Three characteristics of the foreign exchange market
In recent years, the reason why the foreign exchange market has been favored by more and more people and become the new darling of international investors is closely related to the characteristics of the foreign exchange market itself. The main features of the foreign exchange market are:
(1) There is a market but there is no market
There are basically two systems in the financial industry in Western industrial countries, namely the central operation of centralized buying and selling and the merchant network without a unified fixed location. Stocks are bought and sold through exchanges. Like the New York Stock Exchange, London Stock Exchange, and Tokyo Stock Exchange, which are the main trading places for stocks in the United States, the United Kingdom, and Japan, the centralized trading of financial commodities has unified regulations on quotations, trading hours, and delivery procedures. And established a trade association, developed a code of conduct.
Investors buy and sell the commodities they need through brokerage companies, which is "there is a market and there is a market". However, foreign exchange trading is carried out through a merchant network without a unified operating market. Unlike stock trading, which has a centralized and unified location. However, the network of foreign exchange transactions is global and has formed an organization without organization. The market is connected by an agreed method and advanced information system. Traders do not have membership in any organization, but they must obtain the same Industry trust and recognition. This kind of foreign exchange trading market without a unified venue is called "there is a market without a market". The global foreign exchange market trades an average of trillions of dollars every day. Such a huge amount of funds is liquidated and transferred without the control of a centralized place or central clearing system, and without the supervision of the government.
(2) Cyclic work
Due to the different geographical locations of financial centers around the world, the Asian market, European market, and American market have become a global foreign exchange market that operates continuously 24 hours a day due to time differences. 8:30 am (based on New York time) New York market opens, 9:30 Chicago market opens, 10:30 San Francisco opens, 18:30 Sydney opens, 19:30 Tokyo opens, 20:30 Hong Kong, The Singapore market opens, the Frankfurt market opens at 2:30 am, and the London market opens at 3:30 am.
Such 24-hour uninterrupted operation makes the foreign exchange market a day and night market. Only on Saturdays, Sundays and major holidays in various countries, the foreign exchange market will be closed. This continuous operation provides investors with an ideal investment place without time and space barriers, and investors can find the best time to trade. For example, if an investor buys Japanese yen in the New York market in the morning, and the Japanese yen rises after the Hong Kong market opens in the evening, and the investor sells in the Hong Kong market, no matter where the investor is, he can participate in any market at any time. buy and sell. Therefore, the foreign exchange market can be said to be a market without time and space barriers.
(3) Zero-sum game
In the stock market, if a certain stock or the entire stock market rises or falls, then the value of a certain stock or the stock value of the entire stock market will also rise or fall. For example, the stock price of Nippon Steel in Japan fell from 800 yen to 400 yen. Japanese yen, so that the value of Nippon Steel's entire stock has also been reduced by half. However, in the foreign exchange market, the change in the value expressed by the exchange rate fluctuation is completely different from the change in the stock value. This is because the exchange rate refers to the exchange ratio of the two currencies. An increase in the value of another currency.
For example, 22 years ago, 1 U.S. dollar was exchanged for 360 yen. At present, 1 U.S. dollar is exchanged for 120 yuan. This means that the value of the yen has risen, while the value of the U.S. dollar has fallen. From the perspective of the total value, it will change and will not increase the value. , also does not decrease the value. Therefore, some people describe foreign exchange trading as a "zero-sum game", more precisely a transfer of wealth. In recent years, more and more funds have been invested in the foreign exchange market, and the volatility of the exchange rate has been expanding day by day, which has led to a larger scale and faster speed of wealth transfer. Based on the global foreign exchange transaction volume of 1.5 trillion U.S. dollars per day, A rise or fall of 1% means that 150 billion funds will be replaced by new owners. Although the foreign exchange rate changes greatly, no currency will become waste paper. Even if a currency keeps falling, it will always represent a certain value unless the currency is abolished.
trading center mentality
Many people think that from losing money to making money, the key lies in whether they can find the right trading opportunities.
This sounds difficult, and it is, and it is also very important.
But more importantly, before the right trading opportunity appears, I can resist the impulse in my heart to trade, make orders, and make money, and let the market fluctuate up and down without my ability to sit still.
This is easy to say, but it is hard to know how difficult it is after the actual transaction. There are clear divisions in the market, and there are very few certain trading opportunities. The point of most people entering the market is actually specious. In hindsight, you can find explanations for both trading directions. No matter how you look at it, how reliable it is, it's like a person who is very hungry, and all he sees in his eyes are delicious, which makes people want to grab a bite.
I can't control the hand that is eager to place an order and make money. Even if I do it right or for a period of time, no matter how much profit I make, I will lose it all later; missed.
One more thing, someone told me it was wrong, the most important thing is mentality, I think this is a bit of a negative result, because a good mentality is actually the result of correct trading, not the reason for correct trading.
There is an old saying: "A good list will take care of itself", how do you say it? When a correct order is entered, the most common situation will immediately generate floating profits. Even if there is an occasional rebound and callback, it will quickly regain lost ground. Under the protection of floating wins, advances can be attacked, retreated or defended, and the mentality is not good. are difficult. Recalling the transactions you have done before, when the order in your hand has considerable profits, have you ever suffered like when you were holding a loss order? You get rid of it? Is that trembling and worrying about gains and losses still fresh in your memory? In fact, you are still the same you, the skill level has not changed, but the mentality is completely different, why? The profit and loss results of orders are different.
Therefore, to protect the mentality, the way to solve the root cause is to go back to seeing the right thing and doing the right thing. Without the ability to trade correctly, empty talk mentality is like water without roots, or even just to cover up your unqualified trading ability. A fig leaf; on the contrary, when you have the ability to trade correctly, the mentality problem will naturally not be a problem. The so-called etiquette is learned after the warehouse is full, and with enough profit protection, it is natural to be calm.
Always keep in mind that we do not come to this market to hone our minds and destroy human nature. To make profits and make money is the purpose. Don't do it, take trading as your goal, or even take trading as your goal, indulge in it and forget your original intention, it won't be worth it.
Why do losers keep repeating the failure method?
The failure of novices is understandable, after all, it is necessary to accumulate experience. And what about the failures of veterans? Why do some people still fail after several years or even more than ten years? What kind of disk has not been seen? What kind of mistakes have not been made? What kind of coping methods have not been thought about? But why is it still a failure? Is it true that the difficulty of the foreign exchange market is that there are endless types of mistakes? No, on the contrary, you will not make more than three kinds of mistakes. Open your trading records for many years, and you can classify all the reasons for the failure. You will find that it is basically chasing ups and downs without stopping losses, straight-line thinking does not adjust, there is nothing new, and there is no creativity. Because doing foreign exchange speculation itself is the eternal repetition of two actions, opening and closing positions. However, there are only four combinations of opening and closing a position, right to open a position, right to close a position, and make a profit; deficit. From this point of view, there are only three kinds of mistakes you can make. And why do such a few simple mistakes appear endlessly in our operations? Are we really unable to do anything about them?
In fact, no matter what kind of mistakes, in the final analysis, there are only two words - do it. Successful people are successful because they did it. Losers fail because they can't do it. No matter how long you can stay in the foreign exchange market, if you can't do it in a day, you can't get out of losses in a day.
The loser is not a trading system that does not open and close positions. No matter how stupid a person has experienced countless failures, he will sum up the way to deal with it. But knowing does not mean doing it, and failing to do everything is in vain, no matter how good the trading system is, it is useless. The difficulty in the foreign exchange market is nothing else, it's just that it can't be done.
Also, the reason for not being able to do it is related to greedy words
A greedy word has ruined the dreams of many foreign exchange speculators, and many people have not figured out that they were harmed by greedy words when they left. Because of greed, I frequently operate and rush forward, completely losing my own trading system, and rushing forward based on my feelings, and I am scarred in the end. Because of greed, even if the book has an ideal profit, it does not want to accept it as soon as it is good, but wants to add to the cake and create another good performance, but in the end all previous efforts are wasted and handed over.
Because of greed, the funds do not stay for a moment, and they shuttle back and forth between various varieties without interruption, trying to make all the opportunities, but the result is counterproductive. In short, because of greed, the trading system is useless. However, all trading systems will not provide you with many trading opportunities, and you may not necessarily be able to obtain the benefits you imagined. Whether you can be content with the small profits in front of you, not be tempted by huge profits, and only make orders that conform to the trading system is a key step for you to get rid of greed and abstinence. After all, even a small profit of 1,000 yuan is far better than a loss of 10,000 yuan.
The reason why it cannot be achieved is also related to the set profit target
The more profits are set, the better. Who asked us to speculate in foreign exchange? Who doesn’t know that this business can make us rich overnight? And how many people have been hurt by compound interest. How much yield per day, how many days later I can create a miracle. Invisibly give yourself a setting, to make a profit every day, and how much the profit rate should be. But not every day's market can meet your profit requirements, and your trading system may not be able to filter out such opportunities. When there is no market, why can't you take a day off? Why can't you count how much you have and stop forcing a certain goal. Looking through the past fund records, is this day without trading or a day with a slight profit stronger than those days when you have suffered a lot of losses? Talking about the intensity and risks of foreign exchange offshore, international and national supervision!
There may be many reasons why it cannot be done, but for the loss-making foreign exchange speculators. The most important thing is to start with a single order, don't try to make a lot of money, and start to do it in a serious and down-to-earth manner. Give up all opportunities that do not conform to your own trading system, even if you may make a fortune after chasing them, don't be tempted. Practice repeatedly to make every list comply with the regulations. For those who are losing money, the achievement itself is far more important than the profit at this stage, and it must be cultivated into a natural habit.
Only by doing it without compromise, can it be possible to reverse your loss history. All the money in the world can never be earned, only earn your own money. To do it is to give up, and you can't do it without giving up. Stay up all night to read the basics of foreign exchange!
Are you still losing money? You must not have done it. Do you want to get out of a loss? You have only one way to go, and that is to do it!
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