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How to set the correct stop loss in foreign exchange trading

{}Posted in2023/2/25 13:39:39 | 5Browse

Why set a stop rebatesforexbroker? The fxrebatecentralvestment itself best forex rebate company not risky, out-of-control investment is risky cashback forex to control investment risk, stop loss is vital stop loss is far more important than profit, because at all times capital preservation is the first, profit is the second, the establishment of a reasonable stop loss principle is quite important, the core of the principle of prudent stop loss is not to let the loss continue to expand. Investors want to control investment risk, just keep an eye on the stop loss, as long as the price is less than the stop-loss point, we have been holding, do not pay too much attention to the bestforexrebatecompanyecific fluctuations, too concerned about fluctuations will make the mind also fluctuate non-stop stop loss is relatively static, controllable, the controllable nature of the stop loss can make us maintain a good state of mind investors sometimes set the stop loss may be wrong wrong stop loss we should also be open to accept, the stop loss is a Cost, is the cost of finding profit opportunities, is the price that must be paid for trading profit, this price is only the size of the difference, there is hardly a right or wrong, the investor to profit, you must pay the price, including the price caused by the wrong stop loss frankly face the wrong stop loss, do not avoid, not to mention the fear, only then, in order to trade normally, and ultimately profitable (2) how to set a stop loss? All the stop loss must be set before the transaction, in the loss then consider the use of what standard stop loss is often too late to set a stop loss specifically the following three methods: ① fixed stop method at present, many of the best foreign traders are using this stop-loss method it refers to the amount of loss is set to a fixed percentage, once the loss reaches the proportion, no matter what price are immediately stop loss to close the position fixed stop loss has obvious The key to mandatory fixed stop loss is the setting of the stop-loss ratio which varies depending on the investors mindset, affordability, profit expectations, different varieties or different operating times ② technical stop-loss method which is the most commonly used mode of operation in the real world This method is a combination of stop-loss settings and technical analysis, after eliminating the random fluctuations in the market, set a stop-loss order at key technical levels to avoid losses Further expansion of the investor through the analysis of the currency price operation pattern, once found that the exchange rate is broken, that is, after the important support or resistance level is broken, then firmly stop-loss in setting technical stop-loss, pay attention to the following points:. Determine whether the market characteristics belong to the trend market or range market;. A good stop loss price is predicated on a good opening price;. The stop loss can be moderately relaxed for uptrend operations. For positions with a high probability of going up, the stop loss can be relaxed appropriately;. Stop-loss range can be relaxed for positions in the range market;. Down in the process of grabbing the rebound counter-trend operation stop-loss range should not be too wide ③ self-tolerance limit reached after the stop-loss in short-term operations using this stop-loss method to improve the rate of return is helpful In fact, some of the best foreign traders also often use this type of approach specific use is: when the investors position part of the loss, as long as the investor can still afford to hold its part, otherwise immediately stop loss out of the field Even if the investor is just established position this method is suitable for same-day short term trading, but also suitable for the market has a lot of experience in the trader, and novice in the use of the high and low often in the exhibition swing out of the 6. correct handling of the margin and open positions. The risk of margin trading is mainly reflected in the relationship between the amount of money in the investors margin forexrebatecommission and the number of open positions brought about by the different risks First, we look at the number of open positions and the relationship between the risk of margin trading For example, a foreign exchange dealer to provide mini (mini) account and standard account two kinds of margin accounts. The minimum number of open positions in the mini account is 10k, in the opening of 10k positions, the exchange rate fluctuations of 1 point, the account bear the risk of $1; standard account minimum number of open positions is 100k, in the opening of 100k positions, the exchange rate fluctuations of 1 point, the account bear the risk of $10 The same is 100 times the leverage, why the risk of mini account than the standard account risk is small? The reason is that the larger the number of open positions, the greater the risk the account will bear. Therefore, foreign exchange margin investors should determine the size of their open positions according to the balance of their margin account Secondly, lets look at the relationship between the amount of open positions and the funds in the foreign exchange account in addition to the margin how the difference affects the risk of margin trading For example, if we open a position of $10,000, the account leverage is 20 two 1, the total amount of funds in the foreign exchange account is $2000, then in addition to the margin we also The remaining $1500 available funds, assuming a trading volume of $10,000, the profit and loss of each point is $1, due to the available funds of $1500, the investor can lose up to 1500 points, and the general currency portfolio of the daily fluctuations of 20-300 points, even if the maximum loss occurred that is 300 points, the impact on this account is not large, so this trading volume is relatively safe if The number of our open positions is 20,000 USD, the account leverage is 20:1, the total account funds is 2000 USD, then in addition to the margin we still have 1000 USD available funds, if 10,000 USD trading position, the profit and loss of each point is 1 USD, then 20,000 USD trading profit and loss of each point is 2 USD, for 1000 USD available funds, the investors trading can lose up to 1000/2 = 500 points, if the day the maximum loss of 300 points, then only 200 points can be lost, so the impact on the foreign exchange account is relatively large, this situation belongs to the capital management is unreasonable Therefore, investors should focus on the relationship between the amount of open positions and the number of foreign exchange account funds in addition to the margin, in order to reduce the risk of margin trading at the same time, the flexible use of high leverage investment, improve the convenience of funds Efficiency of the current market foreign exchange trading platform, investors can use up to 200 times the leverage to buy and sell, and the use of automated procedures to ensure that investors do not lose more than the funds placed in the account account margin percentage level all recorded in the system, the trading platform can be in accordance with the situation of each account, real-time calculation of the funds required to hold positions (occupied margin) and the funds available to establish new positions (available The balance, net value and profit/loss information calculated in real time are displayed in the account window together with the available margin. When the account exceeds the maximum permissible leverage, the broker or the banks trading department has the right to liquidate some or all of the positions in the account. Investors must monitor the margin in the account to ensure that they can stop losses at their own discretion, especially in case of high market volatility.
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