Cut off losses, let profits run, and choose low-risk entry points ------ these are the things I have repeatedly emphasized in foreign exchange transactions. Why keep repeating these old sesame seeds and rotten millet?
Because countless people, countless investment behaviors, and countless decisions have repeatedly violated these principles. Sometimes I really feel ridiculous for myself and others.
How ridiculous the human mind is, repeating wrong behaviors and falling over the same stone over and over again. Today I will talk about what is a low-risk strategy and why it is so important. Low-risk strategies are for people who eat the market and trade for a living. It is not suitable for people who have some spare money and like to speculate occasionally in the market to feel the excitement. Such people are also destined not to survive in the foreign exchange market for a long time.
There are several key points of the low-risk strategy:
Number one: Don't be a jack-of-all-trades:
A person can only be awake for one time frame. Those who do daily lines are doing daily lines, and those who do weekly lines are doing weekly lines. Those who make hour lines are hour lines, and those who make minute lines are minute lines. Open a position based on the minute line, and hold a position based on the hourly line. If you lose money, you don’t want to stop the loss and want to fight hard but hope to go to the daily line. The downtrend hits your bloody head. Trading like this can only make your mind more and more chaotic, without a fixed set of rules and systems.
A person can only stay awake in one mode. To do sideways oscillating, selling high and buying low is to sell high and buy low. To make a trend is to make a trend. If you think you can take both sides in the volatile market and the trending market.
Then in most cases, you will be in a daze, and there is no clear closing point and entry point.
Second, don't be greedy:
What is the reason that makes people violate simple, clear and effective principles and continue to make wrong behaviors? It's just greed. Some people always want to double it every year and double it every month. Whenever I open the market software at night and see a variety or stock with a huge increase, I always sigh, why didn't I catch this? So: I want to do any market, I want to do any model, I want to do any kind of stock. What people don’t understand is that if you only operate one stock or futures variety every month to increase your principal by 10%, ten percent After a year, you can already become a billionaire. Is it hard to get 10% a month? It is not difficult in any market and any situation. Every market has huge opportunities for you to achieve this every month. It is really not difficult to make stable profits. You can achieve this by grasping your most proficient patterns once or twice a month. The difficult thing is how to restrain one's impulse and greed not to do things and market conditions that one is not familiar with.
The research sums up a model, or a fundamental or technical method, to thoroughly understand this model, to clarify the accuracy rate, stop profit and stop loss issues, and only do it once or twice a month, so why worry about 10%?
Things that don't fit your own pattern are skyrocketing, so don't bother with them. This indifferent attitude is the key to successful trading.
Third, what is a low-risk strategy for trend trading:
It's very simple, it's still an old-fashioned thing, following the trend is the safest, enter the market after the trend is established, and set two points before entering the market, one is the profit stop point and the other is the stop loss point, try to be close to the start of the trend Point position to enter the market. If you miss the starting point of the trend, then don’t chase the rise and kill the fall during the continuation of the trend, but wait for the callback of the upward trend to meet support and go long, and the rebound of the downward trend meets resistance to sell short. This is Relatively safe point. Don't predict the trend in advance, but wait for the trend to start and jump on the train of the trend. If the train suddenly stops or turns, it will not take you where you want to go. In real life, people find that they are on the wrong train and ask to get off immediately instead of following this train to another place and spending money Sit back.
You have to be so resolute and decisive in the market. In addition to strict stop loss points, there must also be a set of strict selling principles. Under normal circumstances, the development of the trend is composed of the trend and the box arrangement. The profit stop point is set at the place where the lower level of the box arrangement is broken. The selling principle must be strictly implemented as the stop loss principle, and the protection of profit is the same as the protection of the principal. important. In addition, there must be a set of objective things to indicate the trend. Objective indicators are very important. This is the essence of systematic trading. Subjective judgments always have personal feelings, and preconceived ideas of bullish and bearish. Don't analyze the market, losers analyze the market all day long, thinking that they are smarter than the market. An objective technical system points out that an upward trend is an upward trend, and that a downward trend is a downward trend. The market will never lie.
To sum up, from a general perspective, the low-risk strategy is to only do the model that you are familiar with and after intensive research, the winning rate can be grasped, and the risk can also be grasped.
From the perspective of trend trading alone, the low-risk strategy is to enter the market after waiting for the trend to form, try to get as close to the trend starting point as possible, and set a stop-loss and take-profit point.
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