The secret of foreign exchange success
1. Identify trading trends
As a foreign exchange trader, you should be able to find the most suitable trading opportunity quickly. Although there is no specific time period to achieve 100% efficiency, I suggest you start with long-term charts and slowly turn to short-term charts.
By analyzing the daily chart at the beginning, we can gradually determine the long-term trend. There are only three long-term trends: upward trend, downward trend and shock trend. After determining the possible trend, we can better find useful signals such as admission and quotation in the short-term chart. If the daily chart does not show an upward or downward trend, then you can switch to a chart that observes for 4 hours or 60 minutes. Usually, highly active traders use minute charts to look for signs of entry and exit.
Determining the market trend is the first and most important decision for traders. Traders need to observe long-term and short-term trends, and then remember when important data and market news are released in the economic calendar. ? Trend is your friend? This sentence is very correct so far, and it is also the trading rule of No.65438 +0 for traders. It's important to follow suit.
Step 2 pay attention to the news
A good trading strategy means that even if you enter the market before the news is announced, your trading is still in a favorable position driven by the news. If you decide to trade before the news is released, be sure to set a stop loss. Some news will quickly change the whole market. Other events, such as wars, government elections, holidays and even bad weather, may have a greater impact on a currency pair.
It's important to know money. For example, the euro/dollar is related to the exchange rates of the European Central Bank (ECB) and the Federal Reserve (Fed). A stronger dollar will lower the euro/dollar exchange rate. Almost all major currency pairs are like this. There are great differences between different currency pairs, so I think it's best to choose a few currency pairs and get to know more about them, and only trade these well-known currency pairs. Only by understanding the fluctuation trend and stimulating factors of currency pairs can you increase the possibility of trading profits.
In foreign exchange trading, mentality comes first, strategy comes second and technology comes third.
First, follow the trend
Taking advantage of the trend is the most direct embodiment of the law of market movement, which is the trend. The only way to treat the trend correctly is to follow suit. This is the first magic weapon to make money or even survive for a long time in the speculative market.
Stanley, a famous American investment expert? Crowe once said: the most profitable and reassuring operation always follows the general trend at that time. The operation that pays the most and feels the most pressure is always when I set up or stick to the contrarian loss position. ? When beginners learn to trade, it is of great value to establish the direction of price operation for the overall success or failure of trading. Determine the direction through objective analysis, then jump into the trend, and stay in it all the time, go with the flow. As long as the trend continues to be favorable to you, you must make a profit by holding positions. Learn to trade in the direction of the trend, and in this process of ups and downs with the trend, through risk management, obtain excellent operational results. This is the essence of following the trend.
For beginners, the recommended analysis tool is the moving average. As a concise and clear trend indicator, the moving average has a good effect in following the trend and won the favor of practical experts. For specific application, please refer to granby's Eight Rules of Average and Triple Screen Investment Theory.
Second, limit losses.
Limiting losses, preserving principal, and holding profitable positions for as long as possible on this premise, thus increasing profits, is the third magic weapon to make money by speculation.
Risks go hand in hand with traders, and novices should have a clear understanding of risks. After setting a stop loss, traders will have a clear quantitative understanding of the bottom limit of the loss, which is conducive to maintaining a stable trading psychology.
While limiting losses, we should learn to make more money to make up for the losses caused by mistakes. Only when you stay for a long time can you make big money. Only when you make big money can you make up for the losses caused by a lot of mistakes and have a balance. This is the final trading profit.
Investors who don't stop loss will definitely lose money, and investors who only stop loss will definitely lose money. Only investors who can stop loss and make money can taste the taste of making money for a long time.
3. Determine the support level and resistance level
Support level and resistance level are very important. These prices can not only determine the entry and exit prices, but also be used to set stop-loss orders and limit orders. Many times, when the price breaks through the support level or resistance level, the trend directly reverses. Reasonable determination of these price levels can help you better understand the changes in currency trends. Many novice traders don't understand why the trend changed soon after entering the market. Therefore, the support level and resistance level help to see the trend clearly.
Use technical indicators
In any market transaction, reasonable admission is considered to be an important part. Using a variety of charts and indicators will enable you to make more favorable trading decisions. It is a good thing that multiple indicators point to the same trend. On the contrary, if the indicators have different signals, then avoid entering the market first. Before opening a position, we must determine the strong direction of multiple indicators for a certain trend. In the long-term or short-term trend, the indicators you can use include moving average convergence deviation (MACD), relative strength indicator (RSI) and random indicators that may be overbought/oversold. The currency pair is always in a certain trend, and its support level or resistance level may be unclear, but this currency pair may still be overbought/oversold, making it possible to reverse the trend.
5. Buy low and sell high (follow suit)
Because the market changes with the trend, there are many small correction trends. In order to maximize your profit, buying low and selling high should be your important trading principle:
In the upward trend, the bottom of the price is long.
In the downward trend, the price is short at the top.
This will allow you to turn into a stop-loss limit order when the trend really reverses, and avoid being forced out because of the price correction. Support and resistance levels help to determine potential callback points. Using Fibonacci callback tool can help calculate the bid-ask price and determine the possibility of currency callback. I strongly suggest that the approximate callback ratio should be calculated according to the historical trend of currency pairs.
6. Reasonable fund management.
Fund management may be the most important step for our success. Reasonable fund management will minimize losses and help maximize profits. In foreign exchange transactions, the use of fund management can be said to be the key to success.
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It is important to use enough funds for trading. In addition, be patient in trading and use the risk-return ratio to ensure long-term profitability. Stick to the same trading rules and learn to accept losses. Whether in foreign exchange or other financial markets, traders must not let their losses exceed their tolerance, otherwise, you will only become more and more panicked and let emotions dominate trading, which is by no means wise. Finally, always remember to use stop loss!
The Secret Behind, a successful foreign exchange.
1. Always work harder than others.
Maybe some people are born to trade, but what really determines the quality of trading does not depend entirely on talent. These successful traders have one characteristic, that is, they are more serious and pay more time and energy than ordinary traders. Others are eager to trade when they know a signal, but they know the principle and details of the signal thoroughly. Others reset the 100 signal, and they may reset the 1000 signal; They don't look so dazzling, but they always work harder than others every day!
2. Be careful when making profits
Many traders begin to be ecstatic when they make a profit, and feel that they have mastered all the technologies. When they are happy to make a profit, they will re-examine their own transactions and make it clear whether the transaction depends on luck or technology, because they know that if they rely on luck, it is not advisable to make a profit even now, because luck can't be far away from them. More often, luck is always opposite to us, so it is absolutely impossible to rely on luck when trading.
3. Find your own reasons for losing money
As soon as some traders lose money, they begin to complain about the market, technology and teachers. They don't think there is anything wrong with their transactions, and even begin to doubt technology. They like to put the blame on others and never find reasons from themselves. However, this is a very dangerous signal. In the turtle trading rules, it has been clearly told us that "those who like to shirk their responsibilities will fail." Those successful short-term foreign exchange traders will not shirk their responsibilities at will, and always look for themselves first when they lose money.
4. Always put risk first.