No matter what the investment market, foreign market domestic market, whether it is commodity investment or futures investment, the investment strategy is the same.
The foreign exchange market is no exception.
Although some investors have their own set of investment strategies, the basic investment strategy of foreign exchange remains the same.
The following FinanceWord small series introduces the basic strategy of foreign exchange investment.
The funds used for investment can only be idle excess funds. If the investor is invested with the necessary funds of the family, if the loss occurs, it will directly affect the living standard of the family. Moreover, if the investor is invested with this fund, it will be at a disadvantage psychologically.
Know yourself and your enemy. The emphasis here is more on confidants, because the market is the most volatile, so the only one who can better judge is ourselves. We believe that people who are impulsive and emotional and not good at controlling themselves are not suitable to enter the investment market, especially the foreign exchange market.
If we want to enter the foreign exchange investment market, we need to control our emotions, be disciplined, and be able to control ourselves effectively.
Don’t change your mind easily.
The trading plan should be made in advance, and the price of the day should be determined in advance. The temporary decision should not be made because of the temporary rise and fall of the price, because it is normal for the price to rise and fall over a period of time. If you see the price and the information in the market to decide the operation behavior, it is very dangerous.
For foreign exchange investment strategies, although there are some differences between different investors’ strategies, but there are some basic similarities.
Let’s take a look at the basic strategy of forex investment.
1. Invest your spare funds.
If an investor invests in foreign exchange at the expense necessary for family life, in case of loss, it will affect the investor’s daily livelihood and increase the investor’s chance of failure in the market.
The investment with a sum of money that is not originally invested will cause a kind of pressure to the investor. At this time, the judgment of the investor will be affected, and it is difficult to make an objective and calm decision.
2. Try not to overtrade.
If you want to be a successful investor, you should always have enough money to cope with price fluctuations.
Once the problem of insufficient funds occurs, it is necessary to minimize the sale and purchase contracts held at hand, otherwise it may be due to the lack of funds and through the creation of funds, even if they can prove that their vision is good.
3. Look at the market, don’t be emotional, and don’t have illusions.
A hopeful person, he is a happy and unhappy person, but he is not a good candidate for investing, because successful investors can separate emotion from trading.
4. Don’t be blind.
If you want to be a successful investor, don’t blindly follow what others say.
If everyone thinks it’s time to buy, many investors are likely to follow suit, and successful investors are likely to wait for an opportunity to sell.
This is very similar to the contrarian principle, for the right investment is still helpful.
5. Know your enemy.
Investors should know their own personality, emotional or impulsive people are a good fit for investing.
Investors should be able to control their emotions and effectively restrain themselves, which is very helpful to help their investment.
6. Learn to say no to others’ opinions.
If investors have a basic judgment about the direction of the market, then don’t let others influence them to change their decisions.
Sometimes you may change your decision because you think someone else’s opinion is more reasonable, only to find out that you made the right decision.
Simply put, the opinions of others can be referred to, their own opinions are the need to adhere to.
7. Make quick decisions.
In the foreign exchange market, there are many psychological factors that may lead to the failure of investment. The most common one is not the fluke mentality, but the hesitation of investors. As a result, the investment may lose more funds because of not making the decision in time.
8. Don’t change your mind easily.
Investors should first set the price and plan to enter the market that day, and do not make changes easily because of sudden price fluctuations. Investors’ temporary decisions on the change of the price and the disappearance of the market are often more dangerous.
The above article introduces some basic strategies related to the forex market, which is helpful for people to become more familiar with the forex market.
Of course, there are many trading strategies in the foreign exchange market. If you want to know more about them, you can pay attention to our website FW Finance.
