Auxiliary Stop Loss and Position Adding Are Also Forex Investment Techniques
Forex367
In Forex trading, the value of stop loss is obvious to all, but there are so many ways to stop loss. How to determine when stop loss should be carried out, and auxiliary stop loss in Forex trading.1. Larger loss method, this is a simpler stop loss method. Stop loss when the floating loss range of buying a Forex reaches a certain percentage. This percentage is determined according to your risk preference, Forex trading strategy and operation cycle. Once this percentage is set, it cannot be changed easily and must be implemented resolutely and decisively.2. Retracement stop loss. If the price first rises after buying, reaches a relatively high point and then falls, then you can set a stop loss target for the decline range from the relative high point. The specific value of this range is also determined by individual circumstances. Generally, you can refer to the percentage point of the larger loss method mentioned above. In addition, you can also add the factor of the decline time (i.e., the number of days). For example, set a 5% retracement within 3 days to stop loss. Retracement stop loss is actually more often used for stop-profit situations.3. Sideways stop loss in Forex trading. Set the stop loss target when the price moves sideways within a certain range after buying. For example, you can set a stop loss when the increase does not reach 5% within 5 days after buying. Sideways stop loss is generally used together with the larger loss method to fully control risks.Adding a position is an investment technique, a tool, not a purpose. The purpose of investment is to obtain returns with less risk. Therefore, it is valuable only when adding a position can help investors achieve the above goals. Otherwise, it must be discarded. This is just like what the Diamond Sutra says. All laws are metaphors and should be discarded, let alone illegal ones.There are usually several situations where you need to add a position: .1. If the funds are too large, it is likely to be discovered when you enter the market. Take Qianmai as an example. If you open more than 150 at a time and do this for several consecutive days, you will easily be targeted and eaten by institutions. At this time, you must adopt the technique of breaking up the position into parts.2. When changes in the fundamentals are discovered but the technical aspects have not yet been reflected - as we all know, the speculative market is not always rational and often has an emotional side. For example, when the fundamentals are good, the graph will often shake again and may even fall, and vice versa. At this time, if you want to occupy a favorable position but are unwilling to take more risks of shocks, you must adopt the technique of investing in batches.The pyramid method of adding positions is usually used. Taking long as an example, you buy a part at the bottom, such as 80 lots. When the market reaches a certain position, you buy another 60 lots. As it rises again, you buy another 40 lots, and so on. In this way, because the number of low-level purchases is always more than that of high-level purchases, you can always ensure that your position cost is lower than the average market price.
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