In order to survive in the foreign exchange market, you should learn to do a good job of risk control

No matter how awesome Forex traders must have a strictly enforced risk control strategy, human nature is greedy and untrustworthy, and third-party risk control systems should be used whenever possible.

A mature and detailed trading system is an important tool to restrain your human weaknesses, so that you will not be easily emotional and will not trade based on your feelings. However, this is not enough.You need to rein in your power.Lock the power in the cage, because although you have a system, but whether you implement it or not, it is still your own power, you still have the power to execute and not to execute, and how to execute it: you are both an athlete and a referee, how can you avoid you not favoring yourself? The three powers are not separated, as long as you have the power, you are easy to lose your sense of profit, so you need the power to supervise and be supervised by others; you are an analyst, do your own risk control, and you are a trader. How can you ensure that you will implement risk control and discipline?

You need a third-party independent risk control person to control your risk, to stop your loss for you, to do position control for you, when you don't want to stop your loss, he has the right to cut your position, when you have a large position, he has the right to refuse, limit your position, or cut off part of your position, when you find that you are out of control or lose more than a certain number, he has the right to close the account, stop trading,,, etc., afraid of your accidental irrationality, dizziness, and lead to a lifetime of destruction. So almost all formal private equity institutions, fund institutions, and asset management companies will have a third-party independent risk control department. The third party will restrain the investment team, which is to take into account the weakness that human nature cannot always be rational.

In addition to third-party constraints, to survive in trading, we need to allocate assets to avoid the tragedy of huge losses

Many people have misunderstandings, mistakenly thinking that the better traders are trading for themselves, not for others, not for institutions, this is not correct. Buffett is good or not, but he still runs a company and trades for others. Of course, on the one hand, he runs a company, which can increase the scale of funds and improve his money and reputation. On the other hand, the company is a team, relatively formal, and there will be special risk control, research, trading and other independent departments to control risks. Another point is that even if you lose money, you will lose money to the customer, and your money will not be lost. It is the best risk control for yourself, and it is not easy to lead to your own bleak end.Those who take this path also persist the longest, not because they cannot make money for themselves, but because they want to defuse risks and avoid tragedies.

For transactions, one person alone is not enough, it is difficult to last long.Because a person is prone to loneliness, isolation, and paranoia, and this lonely life may lead to loss of reasonIn the absence of third-party constraints, you will be vulnerable to the tragedy of a mistake that will last forever.

Of course, when your money is not big enough, you can't afford to hire independent third-party constraints, lack of constraints, but after you make money, you make a rule, after making money, extract part of the profit, go to the bank to deposit regularly, buy regular bank financial management, or continue to buy houses, etc., or buy various medical, trading insurance, family trusts for your children and family, disperse asset allocation, these funds that are not easy to liquidate, will make you irrational when you can't cash out the funds, even if you lose, you still have a lot of time deposits, financial management and several houses, so as not to fall into ruin and avoid tragedy.

50 million and 100 million, 100 million and 200 million, for a person's life, there is not much difference, the marginal utility of funds is rapidly declining. But 50 million people, and 100 million people, lose 50 million at the same time, the former will have nothing and live in poverty, while the latter will still live in wealth and freedom.