Successful traders view trading as a serious endeavor and, like any venture, it requires adequate capital. Any venture without sufficient capital is bound to fail, and with insufficient capital, traders are at a serious disadvantage to begin with.
The foreign exchange market is a speculative market with margin as leverage, two-way trading and T+0 trading. While obtaining high returns, there are also high risks. In this market, 90% of the participants are speculators, so they may quickly double their fortunes, or they may quickly lose their money.
The reasons for this situation are:
1. Full warehouse operation
There is a saying in the foreign exchange market that those who have a full position will die! Although the operation with a full position may increase your wealth quickly, it is more likely to make you lose your position quickly.
Nothing is absolute, and even a fund cannot completely control the impact of emergencies and policy or news.
The accumulation of wealth is directly proportional to time, which is the consensus of foreign exchange masters at home and abroad. Relying on small capital gains to obtain large-scale profits and large fluctuations in the capital curve is itself an abnormal phenomenon. Only by advancing two and retreating one, and steadily increasing is the way to success. Never fill the position, each opening position does not exceed 10% of the total funds, and the maximum is 20%, in case of margin call or other situations.
2. Open positions against the trend
Many new investors like to open reverse positions by guessing the top and bottom of the market. Although sometimes they are lucky and can make a profit by chance, this is a very dangerous action and a serious contrarian behavior. Once they encounter continuous unilateral The market will be forcibly closed until the position is broken. Never guess the top and find out the bottom to open a reverse position.
3. Position syndrome
This is a common problem among investors, and the "symptoms" are:
When there is no order in hand, the hands are itchy and you have to place an order;
If you have an order in hand and panic, once the market moves in the opposite direction, you don’t know what to do; you think there are endless opportunities, and you always want to keep operating, but the more you lose, the more you lose. The reason is mainly because there is no good technical analysis method as the backing, and there is no bottom in mind. As everyone knows, rest is also a method of operation. Sit back and wait, the cheetah will attack; the market will rest when there is no opportunity, and follow up decisively when there is an opportunity; stop profit can be resolutely implemented with moving stop loss.
4. Guess the top and bottom
Some investors always judge the top and bottom of the market based on their subjective consciousness. As a result, they are trapped on the mountainside and cannot be cut down, which eventually leads to a big loss. When doing transactions, you must do a good job of plan analysis and execution plan analysis. Everything depends on the chart and follows the trend; never measure the top and bottom, and resolutely be a follower of the market trend.
5. Never give up
Many investors have a stubborn temper. They never admit defeat when they make mistakes. They don’t know how to solve the wrong orders in their hands in the first place, and even let the mistakes continue. The consequences can be imagined. "I just don't believe it won't go up, I just don't believe it won't go down..." This kind of mentality is absolutely unacceptable. When admitting that you have made a mistake, don't take chances and resolutely stop the loss at the first time.
6. Bounce against the trend
Is it possible to grab a rebound? If the method is correct, of course it is possible. Otherwise, it's like licking blood with a knife's edge. If a knife falls from the sky, when should you catch it? There is no doubt that it must be after it falls to the ground and shakes, if not, it will definitely be scarred. Grabbing a rebound requires certain skills. Those who are inexperienced don't need to take risks, just follow the trend, and must pay attention to the management of funds when participating in the rebound.
7. Frequent "24/7" operations
Many investors want to be all-around players. When the "long" is over, they will be "empty", and when the "empty" is over, they will be "long". Although they are very "strict" to themselves, this violates the importance of following the trend of the market. When there is no one force breaking another force, don’t move the opposite idea. The bull market is to go long, close the long, no matter how much, and then close the long... The short market insists on opening short, closing short, opening short again, and closing short again ...
8. Indecision when placing an order
When you are long, you are afraid of luring the long, and you are afraid of false breakthroughs. When you are short, you are afraid of luring the short, which will cause opportunities to disappear in vain. Understand the principle that there is always a coasting inertia after the train starts. When the trend takes the first step, we follow up at one and a half steps until the balance is broken and the trend is established. Take the "take it all" operation strategy , when the signs of a false breakthrough appear, the odds of winning in the opposite direction are very high.
9. Disadvantages of medium and short-term
Some people mistakenly think that the short-term and mid-line are the length of holding positions, but they are not. The so-called midline is to hold orders in one direction rhythmically before this force is broken after the trend of large cycles and large fluctuations comes out, and it cannot be based on the length of time. The short-term and mid-line are originally one, but the time period and fluctuation range are different, and the methods used are the same. Recognize the disadvantages, combine the short and the medium to operate according to the rules.
10. The mentality of staring at the market
Many investors must have this experience: if you are long, it will fall; if you are short, it will rise; Sometimes luck is very important in foreign exchange, and the main force does not lack your hand. When the state is not good, turn off the computer immediately, take a break, and start again after calming down.
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