In terms of position management, there are light and heavy positions. Which is better? There are different opinions on this issue. There are differing opinions on the Internet.
It has been said that trading should be light, with little ups and downs between success and failure. This allows for a calm mind operation and no outbursts and imbalances. They are against onerous transactions. They say the heavy transaction is the cause of the explosion. Once heavy trading goes wrong, judgment will damage vitality, and the mentality will be unbalanced, which will lead to thinking demons, and then you want to hand over capital and lose control. The result is a constant vicious cycle.
It has been said that to have the goal of making big money if you have a chance, you have to trade a lot. They are against light trading. They say that wet trading is too inefficient and a waste of time and effort. Once you trade light positions, you won't make a lot of money when you come across a big opportunity. In the end, even if you don't break out of your position, you won't make money, it's a waste of time and energy. The purpose of counter-offensive cannot be achieved at all. They say people have limited opportunities. When they invest, they take the best chance to make a big fight and hit it off.
They both seemed reasonable, they felt they were missing something. They confuse people who want to learn later, or they don't have clear answers. Therefore, these two types of people, whether they are light traders or heavy traders, do not make money. At the end of the day, they are still hesitating. Is centralized trading or light trading the right thing to do?
Since you can't make a lot of money with light positions, and heavy positions are always liquidated, you can't help but ask Qingtian Wine. Is the deal a dead end?
At this time, Lao Zhao, who has worked in the foreign exchange market for many years, could not remain silent. In the first battle of the decade, he experienced the baptism of the market shootout, the transition from heavy trading to light trading, and then back to the combination of light trading and heavy trading, and the transition from stumbling to profitable. I think he has the right to speak. And then he's going to come out today and break the truth.
The most powerful people in this world are often a combination of the real and the virtual. They bring together the positive and negative aspects of things in an appropriate way. The successful people we see are actually somewhere between the real and the fake. All people will go to extremes. They either believe that the East excludes the West, or that the West excludes the East. As a result, they are far from the center of the world, so they are mediocre. The same is true for foreign exchange trading.
Both of the above statements are correct, but they are not comprehensive and also point out the shortcomings of each other. Over the years, I have never seen people who only trade light positions make money, nor have I seen people who trade heavy positions make money. I've seen that the people who make money are the ones who take their heavy and light positions correctly. This is master. This kind of person is mysterious and unknown. If he explained to you what he did, the average person would think it was nonsense.
Alas, people like to hear certain lies rather than uncertain facts, just like most people think that market fluctuations are predictable, but they don't think that market fluctuations are random probabilities. Experts see uncertainty in the market. They only believe in probability. If they said that to a newbie, they would be seen as "blah blah". So newbies like analysts who pander to the public. At first, I couldn't think about it. Later, I discovered that newbies just want confidence and reassurance.
Frankly speaking, the position management of foreign exchange trading should be a combination of light positions and heavy positions, and maintain an appropriate ratio.
pros and cons
The transaction is light, the account funds are stable, the profit and loss have little effect on the mentality, there will be no demons, and it is easy to generate compound interest.
The advantage of heavy position trading is that the account can make a lot of money when the opportunity is seized, and the attack can be reversed many times when the opportunity is seized, so as to achieve the purpose of making money.
The disadvantage of light trading is that the profit and loss ratio is very small, so we cannot make a lot of money. However, the purpose of our investment in foreign exchange trading is to make a lot of money, to fight against attacks, not to play games, not just to make a little money, to make a little money, to work better.
The disadvantage of heavy position trading is that the profit and loss range is relatively large. Such frequent operations will rupture the position and soon the panties will be left behind.
To sum up, since there are good and bad, and there are also disadvantages, it is different to combine them.
The combination of light warehouse and heavy warehouse can realize complementary advantages, improve efficiency and develop healthily. Just like looking for a partner, the man makes money outside, and the woman manages the housework inside. Their function comes into play when you have both light and heavy positions in a trade. Light positions are for finding combatants, while outposts are for heavy positions. The purpose of the heavy warehouse is to find the main fighter's heavy troops to attack, one hit must win, and achieve a counterattack. I often see some old players, they are light traders, they dare not fight when they find a chance to win, and they make a small amount of money when they should be making a lot of money, which is really wrong. I have also seen some heavyweight traders think there is opportunity when there is no opportunity. They risked a lot of trading, and the consequences were dire.
Speaking of which, the interest of the observer should follow. I can't wait to ask, what is the appropriate ratio of light and heavy positions? When is the heavy position and when is the light position?
good question. When you know the answers to these two questions, your trading headaches will disappear. Since then, the former convenience is Sunshine Avenue.
About management:
I have always combined light and heavy positions. Usually, 95% of the trading list is light positions and 5% is heavy positions. Light positions are generally within 10%, and heavy positions are between 20% and 50%. For example, for $10,000, the light position is less than one lot, and the heavy position is 2-6 lots. The money I make every year comes from heavy positions, but it is usually not easy for me to do so, so the proportion of heavy positions is very small. I only do this when the chance of winning the lottery presents itself. Remember, heavy positions should only be used when the chance of winning is close.
I don't believe analysts who haven't done a deal are bullish on bullishness. I think it is a combination of a lot of light positions and a small amount of heavy positions. I usually run a lot of small orders for small orders. The purpose is to search for fighters according to the rhythm of the market. Actually, there are two states of seeing and doing. No chance just to see. Only by doing so can we find opportunities. When fighting, commanders always send squads of scouts to outposts to see what's going on on the battlefield, not just watch with binoculars.
Light Warehouse is a test operation. It makes a lot of money on a break-even basis. It is commonly used in conventional war method, data method, pound method and crude oil method.
In order to deal with the chance of high victory, the heavy position is to use high victory to increase the position, seize the opportunity to win in one fell swoop, and is usually used in special combat methods.
Therefore, in the transaction, the liquidation and heavy positions should be combined, the ratio should be reasonable, and the operation should be accurate. Light positions cannot make money, and too many heavy positions can easily get out of control. Therefore, in trading, we use light storage testing to explore methods, find out the market rhythm and search for opportunities, and attack aggressively when encountering excellent opportunities to achieve profit goals.
Whether it is liquidation or heavy positions, operations must be carried out within the scope of planning and control, and random transactions are not allowed. I also need to remind you that you should set a stop loss for every transaction, especially for a transaction with a large position, because even if the win will not be higher, the possibility of error is very small, so you must prevent small probability events from major mistakes .
If you want to become a Forex expert, you need to learn to be flexible and correct. If you are going to deceive yourself, you have to deceive yourself. A trader who knows the size of a winning position and takes the correct position to attack is a master. This is also the goal and the highest level for novices in foreign exchange.
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