Let me start with a classic story:
It is said that in ancient India, a man named Scylla invented chess and dedicated his masterpiece to King Siddhartha. Soon, the king was fascinated by the clever play and endless changes of the game. When he was happy, he called Scylla and said to him, "Your invention is amazing and will bring fun to many people. You know, my kingdom is very rich all over the world, and I will give you a generous reward. Tell me what you want. " Scylla humbly replied, "Dear King Xia Long, you know that I am a poor man, and my greatest wish is to fill my stomach, so I hope you can give me some wheat to keep me from starving. Have you seen this chessboard designed by me? It has 64 squares. Please put 1 wheat in 1 grid, put 2 wheat in the second grid, put 4 wheat in the third grid, put 8 wheat in the fourth grid, and so on. In the future, the number of wheat placed in each grid is twice that of the previous grid, until all the squares on the chessboard have put the wheat that should be put. "
Unconsciously, the king thought this request was not too much, and readily agreed to Scylla's request. Later, I asked a mathematician to do a calculation, and the king was dumbfounded. Even if he takes out all the grain in the treasury, it is not enough to meet the requirement of 1%, because even if a grain of wheat weighs only one gram, it needs several trillion tons of wheat. Although on the surface, Scylla started from a very low point, it quickly became a huge number after many times of product. This is the power of compound interest.
The above is a classic example of compound interest. You can only imagine how powerful this function is.
Without delay, let's get to the point, and talk about how the foreign exchange market can achieve stable profits through compound interest. Suppose we invest $65,438+000, and the profit of each trading day increases by 65,438+0%. Maybe many friends will think that we can only earn 1 dollar every day, so we can only earn more than 200 dollars in more than 200 trading days a year. Actually, it is not. Let's make a simple calculation. We earned 1 USD on the first day. This lasted for 10 days, namely 1 10.46 USD, the 20th day was 122 USD, the 50th day was 164.46 USD, and the 0th day was 100 USD 270.48 USD. Assuming that there are only 200 days of transactions a year, then according to this profit rate, the funds can be doubled seven times a year.
Some people may think that it will be difficult to make a profit of 1% every trading day, so there are 52 weeks in a year according to the yield of 3% per week. Even if we have 50 weeks, we can accumulate 438 dollars through compound interest in these 50 weeks. Specifically, you can set up an excel to calculate.
If you feel profitable every week, it is still very difficult. Then, based on the monthly profit rate 10%, we will be 3 13 dollars a year. In a year, the funds have tripled.
Many people envy those experts who claim to earn 30% and 50% annualized returns. As we all know, how difficult is it to annualized 100%?
Suppose our goal is 30% annualized, then the monthly share is only 2.5%. If we share this 2.5% every trading day, we only need to make a profit of 0. 1% every day. Imagine how difficult it is to make a profit of 0. 1 every trading day. Joining you only increases $65,438+000, and 0.65,438+0% only needs you to make a profit of $0.65,438+0. Take at least 0.0 1 lot as an example, you only need to make a profit 1 point. Is it difficult?
Many people think that foreign exchange is difficult to do, and that foreign exchange is always easy to lose money. What is the reason?
In fact, the biggest reason is that the transaction is too heavy and too greedy. I thought I could get rich overnight from the foreign exchange market. I don't know that heavy trading is a taboo in foreign exchange trading. As long as it is a heavy trading, 99% of them end in failure.
To this end, I would like to remind all traders that foreign exchange trading is a long-term profitable process. If you stick to it a little every day, the room for profit is infinite.
Give another simple example. What is the difference between the power of 100 of 0.99 and the power of 1.0 1? This can be calculated by yourself, and the effect is absolutely amazing.
Having said that, in fact, to sum up, in a word, if foreign exchange wants to be profitable, it must be traded lightly and profitable for a long time. Don't be greedy, don't think about getting rich overnight. Mentality is more important than anything else.