Foreign exchange trading capital management in the truth and lies
- 2023/2/25 3:01:04
- read: 4
mentioned capital management forex forextradingtime session times also considered the same old story, each trader is very clear inside the key to successful trading capital management is also an important part of the perfect trading system indispensable in margin trading according to the size of different leverage risk is also correspondingly magnified, futures on average 10-20 times leverage, foreign exchange spot virtual plate usually 100-400 times, the risk It can be seen in general so we often hear forex veterans often say to light positions, more stop-loss but even light positions + stop-loss may cashback forex take you into the hall of success, this is why? Now lets uncover the real lies in money management strategies! Forex Academy www.waihuibang.com/fxschool/(a) lose at the starting line forex market survival light position + stop loss, is this true? Yes, the importance of light positions forextradingmarket stop losses can be seen in general, but the preaching of the teachers whether the correct understanding of the nature of money management? Answer: not also give a simple example? Light position, what is the degree of light position? If you have $ 1000 (which is also the starting capital range of most beginners $ 300-2000) opened a $ mini-account, then the minimum contract is 10K that is, 0.1 standard lot according to the teachers said 1000 $ should only operate 0.1 lot can not be higher then OK, we also recognize that this ratio is correct, then ask, mini-account minimum unit 0.1 lots, you only trade 0.1 lots each time, how to solve the problem of reducing and filling positions? There is and only one answer: increase the size of the margin to reach a single transaction of 0.2 lots of capital assuming that 1000$ vs 10K is an acceptable ratio, then how many naked swimmers in the sea of exchange with 500$ or even lower capital to play 0.1 lots of transactions? Careful readers may find how not to mention the leverage ratio, yes leverage size actually has nothing to do with risk, 400 times or even 1000 times in the capital size and the minimum contract match can also be traded when you use a very small amount of money hoping to make a big deal with a small amount of money, let alone whether to comply with the rules of money management, 500 $ or 1000 $ you can accept when trading 0.1 lot account how much loss? How much money do you have to cover your positions when the opportunity arises to increase your profits? Think about the institutional investors have strong capital whether from risk control or trading opportunities to grasp are far stronger than our retail investors, huge funds in the fight can enter and exit freely, while our single position of 0.1 hand can withstand the wind and waves of the sweeping plate it please remember that money management first do not consider those specific rules and content, first of all the first, do not lose at the starting line who do not like to win the feeling of the starting line, the battle has not yet The battle has not yet started you have already won the opponent, which is called not to fight but to yield to the army, the upper strategy of the Art of War is also given below to win on the starting line of the proposed trading mini account (10K), the minimum contract 0.1 standard lot, the recommended minimum margin of $ 5,000; trading minimum position of 0.2 lots; trading micro account (1K), the minimum contract 0.01 standard lot, the recommended minimum margin of $ 500; trading minimum position 0.02 lots (B) good keeper, stop loss and money management if you have won on the starting line then congratulations, you can start the second lesson of money management safety first in the foreign exchange margin market the first rule to live, the second or live, only live you have the opportunity to win, as long as you live longer than the novice experienced how to live it, the secret only two stop loss + reasonable position no Stop loss risk will be magnified, until your psychological defenses collapse, let the growth of loss positions, the fate of the market to master no reasonable position that position management, will also increase the risk of trading, several consecutive profits after the Pandoras Box will open for you I have many friends with the ability to double their funds several times a day, but they have never been able to get rid of the burst position control unfavorable and stop loss is not determined reasons, there are a thousand reasons, the wrong things will not discuss, or now to discuss the correct method on the stop loss, including the loss of each transaction, stop-loss orders and the maximum daily loss amount of each transaction should not exceed 3% of the maximum loss, preferably controlled at 2% or less to 1000 $ micro account for example, the calculation of the work formula is as follows: 3% of the maximum tolerable loss of a single micro account (each point value) 0.1$), loss of funds 10003% = 30$; points 30/0.1 = 300pips trading opportunity A: loss of 30 points, profit 60 points, profit-loss ratio 1:2, position 0.05 lots, loss 15$ = 0.1$ x 30pips x 5, this is a beautiful trading opportunity B: loss 80 points, profit 240 points, profit-loss ratio 1:3, position 0.05 lots, loss of $40$=0.1$x80pipsx5, although the profit/loss ratio is high but if the loss suffered by the trade failure is $40$ more than the maximum $30$, this trading opportunity should be abandoned or its position should be adjusted as follows: Trading opportunity C: loss of 80 pips, profit of 240 pips, profit/loss ratio 1:3, position of 0.03 lots, loss of $24$=0.1$ x80pipsx3, the trading opportunity remains unchanged only the position is adjusted so that it can meet the requirements of money management after the formulation of a good money management strategy for each trading opportunity to filter, and then good opportunities if not in line with the rules of money management also do not trade Of course you can adjust the size of the trading position according to the ratio of funds to adapt to the requirements of trading opportunities provided that your margin size must be large enough to I have a friend who lost 100$ in his mini account and was persuaded by me to switch to a micro account, but he did not increase the margin rules and only used 100$ to trade with such a size of capital to lose from the start, how can he win the final victory? It seems 100$ to 140$ not much money, but the return ratio is 40%, the position is certainly heavy, but how can, 100$ itself reached not micro account minimum capital size, not to mention the money management strategy (C) good attacker, the new solution to money management do not know whether we agree with the 28 law, that is, 20% of the opportunity to create 80% of the revenue, used in the business field is 20% of the customers to create I believe this is a law of nature we can not violate from our trading records to observe whether 20% of the trading opportunities to create 80% of the returns? I believe it is difficult for someone to make to be 2:98 law often occurs, that is, one or two transactions to all the profits and capital eaten again to the issue of win rate, all trading systems win rate of 40%-60% of this range I designed and tested a lot of trading model win rate are in the 50% strong, and each transaction are using the same position, the final statistics down a single Trading profit is only 10-15 points of profit, and even some models are losses think about it, I statistics GBP/JPY trading spread on 6 points, and I worked hard to make 100 transactions to earn 1000 points of profit, but the market maker can get 600 points of profit for nothing of course I statistics model of single profit is the net profit divided by the average of the total number of transactions, which There are also some highly profitable transactions, 50 or 60 points, or even 200 points, but due to the problem of win rate, the average off the loss of the position is really little profit left perhaps some friends will say your win rate is too low, I can do more than 90% I know the win rate of 90% of friends, his strategy is to have profits on the end, wrong on the drift single, determined not to stop loss I am not sure how long he can eventually survive, here not to discuss further The next certain win rate of 70%-80% of traders, most of him using the dial scalp strategy, but also some is to grab the rebound, the so-called big drop will have a rebound after the scale of these two types of traders is also quite large, but this strategy is not we are happy to adopt the analysis of trading records found that almost forty percent of trading profits and another forty percent of trading losses want to be considered to offset each other another Twenty percent of the transactions contribute to the total profit, but in the large denominator of an average, there is little left Why is the profit and loss ratio normal, but can not achieve the 28 law of profit? Is the secret in the twenty percent of the large profits of the single inside the position allocation and cover strategy if we increase the proportion of the position when trading the two percent of the large profits of the order, for example, with two times the regular position to trade, so that you can get two times the profit? Ill reveal that the latter is correct and the former is wrong. Its silly and naive to look at the trading records, the losing trades are not a lot of profit points or a high break-even ratio of trades? Since the win rate is a constant, then the profit and loss ratio for the trading win rate is not a direct impact on the correct method is to put aside the profit and loss and profit and loss, analysis of all trading signals material trading signals based on the win rate to grade, a certain type of trading signals win rate of more than 90%, then insist on increasing the position to trade his what kind of trading signals win rate is high? This depends on each persons trading system in my trading system there are two types of trading opportunities is a very high win rate of the first category, in the unilateral trend, M5 cycle chart homeopathic trading, the signal for the RSI and its average cross, usually Asian session to the European morning a total of 3 to 4 good trading opportunities second category, the trend line crossover block effect between the exchange if it happens to travel to the intersection of two medium and long-term trend lines If the trend is not obvious, there is at least 30 points and more profit space to GJ for example in the trend line intersection (if the golden mean is also in this better) where the single entry 2x position, stop loss of 30 points, stop gain of 30 points, usually shadow will have a breakthrough of ten points, but will After the closing of the trend line below the stop effectively, and then fill half a position, the cumulative 3 times the position although the profit and loss ratio of 1:1 is very low, but the win rate is very high, and then use the fill strategy 30 points of profit to achieve the value of the normal situation 90 points, of course, if the empirical evidence of a win rate of 90% or more, you can open a higher position, as long as the transaction loss is less than the margin of 3% of the size can be discussed so much just to illustrate that when trading do not To analyze all the signals in the trading system and classify the signals with the value of win rate, with position control in order to achieve the purpose of expanding the revenue.