Practical Tips for Forex and Gold Trading

Greed is the truest enemy, contentment is the eternal friend. An investor invests to make money, and making money is the way to go.

1. Learn to establish positions in spot accounts, stop losses and close positions with profits:

"Establishing a position" means opening a position. After the market opens, the spot products purchased are called long positions, and the spot products sold are called short positions. Choosing the appropriate spot product to establish a position is the prerequisite for profitability. If you enter the market at a good time, you have a greater chance of making a profit; on the contrary, if you enter the market at a bad time, you are prone to losses. "Stop loss and liquidation" is a measure taken to prevent losses from being too high after a position is established.

2. The principle of "pyramid" overweighting:

The meaning of "pyramid" overweighting is: after buying a certain product for the first time, the product rises. Seeing that the investment is correct, if you want to increase your investment, you should follow the principle of "the amount added each time is less than the last time". In this way, the number of incremental purchases will become less and less, just like a "pyramid". Because the higher the price, the greater the possibility of approaching the top of the rise and the greater the risk. At the same time, buying when it rises will cause the average cost of longs to increase, thus reducing the yield.

3. The principle of not adding more money when losing money:

After buying or selling a product, when the market suddenly advances in the opposite direction, some people will want to add more money, which is very dangerous. For example, when a certain product continues to rise for a period of time, traders chase the high and buy the product. Suddenly the market reversed and plummeted downwards. Seeing that the trader was losing money, he wanted to buy an additional order at a low price in an attempt to bring down the average price of the first order. When the market rebounded, the two orders were closed together to avoid losses. Be especially careful with this overweighting approach. If the spot price has been rising for a period of time, what you bought may be a "top". If the more it falls, the more you buy, and you continue to increase your position, but the spot price never turns back, then the result will undoubtedly be a vicious loss. It was under this mentality that Leeson crossed the famous Barings Bank.

4. Do not participate in unclear market activities:

When you feel that the market trend is not clear enough and you lack confidence, it is better not to enter the market. Otherwise it is easy to make wrong judgments.

5. Establish a position when the market breaks out:

The market situation refers to the cowhide market, with narrow volatility. The market situation shows that buyers and sellers are evenly matched and temporarily in balance. Regardless of whether it is a rising or falling session, once the session ends, the spot price will break through and move up or down, advancing in a breakthrough style. This is a great time to enter the market and establish a position. If the market is bullish for a long time, the position established when the market breaks through has a greater chance of making big profits.