ATFX - Escape Plan for Forex Traders

atfx- Whether it is foreign exchange, indices or individual stocks, this is an unanswerable question for me. Usually I say "I don't know either," or "go up (down) until you can't go up (down) ". People who hear this answer usually have two reactions. The first is to scoff, thinking that my analytical skills are not good enough, or they are secretly displeased, thinking that I have a good idea and don't want to tell others.

　　These two reactions often leave me helpless. First of all, if investors want to study the performance of price forecasters in depth, I suggest you can make statistics on the predictions of specific people to see how his predicted value differs from the actual performance? What is the average error? What is the probability of being correct?

　　As you can see, the vast majority of price predictions are inaccurate. This has nothing to do with the ability of the analyst, but forecasting itself is an impossible task. A responsible analyst should provide clear presuppositions and infer current market trends based on them, and then advise the reader to follow the trend.

　　A good analyst guarantees you a higher chance of winning, but never offers a touch of gold magic. If you think you shouldn't ask the weather bureau to tell you what time and how much rain will fall today, you shouldn't expect an analyst to be able to predict exactly where prices will go up (or down). Second, as a trader, I never set any preconditions for the market, that is, in the decision-making process of professional operators, I should not spend time predicting the market, but should focus all my efforts on measuring the actual trend. Far from being helpful, preset target price areas often expose operators to premature outages, lost potential profit opportunities, and even the consequences of counteracting the trend and incurring serious losses.

　　In the systems of successful operators at home and abroad, there are clear entry and exit principles. But it is rare to see anyone who can really make a lot of money by predicting the price in advance. Every operator's primary concern should be whether he is standing in the same direction as the market trend. As long as he keeps checking the matter fairly and objectively, he will not miss it when the market reverses.

　　In other words, the ability to accurately predict the price is not the key to the success of the operator, but a solid entry strategy and operation discipline are the real keys. Those who want to be foresight operators, I respect their courage, but we pursue a low-risk, stable profit operation strategy. As for the job of guessing the bottom line, it is left to the stunt masters to play.

　　Investment analysis is a science, not a metaphysics, so we need to get used to looking at it from the perspective of scientific research.

　　In the scientific method, everything happens with presuppositions, and then we analyze various possibilities of how things will develop in terms of probability. So we often see all kinds of things in our daily life: various numbers, survival rate, crash rate, success rate, rainfall; probability and so on.

　　We must first make it clear that price analysis is itself a science, so price changes must also have presuppositions, and cannot be 100% accurate. When the presuppositions change, or there are unexpected events that exceed the expectations of statistical analysis, the original inferences must also change.

　　Therefore, no matter who you accept the investment advice and decide to buy or sell, you must have a risk control plan and a stop-loss strategy. If you are only filled with anger, reluctance, reluctance, and confusion after the investment advice you follow loses money, and you cannot deal with it decisively, you are likely to have regarded the analyst as a fortune teller with a crystal ball.

　　No foreign exchange trader can win every battle. However, the practice of making more and less money and decisively stopping losses has made the operation performance of professional traders and the general public completely different.

　　Ordinary investors often buy according to the entry advice, but are unwilling to go out decisively with the exit order. If this mentality cannot be improved, even the investment advice given by the world-class trader king can still make you face losses. Once again, professional operators always have "escape plans". If you always ignore these escape plans, you will waste valuable resources.

　　In a rapidly changing modern society, information is the most precious resource, but if it is not used properly, it can have negative effects. Every analyst is happy to share his research results with investors, but if investors can have reasonable expectations of these research results and maintain a risk control concept, they will be able to maximize the benefits of these analysts' hard work and help you go more smoothly on the investment road.