Forex multi account manager | Use your trading account operating, investing, trading | Assist in self management of family office investment
In foreign exchange investment trading, the moving average has independent application value and usually does not need to rely on other auxiliary indicators.
The candlestick chart can be regarded as a vertically presented manifestation of the moving average, while the moving average can be regarded as a horizontally expanded candlestick. When the moving average is above the price, it can generally be regarded as a signal indication for going long; when the moving average is below the price, it is usually regarded as a signal prompt for going short. In this way, the market is simply divided into two areas: long and short.
The strategy of using a single moving average is relatively simple. Because it reduces the conditions required for decision-making, it makes entry operations easier to achieve. However, when a second moving average is introduced, the market will be further subdivided into four levels and four spaces, which undoubtedly increases the complexity of decision-making and makes the entry conditions more stringent.
The moving average can not only indicate the direction of the market trend, but also help traders judge the long and short status of the market. It should be noted that the moving average is not a cost line, but a trajectory and measurement tool for prices in the vertical direction. Behind the moving average reflects the flow of a large amount of funds. Although for ordinary investors, this information may not be very clear.
As for how to make a profit by relying only on one moving average, the correct approach is not simply relying on technical analysis, but combining market cycles and personal understanding of the market. Each trader has different understandings of the market, so the way they use moving averages will also be different.
In short, the effective application of moving averages needs to be combined with market cycles and adjust strategies according to personal understanding of the market. Successful trading is not only the result of technical analysis, but also involves a profound understanding of market psychology and capital flows.
In foreign exchange trading, contrarian operations can seek quick profits, but the cycle needs to be handled well to prevent blind greed.
Traders tend to be contrarian mostly for short-term profits. They often bottom-fish and top-pick in a short cycle. Behind this is greed-driven. If separated from the market cycle, trading will be blind and disorderly. Human nature determines that there are both trend-following and contrarian trading.
Contrarian trading has the opportunity for quick profits, but it needs to match the market cycle. In actual operations, one should be cautious and follow rules to reduce risks and increase probabilities. People often buy low and sell high, and they need to deeply understand the market. Trading is often affected by market sentiment. Novices' simple strategies may bring some profits.
"Buying low and selling high" is a contrarian thinking, and "chasing rallies and selling down" is a trend-following thinking. But the distinction is not absolute and involves the relationship between long-term and short-term. The key to successful trading lies in flexibly applying strategies. Mature traders make decisions according to market conditions.
In short, traders should analyze market cycle trends and their own strategies, set stop losses and take profits reasonably, add positions when profitable and reduce positions when losing, and effectively manage risks and improve success rates.
Short-term foreign exchange trading is easy to learn and can be quickly put into actual combat, but it is also easy to fall into the misunderstanding of reverse thinking.
In the foreign exchange market, although short-term trading faces many challenges, it also has unique advantages, especially in terms of frequent opening practices. Compared with long-term trading, short-term trading provides traders with more learning and practice opportunities. In the process of short-term trading, traders can quickly accumulate experience and develop a keen insight into market trends, namely the so-called "market sense". This intuition helps traders detect abnormal market conditions in the first place and make corresponding decisions.
However, short-term trading also has certain limitations. Due to the short trading cycle, it may limit the thinking of traders and make them more inclined to open positions in reverse. This tendency is not something that all short-term traders can detect in time. When they truly realize it, they often have accumulated rich experience and skills and become outstanding players in the market. But unfortunately, in this process, they may have consumed a large amount of principal and resources.
For many short-term foreign exchange traders, the biggest dilemma is that when they have accumulated enough knowledge and experience, they find that they no longer have sufficient funds to continue trading. This situation of "not understanding when having money, but having no money when understanding" often forces them to leave the market and makes it difficult for them to start over.
Many people have a wrong perception that as long as they have an excellent foreign exchange investment trading system, they can put it into use immediately and achieve success.
However, this concept fails to fully consider the complexity of trading and the differences between individuals. In fact, truly stable and profitable trading strategies are usually not easily shared, and it is difficult to obtain them even at a high cost. Although there are a large number of trading systems of uneven quality in the market, the truly effective ones are extremely limited.
If trading skills could be easily taught, then we might see the emergence of many trading or investment families. However, the centuries-old history of the capital market shows that such families do not exist. The basic principles of trading are usually relatively simple and clear, but transforming these simple principles into deep understanding and putting them into practice is a process that cannot be obtained through teaching. It requires individuals to understand through continuous practice and reflection.
The key lies in personal perseverance and the spirit of enduring hardships. Even in the process of making money, the experience of holding positions may be full of challenges. Continuously facing these challenges is not easy, and this is the biggest problem many people face in trading. Constructing a trading system suitable for oneself can reflect an individual's understanding of the market. Through simulated trading for practice and exploration, one can gradually form a trading strategy suitable for oneself, because other people's systems are not suitable for everyone and cannot ensure stable profits.
Solving problems such as multiple solutions in trading forms, psychological barriers, capital management, risk management, and execution power requires individualized strategies. The problems an individual faces may not exist for others, and vice versa. Therefore, simply sharing experiences may not have practical effects. Instead of spending time asking others, it is better to practice personally in the trading process.
A complete trading system is not just an operation manual. It also covers an individual's cognitive system and emotional management system. Just like asking the secrets and methods of Olympic champions, even if they share all their skills, it may not be useful for individuals. On the road of trading, it will be found that excellent trading systems are not scarce, and all operation details are open and transparent. What is really lacking is faith in one's own trading system and execution power.
In the practice of foreign exchange investment and trading, professional traders can perceive some generally applicable laws.
Market trends usually present several patterns such as rising, falling or sideways movement, and these patterns are reflected at different time scales. In addition, the strength of the market is an important consideration factor in trading. Generally speaking, it is directly proportional to the size of the trading position. After strong accumulation of energy, the market often shows a strong trend, but not all strong trends have an obvious accumulation stage.
When the market pulls back after a breakout but does not continue to fall, this usually indicates that the market is in a state of oscillation. In this case, the success rate of going long is usually significantly higher than that of going short. Traders should realize that the essence of trading is the control of their own trading strategies and emotions, rather than direct control of the market. Market fluctuations often reflect the fluctuations of traders' inner hearts rather than the changes of the market itself.
The market is composed of trending and non-trending states, and the trending state is the main form of market operation. History often repeats itself because certain basic patterns of human nature and market behavior are relatively constant. Before a trend is formed, the market usually gives some signs, such as price breakouts. These breakouts are often early signals of trend formation and deserve close attention from traders.
Foreign exchange investment trading may bring returns under certain circumstances, but it cannot be simply assumed that it can lead to wealth.
At present, there are restrictions on foreign exchange investment trading in China. In China, personal foreign exchange management regulations clearly stipulate relevant requirements. For example, individuals have a limit of $50,000 in foreign exchange purchase annually. Moreover, the remittance of funds needs to comply with relevant policies and regulations. In actual operation, there may be many restrictive factors.
In the investment trading market, although there are opportunities for wealth growth, this possibility is not universal. According to some unofficial statistics, most investment traders may face losses. About 90% of people may suffer losses, 8.5% of people may break even, and only 1.5% of people can achieve profits. Among profitable investors, the vast majority are institutional investors with internal information and resources. In the long run, many investors may face the risk of capital loss unless they don't care much about investment funds or belong to the very few profitable ones.
For ordinary people, starting a business and investment trading are usually regarded as ways to achieve wealth growth, but both paths are full of challenges and uncertainties, and the possibility of success is not high. Whether it is starting a business or investment trading, one needs to bear great pressure, go through stages of confusion, vulnerability, and self-doubt, and have the impulse to give up countless times. And these efforts are usually to improve the living conditions of the family.
From the perspective of capital utilization, starting a business and investment trading are both commercial activities in essence. To a certain extent, both may rise to philosophical thinking. A person's education and efforts are difficult to surpass the commercial accumulation of several generations of a family in the short term. The efforts of each generation are part of the change in the family's destiny, which also reflects the saying that "poverty does not last for three generations."
Many people are eager to change their destiny, but in real life, such changes are often full of challenges. When young, one may lack a clear goal and can only try with intuition and courage; and when there is a clear goal, it may be difficult to achieve due to age and physical limitations. This is like longing for travel when young but being restricted by economic conditions. When economic conditions permit, one may lose the enthusiasm for travel due to aging.
The unpredictability and unfairness of fate are problems that everyone may face, but everyone's troubles and helplessness are unique. In ancient times, a person's achievements may be spread through word of mouth; in modern times, whether it is good or bad news, it can spread quickly through new media and the Internet. Importantly, no matter what challenges we face, we should maintain a positive attitude and find appropriate ways to achieve our goals and dreams. It needs to be emphasized that in China, unapproved foreign exchange investment trading has greater risks and may violate laws and regulations. Investors should carefully choose legal and compliant investment channels.
In the foreign exchange market, participants must attach great importance to trend analysis. The reason is that trend is the core element for identifying the bullish and bearish forces in the market.
According to the Pareto principle (i.e., the 20/80 law), foreign exchange traders need to focus on exploring those trend opportunities that account for a relatively small proportion but have a decisive influence. Approximately 20% of the time window may contain 80% of profit potential. Therefore, traders should not wait passively but actively seek and grasp these trend opportunities.
Trusting trends is not just a concept. It means that traders need to have patience to wait for the formation and confirmation of market trends. In foreign exchange trading, patiently waiting for the correct trend signal is often more important than frequent trading. This kind of waiting is not a passive behavior but an active strategy. It requires traders to have patience, discipline, and keen insight into market dynamics.
Through trend trading, foreign exchange investors can manage risks more effectively and explore profit opportunities in market fluctuations. It is of crucial importance that traders should construct a trading system suitable for themselves, covering key elements such as trend identification, risk management, and fund management, so as to improve the success rate of trading.
Many people choose to enter the field of foreign exchange investment and trading, which is often the result of the combined effect of the external environment and personal conditions.
In certain circumstances, this choice may be due to the pursuit of stable income or stem from dissatisfaction with the existing career development path. For example, civil servants usually tend to avoid high-risk trading activities because this may have an adverse impact on their career and personal life.
On the other hand, those who already have stable resources and a relatively high social status, such as "rich second generation" and "official second generation", may not have a strong motivation to engage in high-risk investment trading. They may be more inclined to use existing resources and advantages to maintain or enhance their status.
However, there are also some people who choose this profession out of the desire for financial freedom or the love for investment trading. They may be attracted by the potential and challenges of the investment market and expect to achieve wealth growth and the realization of personal value through their own efforts.
Whether due to life pressure or the pursuit of dreams, investment trading is a profession that requires highly professional knowledge, risk management ability, and good psychological quality. For those who choose this path, it is important to have a clear career plan and a deep understanding and adaptability to market dynamics. At the same time, they also need to be prepared to face market uncertainties and potential risks.
Trading experts usually adopt the moving average system, which effectively integrates key elements such as price, trend, and simplicity.
Experienced traders often mainly rely on the basic moving average system. In essence, this system is reflected as the average transaction price of assets within a specific period. Since price is the basic prerequisite for calculating the moving average, the moving average can not only represent price but also serve as an important indicator for trend tracking. It successfully integrates the core elements of trading, and the operation is very simple. Usually, only a few key lines need to be focused on. This simplicity perfectly conforms to the "Keep It Simple, Stupid" (KISS) principle. In the trading field, regardless of the strategy, thinking mode, or trading method adopted, individuals who can finally gain profound insights, although their methods have their own characteristics, often focus on these three core elements, namely price analysis, trend identification, and the pursuit of simplicity, thus achieving the unification of different paths.
In the field of foreign exchange trading, foreign exchange traders often neglect key signals such as moving averages and candlesticks but focus on some indicators with limited utility, thus missing good opportunities for profit-making. This phenomenon can be called "information blind spot".
In the category of foreign exchange investment trading, there are often some patterns and trends that are more difficult to detect, such as moving averages and candlesticks. From a theoretical perspective, foreign exchange investment traders should be able to conduct in-depth analysis and master moving averages and candlesticks proficiently through continuous observation of the market. However, in reality, many foreign exchange investment trading behaviors that fail to make profits in the market often ignore these key market signals such as moving averages and candlesticks and focus on some indicators and price patterns that have no substantial connection with trading. This situation can be defined as "turning a blind eye" to important information.
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