GMI foreign exchange trading experience: a model for communicating with experts

Every time I close a trade, I contact an experienced trader friend and tell him my entry time, position, entry price, and position squaring price. Usually he will ask me the following questions:

1. What is the maximum loss and where is the stop loss? If it is no more than 50 points, he will give approval; if it is less than 30 points, he will give good praise.

2. How many points have you made a profit? If it doesn't exceed 50 points, he will feel that it's not worth it to earn so much for half a day; if he earns 100 points, he will say it's about the same; if he earns more than 200 points, he will say it's good, and look forward to when he can earn 500 points.

3. If it is an empty order, whether the price is rising when the position squaring. If the price is still falling, even if it is flat at the lowest point, he will say that in a falling market, how do you know that it is the lowest point. If the price rebounds 50 points from the low point and the momentum is strong, then the position squaring is not a mistake.

4. Holding time. If you can hold it for more than a week, this operation is good. After one month of operation, I will report to him on the situation of the month.

(1). How many orders have been placed in total this month. If it is more than 10 times, he will say that I am working for the trading platform. The platform must be very happy, and there are so many opportunities. About 10 times is more reasonable. If you can only place 5 orders a month, it is more ideal to have a total of 500 points.

(2). Whether to add a position. If a single order earns 100 points, you can consider adding a position once. He mainly does mid-line operations and is not suitable for short-term transactions.

The operating mode I am currently using:

My idea is to set a 70-point stop loss. If the stop loss is triggered, the position squaring. If it is not triggered, it will be firmly held. Open a lot for every $500, which is 10% of the position. The market law is that about 1/2 of the time the price will fluctuate sideways, 1/4 of the chance to rise, and 1/4 of the chance to fall.

When looking in the wrong direction, resolutely stop the loss, and stick to it once you see it right. The current psychological state is not ideal, and you can only get 300 points at most. In the case of looking right once, you can catch about 100 to 200 points on average.

In my operation, only about 20% of the successful orders (more than 50 points of profit) will be stopped (2/3 of the stop orders have less than 50 points of profit). My idea is that there is only a 1/4 chance of seeing the other party and not being stopped, so you must make enough money at one time. As long as you grab 500 points, you can double your capital.

The probability of liquidation is:

(500-120)/70 = 5.4, that is to say, if I have 5 consecutive stops under $500 and lose 70 points, I am on the verge of liquidation. This probability is 1/2 to the 5th power, which is 1/32. There is a possibility of liquidation in 32 consecutive operations, and the chance that I can seize 200 points in 32 operations is 32/4 = 8 times, 200 * 8 = $1600. According to this idea, starting from $500, in 32 operations, I can earn $1600, and I may lose 70 * 32 * 1/4 = $560, resulting in a net income of about $1040.

I don't rely blindly on trend analysis, nor do I deliberately do trend analysis, but use a systematic operation method. I operated 16 times last month and 10 times this month. Theoretically, the profit should be 1040 * 26/32 = 845, and the actual profit is 1041-414 = 627. This shows that I still have too many redundant actions, and the number of orders placed is too frequent. I should reduce unnecessary operations by half. At the same time, what needs to be strengthened is to try to make a profit of about 400 points in one position, so that the probability of making money will be greatly increased. The choice of entry points is also very important, but it is not my current focus. The amount of funds is small, and the operation of homeopathic position addition cannot be completed. Pyramid-term homeopathic position addition is an ideal form of medium and long-term operation, and it is still in the process of learning.

My operation is not to try to violate the laws of the market (there is only a 1/4 chance to look at the opposite direction), but to use this 1/4 chance to reasonably control the risk and reward ratio in order to achieve profitability. Those who are obsessed with trend analysis and believe that they must achieve a 75% or more chance of profitability are actually fighting against the 1/4 objective law of the market, which is as difficult as you can imagine. There must be very few people who can achieve stable profitability, and they will find the market difficult to control. I will not fight against the objective law, but carefully observe it, analyze it, and use it. Many people who are passionate about trend analysis have difficulty stabilizing profitability precisely because they are fighting against the 1/4 chance of profitability. I plan to withdraw 10% of the capital when the capital reaches $10,000, and then withdraw 10% of the capital every 10 times. The remaining money is just numbers to me, and I will continue to play this number game with this model: follow the trend, reverse the trend, and catch the bottom.