Why are we always slower than others when closing foreign exchange positions? Is there anything else we don't know about the operating skills of foreign exchange liquidation? The following are the reasons for the slow liquidation of foreign exchange positions by Bian Xiao. I hope you like it.
Why is the liquidation of foreign exchange slow?
Many people think that opening a position is easier than closing it. There are many ways to open positions, such as following the trend, breakthrough, channel and so on, but there is a lack of systematic liquidation analysis. If it is a loss-making transaction, it is easy, because it will close the position when it encounters a stop loss point, but it is more difficult for a profitable transaction to maximize profits. This paper discusses several liquidation strategies and their advantages and disadvantages. No method is perfect, and any method has its shortcomings. Only by understanding the shortcomings can we better understand the actual trading system.
(1) index analysis may be widely used, such as closing positions when the express line crosses the slow line or the signal line crosses the reference value. Its advantage is that the closing price has a technical basis, which is reasonable and accurate. Especially when there is a strong trend, it can often grasp most trends, but its shortcomings are equally obvious. Most technical indicators are lagging behind, and it is impossible to close positions in time to truly maximize profits. Some indicators will not work when the market is consolidating. It may even turn profitable transactions into losses, so you must have a thorough understanding of the indicators used when using this method. The shortcomings of this method are sometimes inevitable, and trying to confirm with more indicators may not be the best solution.
(2) The simplest method may be to set a profit point, especially for conservative traders. Setting a smaller goal can often get what they want, but there must be a reasonable risk/reward ratio when trading. If the profit target is 20 or 30 points and the stop loss is 50 or 100 points, it will be very dangerous. If the stop loss is unreasonably close to the matching small profit-taking target, it is likely to encounter the stop loss too early, resulting in losses. It is better to have a certain basis for the number of take profit points, rather than a random number. For example, according to the statistics of historical data and the average fluctuation points during trading hours, it is also a good strategy to close some positions when reaching the profit target, move the stop loss to the open position, and then close the remaining positions.
(3) Closing positions with moving stop loss is another commonly used method. This method is also relatively simple, and often can get ideal results. However, to set the tracking point reasonably, it is not that the smaller the tracking point, the better. If you encounter a stop loss too early, you will not maximize your profits. On the contrary, you may sometimes turn a profitable transaction into a loss.
(4) Some people use the time closing method, such as closing positions at the closing of a certain market, closing positions before the release of important data, or closing positions after trading for a period of time. The main purpose of this method is to avoid risks, and sometimes it doesn't even consider the profit and loss of the transaction at all. It can't achieve the goal of maximizing profits at all, but it can control risks more effectively.
(5) Using the price closing method is a method that some professional traders like to use, because this method can better achieve the goal of maximizing profits. This method rarely uses technical indicators. In fact, it uses PriceAction, that is, it is necessary to determine the effective support/resistance level first, and then set the profit target at these prices, so it is quite reasonable, but if the support/resistance level is misjudged, the goal of maximizing profit will not be achieved. When judging, you can refer to the four-hour chart or the sky chart, because the support/resistance level on the low-hour chart may be meaningless and not really reasonable on the high-hour chart, so sometimes the transaction is already the highest and lowest level on the high-hour chart.
Why is foreign exchange withdrawal so slow?
The reasons for the slow withdrawal of foreign exchange funds are:
1. There may be an open bill when withdrawing money, and the withdrawal amount may account for the deposit amount, so the withdrawal cannot be completed. Traders only need to apply for withdrawal after closing their positions;
2. The used account must be an account bound by my ID card, and the third-party account cannot withdraw money, so investors should keep in mind. This aspect is also to ensure the safety of investors' own funds;
3. The last point is that there are mistakes in filling out the application, such as the internationally accepted bank code and bank card number, which will also be rejected. The owner needs to go back and fill it out correctly.
What is the compulsory lightening system?
Forced lightening refers to the fact that the exchange will declare the closing of unfinished transactions at the daily limit price, and automatically match the closing price with the net profit investors of the contract according to the proportion of positions. If the same investor holds a two-way position, the closing declaration of the net position will participate in the calculation of forced lightening, and other closing declarations will automatically hedge with their locked positions.
Specific to the Shanghai and Shenzhen 300 stock index futures, the compulsory lightening system refers to all positions that have been declared in the trading system to be unable to be closed at the daily limit price after the market closes, and the net position loss of the investor's contract unit is greater than or equal to 10% of the settlement price of the day, and the investors whose net position profit of the contract is greater than zero are automatically matched according to the position proportion. The price of compulsory lightening is the stop price on the contract day. The economic losses caused by the above lightening shall be borne by the members and their investors. On the day of compulsory lightening, the trading margin will be restored to the normal level at the time of settlement, and the price limit of the contract will be implemented according to the contract specifications on the next trading day.
Is it profitable to liquidate stocks?
Closing a position refers to the behavior of investors manipulating some stocks to sell. Whether they make a loss or gain after closing their positions depends on the investor's position cost, closing procedure cost and closing price, that is, when the closing price is higher than the position cost and the profit brought by the difference can make up for the procedure cost, they make money; on the contrary, when the closing price is lower than the position cost, they make a loss.
For example, if the cost of a stock held by an investor is 9 yuan, the number of shares held is 4,000, and it is sold at the share price of 10 yuan, and the selling procedure fee is 50 yuan, then the income of the investor after liquidation = 4,000× (10-9)-50 = 3,950 yuan.
If there is a forced liquidation or short position, it will lose money, usually in a margin account, that is, investors borrow money to buy stocks or borrow securities and then sell them. Securities companies will set a liquidation line to get out of danger. When investors touch the liquidation line and lose money without additional margin, the securities company will forcibly close the position.
What are the types of foreign exchange pending orders?
Buy stop loss: buy stop loss, pay above the current price, and break through the pursuit of orders, that is, pending orders chase up above the current price; Sellstop: sell stop, that is, place orders below the current price, break through the chase, that is, buy limit orders, place orders below the current price, and do more on dips, that is, buy sell orders below the current price, sell limit orders, place orders above the current price, and short on rallies, that is, place orders above the current price.