To make money from foreign exchange speculation, you must first learn to control losses

Many experts in foreign exchange speculation have examples of heavy losses when they first entered the foreign exchange market. It's just that they found the reason for their mistakes and tried to avoid such mistakes in their future trades. This way they succeeded. Friends, if you want to invest in foreign exchange, please learn to control your losses first....

Many friends are very careful when starting to speculate in foreign exchange, so they can always make some small money. They often make dozens of points each time, but let go of a big market of hundreds of points. The next time the exchange rate is already very high, he often thinks in his heart, I have to grasp the big market this time. Little did he know that the market was approaching the top of the stage at this time. The mood of wanting to earn a few hundred points controls him. Originally, there was still room for dozens of points above the market, but he wanted to do a long-term job. If he didn't earn a few hundred points, he would not leave the market. As a result, not only did he not earn dozens of points, but he was trapped and lost instead of winning. The market sometimes plays tricks on people like this.

Huimin friends often do this. After buying a currency, the exchange rate falls sharply, so they quickly stop and leave the market. The exchange rate continues to fall, and they are happy! But a day or a few days, or even a few hours later, the exchange rate suddenly rebounds, rises sharply, making it too late for you to buy again, and it is higher than the price at which you stopped. What if you didn't stop your loss just now, there is still a profit? After a few times like this, there is no concept of stop loss. After tasting the sweetness of non-stop loss a few times before, you always stop your loss, thinking that the exchange rate will return to the price above the price you bought sooner or later. After being trapped by a few hundred points, you may be unable to resist it and stop your loss.

In this way, I lost all the small money I made a few times before, and lost money. In my lecture, I told Huimin friends a lot about the necessity of stop losses. How to stop losses and stop wins? When to stop losses? When not to stop losses? When to stop losses resolutely? When to stop losses? How to set up stop losses? The most difficult thing to learn in investing is stop losses. I deeply feel the lack of books on how to stop losses in the market. Even if there is, it is not explained clearly to Huimin from the perspective of actual combat. It is just a general concept, which is far from actual combat. So I came up with an idea to write a separate chapter dedicated to the skills of stop losses and stop wins, and strive to write the use of stop losses and stop wins clearly, clearly, and operable.

Remember when I first enteredforeign exchange marketI met my big brother, a once famous trader. He followed Soros to attack the pound in 1992. The first thing he said to me when he saw me was: How much are you going to lose and stop trading? I remember clearly at the time, thinking I heard it wrong, and asked him to repeat it. He said sternly: I'm asking you, how much are you going to lose and stop your losses? My answer is: I came to make money in this market, didn't many people make money in this market? My big brother told me that doing foreign exchange speculation is an investment. Any investment is risk-conscious. Some people lose money in every industry, some people make money, or everyone is Gates. In this risky industry, there is no one who has never lost money. Everyone who can survive in this market should first learn how to control risks, in other words, how to control losses.

My eldest brother told me a story. This story gave me a lot of inspiration in my foreign exchange career. This is a true story. The protagonist of the story is a native of Nanjing, who does foreign exchange margin trading. At first the funds were equivalent to 1 million RMB. He kept trading, and soon his funds increased by more than 10 times. At that time, his mother advised him to keep a sum of money because she knew the speculative and risky nature of the industry. But the son's mind was already swollen at that time, thinking that he was a genius in this market, and making money was as easy as drinking water.

He couldn't listen to other people's advice at all. At this time, he impatiently gave his mother 2 million RMB. In 1992, 2 million RMB was a large sum of money and could be called a rich man. He said that this was his son's retirement money to honor you, and then he didn't go back to the foreign exchange market. In July-August 1992, he had been holding a long position in the pound, and he also used the money he earned to increase his position at a high level. Hold a large position in the pound.

In mid-September 1992, for many foreign exchange speculators, it may have been hell or heaven. A man named Soros attacked the pound and became famous. He successfully blocked the pound, and the pound fell sharply. Britain was therefore forced to withdraw from the European Monetary Mechanism, so much so that today when it comes to sterling joining the euro zone, many people still hold different opinions. When the pound fell, this man still stubbornly held the pound, and believed that according to convention, the foreign exchange market would not fluctuate more than 200-300 points a day, so he kept reporting the pound, waiting for the pound to rebound.

You know, the pound kept falling sharply that day. In the blink of an eye, he had lost 50% of his funds. At this time, if he still had time to stop his losses, after all, he still had half of his funds. Keep the green mountains, not afraid of running out of firewood. In the case of losing so much, he still reported a fluke, thinking to himself, not so, there should be a rebound? It has fallen so much, maybe it will go back up in the US market. As a result, he firmly held the position of the pound and did not stop the loss. The market did not change his will. The exchange rate triggered a new round of decline. Finally, he made a serious loss and was forced to give up. Because this was also his helpless choice, his account had been wiped out.

In the foreign exchange market, you are not afraid of making mistakes, but you are afraid of not admitting your mistakes, and the market will die. If this friend stops his losses when he loses 40%, he still has 60% of his capital. If he stops his losses when he loses 80%, he still has 20% of his capital. It's not all lost, right? You still have the ability to survive in this market? If you lose all, how can you survive in this market?