position:
- K-line form. Look for a bearish reversal failure pattern when you are long, and look for a bullish reversal failure pattern when you are short. Also need to pay attention to the strength of the K-line.
- The break of the horizontal support resistance level, or the counterattack after the break ends.
- The trend line breaks, or the counterattack after the break ends.
- Breakthrough in the form of technical graphics.
Points to note when opening a position:
- Clarify the holding period.
- Clear the stop loss and target
How to choose the opening point for foreign exchange?
The choice of opening points requires experience and trading strategies, and there is no unified standard. If you want to do European and American currency pairs, you must first understand the characteristics of European and American currency pairs.
EUR EUR/USD USD is well known, EUR/USD is the currency pair with the largest trading volume in the foreign exchange market. Therefore, it is also a major currency pair with the lowest spread. Its characteristics include: · It is vulnerable to news events such as non-agricultural data (NFP), Federal Reserve Open Market Committee (FOMC), quantitative easing policy, and Eurozone political activities; · It has the greatest volatility during London trading hours, but Usually the action within a trading day is not very large; · Its daily consolidation range is at an average level; · During most of the trading day, EUR/USD is in a unilateral market, and usually in the larger Fibonacci value The Naqi horizontal line retreated.
GBP British Pound/USD U.S. Dollar
GBP/USD is usually known for its volatility and large volatility.
Its characteristics include: · The largest volatility during London trading hours; · When the London market opens, its volatility is obvious, and there are often false breakthroughs; · Like to test at support and resistance levels; · Frequently in Fibonacci with larger values The Naqi horizontal line retracement, such as 78.6%; · The intraday consolidation range is usually very large; · This is a pair of currency pairs that like to rise against the trend. In this case, it is suitable for counter-orders; · Easy to be affected by NFP, The impact of news events such as the FOMC, quantitative easing policies, and political activities in the euro zone. In the early stages of a reversal, it is usually very unstable, with many adjustments and slow progress.
AUD Australian dollar / USD US dollar
AUD/USD is different from GBP/USD in that it has less volatility.
Its characteristics include: · In unilateral market, prices often face a fall; · Australian news usually has a significant impact on the Australian dollar; · It fluctuates greatly during Asian trading hours, and fluctuates well in London and New York; · Australian dollar It is a commodity currency, closely related to the economic data of Australia’s exports, China’s import and export, and manufacturing; AUD/USD is also often affected by the two market sentiments of “Risk off” and “Risk on”.
When Risk on, traders are not afraid of risk, and when they buy Australian dollars, their price rises; when Risk off, traders buy a lot of US dollars in order to avoid risks, and their prices fall.