People's psychological changes are very wonderful. When they are young, "newborn calves are not afraid of tigers." They dare to think and do, and make mistakes repeatedly. But after a lot of experience, you will "be bitten by a snake once, and be afraid of well ropes for ten years." Become cautious in everything, be careful everywhere, and miss good opportunities. In the process of foreign exchange trading, the process from "not afraid of tigers" to "afraid of well ropes" comes faster. Facing the ups and downs of the market every day, and various trading opportunities of different sizes, every investor tries to capture as many trading opportunities as possible, but the result is that they often miss the market or miss the good ones. Buying opportunities, or missing good selling opportunities, resulting in a huge gap, people have to lament the tricks of good fortune.
So for a foreign exchange investor, how to grasp the buying and selling signals of the market is very important. We can't help thinking: For a new investor, what should we do to avoid this situation?
I think we can consider it from the aspects of method, human nature, and philosophy, so that even if we cannot guarantee that we will catch every buying and selling signal, at least we can guarantee that you will not miss the key buying and selling signals.
About methods: methods mainly include rules and disciplines. In the extremely free foreign exchange market, only rules can tell you what to do and what not to do, and discipline can guarantee firm execution.
For example, if you are a technical trader who adopts the Granville investment method, then you must strictly follow the rules of the Granville transaction method for trading. Just like the investment method of Glenwell mentioned: when the moving average gradually changes from a downward movement to a horizontal movement, and the moving average rises upwards, and the exchange rate also breaks above the moving average, it is regarded as a buying signal. You have to resolutely implement it, don't hesitate and doubt his accuracy. The so-called is easier said than done, when the stop loss is issued 3 times, and the signal is sent out for the 4th time, will you still enter the market firmly?
As mentioned above, entering the market may also stop the loss, so what should we do? We can manage through other methods, such as fund management: when there is a buy signal in the Granville investment method, and the market is not very sure, we can control the position through fund management, so that even if there is a mistake, it will not cause major losses. Losses are not lost opportunities.
The method is different for everyone, but it is inseparable from disciplined execution so that good buy and sell signals are not missed. Only by following the rules can stable profits be expected, otherwise, profits are accidental and losses are inevitable.
About human nature: All laws begin with human nature. Greed and fear swing back and forth like a pendulum. Greed is dissatisfaction, not being able to settle down in time, and it tends to flourish and decline, turn wins into losses, and reverse profits and losses. And when fear takes over our minds, we tend to be restrained and slow to move. Good opportunities are fleeting, and once missed, the time will never come again. Courage is always the key to grasping the market. Fear, more than greed, is the enemy of missing the market. As a novice, there is a possibility of victory if you have the heart to win, but if you are afraid of your hands and feet, your victory will be slim, and you will be mediocre for a long time.
On the road of investment, you need to have strong endurance and decisiveness. As the saying goes: a little patience will lead to chaos and big plans. In the face of the temptation of the market, only by grasping the weakness of human nature can we not make mistakes or miss the buying point.
About philosophy: The so-called investment philosophy is that you have faith. Faith is the interpretation of the trading world, it is derived from the understanding of the market, it is the shield of our thoughts, it is our unshakable philosophy, and it is a calming agent for us to avoid the influence of market emotions. For example: Soros' investment philosophy is fallibility and reflexivity. Investment philosophy does not have to be original, but can be existing. For example, the principle of market trend operation. The market always operates in the form of a trend. Once a large market trend is formed, it will last for a long time. Deepen your understanding of it. It can be deeply implanted in the mind and become an investment philosophy and belief.
Trading is like life. Some people would rather miss it than make mistakes, because they are afraid of making mistakes and missing good opportunities, and they will have no future in their lives. A samurai has a sword in his hand, and once he has a chance to kill the enemy, he must strike with thunder and dare to shine the sword!
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