How to effectively make money is the core issue that owners are concerned about.
In order to achieve effective profit investors should not only have excellent foreign exchange trading technology, but also have the experience of risk control.
Stop loss is one of the methods to control the risk of speculation foreign exchange must master.
1. The stop-loss method Investors should clearly plan how many points they will lose before entering the market.
This is a good way to manage money, but it’s also mechanistic, so the only way to use it is to have a winning pattern of 60% or more and to make sure that the total number of points earned is higher than the total number of points lost.
Secondly, it is necessary to have a deep understanding of the volatile nature of the market operation and a comprehensive judgment of the market trend.
2. Programmed stop-loss method Programmed indicators are indicators designed by traders themselves based on price, time, money and trend, and then buy and sell according to their own indicators. When the indicator no longer exists a buy or sell signal, they immediately stop or exit the trade.
Its ADVANTAGE IS THAT IT CAN OVERCOME HUMAN FRAILTIES. As long as the indicator does not signal that it is buying or selling again, there is no reason or reason to stay in the market. Cut your gains or losses immediately and wait for the next opportunity.
3. Technical stop-loss method More complicated is the technical stop-loss method.
It is a combination of stop-loss setting and technical analysis. After removing the random fluctuations of the market, stop loss orders are set at key technical levels, so as to avoid further expansion of losses.
This method requires investors to have strong technical analysis ability and self-control.
Technical stop-loss methods are more demanding to foreign exchange investors than previous methods, and it is difficult to find a fixed pattern.
There are also several more flexible stop-loss methods, which require investors to make their own flexible response to the trend in time.
Initial STOP-LOSS A STOP LOSS AT, SAY, 3% OR 5% BELOW (SHORT TERM, NO MORE THAN 10% MID-TERM) THAT IS SET IN ADVANCE OF THE PURCHASE OF FOREIGN EXCHANGE AND THEN EXITS THE MARKET AS SOON AS THE PRICE EFFECTIVELY FALLS BELOW IT.
When we talk about an “effective break,” we usually mean 20 to 30 points.
2. Once the break-even stop loss method is long and the price rises rapidly, the initial stop loss price should be adjusted immediately and the stop loss price should be moved up to the break-even price. This method is very suitable for actual combat operation.
3. The trend stop method takes an effective trend line or moving average in practice as the reference coordinate, observes the price movement, once the price effectively falls through the trend line or average, then exits the market immediately.
4. Unconditional stop loss method regardless of the cost, the way to escape the stop loss is called unconditional stop loss.
When the fundamentals of the market have taken a fundamental turn, foreign exchange investors should abandon any illusions, regardless of the cost of the fight, in order to preserve strength, choose the opportunity to fight again.
Changes in fundamentals are often difficult to reverse.
When the fundamentals deteriorate, investors should take prompt decisions, cut down the warehouse out.
The above is a forex trader must know the method of stop loss, hope investors can be flexible to use these methods when trading.
