Most of the foreign exchange transactions are either profit or loss. Sometimes the trade is closed with a profit, and sometimes the loss is stopped.
There are also many times when the market lacks direction and volatility, and the transactions in hand are not stagnant, not up and down. The market neither lets you leave with a profit, nor does it see the risk of being stopped. After sitting in front of the computer for most of the day, the list in my hand did not fluctuate more than 5 points back and forth. This is true even if the position is held for more than one day.
In this case, how to deal with it? Should I close my position and leave or continue to wait? The answer depends on several factors:
First, how has your trading system performed in the past. After trading for a while, you should have a good understanding of your trading system.
According to the summary and analysis of transactions in the past period of time, you should know the average holding time of your past transactions. Whether your trading style is short-term trading, long-term trading or intraday trading, or range trading. This information can be obtained by analyzing past transactions, statistically analyzing transaction records on the MT4 platform, or from your transaction log.
Second, opportunity cost.
If your trading plan and risk management principles only allow you to conduct limited transactions within a certain period of time, for example, a 1,000-dollar account only allows transactions of up to 0.1 standard lot (regardless of the size of the account, it is strongly recommended that you carry out risk management). If you are currently holding one or several positions that are bad trades, it means you may be missing out on other potentially profitable trades. Some traders may say that regardless of the current transaction, just trade when there is a good opportunity. Keep increasing your positions. If you often violate the risk management principles, you will have to pay the price sooner or later. Once you encounter a big unfavorable market, you will either liquidate your positions or withdraw your funds significantly.
If you encounter a good opportunity, you should decisively give up the current hopeless transaction. If you don't want to end the current transaction and want to start a new transaction, you should set a smaller stop loss for the current transaction than before, and give the stop loss space to the new transaction. Specifically, your total stop loss cannot exceed the risk management principle, for example, the loss of all transactions cannot exceed 5% of the capital. There is also a "compromise" method, if the current position is already the largest position allowed by the risk management principles, and you don't want to end the transaction and want to open a new transaction. At this time, the current transaction can be partially closed to make room for the new transaction.
Third, potential risks.
Holding bad transactions for too long will also face some risks. For example, before important financial events and important data are released, these transactions should be decisively terminated. In addition, short-term traders are best not to hold positions for a week, in case they encounter an unfavorable gap market.
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