Anyone who does not make money in foreign exchange transactions has a problem with position management

A friend said on WeChat that since he started trading, he has lost hundreds of thousands in the past few years, making small profits and big losses, and has not been able to make a profit so far. I have written a lot of trading notes, but I have not found a good way to stabilize it, and I am in distress.

I told him.Anything that doesn't make money in foreign exchange trading is a problem with position management, which is essential.Forex trading is not about technology, but about positioning.

Forex trading seems to be easy to make money, but there is no birthday girl. In the end, it is because the position is heavy and cannot withstand various fluctuations and sudden market conditions. There are always times when traders will trap themselves in it.

This is all kinds of frustration and blood and tears lessons, condensed into the text. In the end, doing foreign exchange is two words: position. If you want to add a modifier to the position, or two words: light position.

foreign exchange marketHuge profits exist. Huge profits survive for a period of time and cannot last long. We make huge profits by taking large positions and betting on large markets. Such markets are rare and difficult to grasp. On the contrary, the probability of wrong bets is particularly high.

In addition to light positions, all derivatives trading activities are bound to have a situation of small profits and big losses. No matter how high the technology is, or how much self-discipline, in the end we all find that there is nothing much useful except managing the position. Just because of three words: can't do it.

Why are there always small profits and big losses?

It's very simple, making a small profit and making a big loss is because you can't hold the profit, but you can bear the loss! Whether it's doing stocks, trading futures, or foreign exchange, a common rule is that everyone likes to run when they make money, and people are born with a safety need. When you lose money, you like to hold on to it, looking forward to a reversal in the market and a return to your money as soon as possible. Or you can increase your position in the same direction and pray for a reversal to return to your money. In the end, it became a Martin strategy. Encountered the big unilateral market of the quilt cover, the account died and suffered huge losses.

We should look at human nature in transactions objectively and not set too high expectations. Such a situation, from a human perspective, is almost impossible to solve. In other words, only a very small number of people have the ability to understand, to understand, to cultivate the nature of the mind, so as to elevate themselves to a stage of inaction-free transactions. Most of us do not have the ability to change the temperament of ordinary beings in the world.

Because there is human nature, so a small profit big loss is a high probability of inevitability. Objectively admit it, do not lose face.

How to solve the situation of small profits and big losses?

The obstacles of human nature are insurmountable, but there is no way to solve them. A roundabout solution is a way. If it is raised to the moral level, a roundabout solution to human nature problems is the middle way in transactions: time for space.

We can't solve the basic problem of anti-order and stop-loss. Is it? All trading stars still fail in the market,In the final analysis, isn't it because of anti-order and no stop loss?If it is done strictly, how can it withdraw from the market at a heavy loss?

So, it's still the same topic, how to do stop loss. It's an irresponsible attitude to teach others what they can't do. I also encourage everyone to think about stop loss for themselves, but this is not the focus of my thinking. My focus is how to solve the problem of non-stop loss in most cases and deal with the retracement problem caused by stop loss!

Exchanging time for space is our basic philosophy to solve the problem of stop loss.

The time in trading, in general terms, is the evolution of the market in the back and forth fluctuations. The so-called back and forth depends on the magnitude. Is it 10,000 points, 1,000 points of fluctuation, or 100 points of fluctuation.

Looking at the time frame over a long period of time, the fluctuations are at the level of two or three thousand points, and the time span is one year or more.

Looking at the time frame in the half-year cycle, the fluctuation is often within 500 to 1000 points. (Foreign Exchange School)