Forex multi account manager | Use your trading account operating, investing, trading | Assist in self management of family office investment
In the field of foreign exchange investment and trading, foreign exchange investment traders who lack funds usually find it difficult to become trading masters.
This is because trading masters are often forged through continuous tempering in the actual capital operation process. Without practical experience with funds, it is impossible to cultivate real foreign exchange investment trading skills. This situation is extremely unrealistic, just like a person who has never touched a gun claiming to be a sharpshooter.
If a foreign exchange investment trader truly has excellent technology, then his trading records should be able to attract funds. In the foreign exchange investment trading market, excellent trading records can be said to be a stepping stone to establishing a foreign exchange investment fund. Therefore, if a foreign exchange investment trader claims to have superb technology but lacks funds, this can only indicate that his technology has not been recognized by the market.
Losses in foreign exchange investment trading usually stem from post-profit drawdowns, aimless trading behaviors, and the conversion of profits into losses due to insufficient understanding of the market. The fundamental reasons for these losses all point to the imperfection of trading technology. In the foreign exchange investment trading market, individual heroism is relatively prevalent. Many people think that their technology is unrivaled, but in fact, they may not even have understood the true connotation of technical analysis. Real technical analysis should be able to interpret the behaviors of participants in the foreign exchange investment trading market.
The growth of foreign exchange investment trading funds is a step-by-step process. As trading technology improves, funds will also gradually accumulate. This is a journey that every foreign exchange investment trader must go through. Cognition that cannot be realized through trading is worthless. Therefore, when a foreign exchange investment trader claims that his trading technology is very strong, but in fact cannot attract funds, this can only show that his technology has not reached a truly high level.
People who can see through the essence of things at a glance and people who cannot see through the essence throughout their lives have significantly different life trajectories. But unfortunately, many people mistakenly think that they belong to those who can see through the essence of things at a glance, but in fact, they have never seen through it throughout their lives.
In the field of foreign exchange investment, small traders usually tend to engage in short-term trading rather than long-term investment.
Short-term trading has immediacy and can quickly reflect investors' decisions. Whether it is a profit or a loss, results can be obtained in a short time. This rapid feedback mechanism caters to people's psychological pursuit of instant gratification. In contrast, long-term investment requires investors to have more patience and perseverance and wait for the slow development of market trends, which is a challenge for many investors. The volatility and uncertainty of short-term foreign exchange investment trading are attractive to investors who crave excitement and adventure. The rapid change of foreign exchange currency prices can trigger strong emotional experiences. For those who are keen on such psychological needs, short-term trading undoubtedly provides an ideal operating platform.
However, small traders in foreign exchange investment generally have the natural disadvantage of scarce funds. Even if they intend to conduct long-term investment, they often cannot meet the conditions in terms of time and funds. Under the pressure of the situation, they can only choose short-term trading. This is also one of the reasons why the vast majority of failure cases in the market occur to short-term traders and retail traders. This phenomenon is already well known to everyone.
But from a professional perspective, short-term trading is actually ineffective, and the long-term value investment theory is a truly effective investment strategy.
Foreign exchange trading theory is not the fundamental reason for the failure of astute traders. The real risk lies in individuals who mechanically apply theories without independent thinking and analysis.
Many foreign exchange traders have cognitive biases and wrongly believe that only complex and obscure trading theories can bring profits. In fact, the problem does not stem from the trading theory itself, but rather most investment books may be misleading. The reason is that perhaps the authors are not good at investing themselves but obtain economic benefits by writing books. Fundamentally speaking, the effectiveness of any foreign exchange trading theory depends on the user. If traders cannot distinguish the quality of books and theories and lack basic judgment ability, then the possibility of them making profits in the foreign exchange market will be extremely small.
The market follows the Pareto principle, which is not directly related to the theory itself but is closely related to the people who apply the theory. Those who always look for reasons externally often have difficulty succeeding, and this has nothing to do with the theories they have learned or used. Only through continuous review and reflection and continuous improvement and progress can traders survive in the foreign exchange market.
In addition, when foreign exchange trading theories become extremely complex, courses providing such theories are often more profitable than actual trading. These trainers continuously introduce new textbooks, which are more complex each time, making foreign exchange trading theories even more chaotic. Most foreign exchange traders lack the ability to think independently and are prone to blindly follow. If everyone can stay awake and wise, then those trainers will find it difficult to make a living. Therefore, the key lies in cultivating one's own judgment and analysis ability rather than blindly pursuing complex theories.
In the field of foreign exchange investment and trading, the accumulation of experience indeed has an important and undeniable influence on personal growth and development.
However, the success or failure of trading is not entirely determined by the length of trading time. The foreign exchange investment and trading industry is not a field that judges superiority based on seniority, but an industry that follows the law of survival of the fittest.
In the foreign exchange investment and trading market, there is a certain degree of difference between traders with 5 to 10 years of experience and those with 20 to 30 years of experience, but in most cases, this difference is not significant. Only in very few cases can the accumulation of experience bring completely different results. In the trading industry, it is not completely dependent on seniority. If a person with 5 years of trading experience has a higher income than a person with 30 years of trading experience, this indicates that they have excellent trading ability. In the trading field, results are the only criterion for measuring success, and mastering theory cannot be directly converted into actual profits.
As the experience of foreign exchange investment and trading continues to increase, traders may have a deeper understanding of the market and thus have the opportunity to obtain higher returns. However, if an amateur foreign exchange investment trader still has not found a stable profit-making method within three years, then from a professional perspective, it is best for them to choose to quit. After all, investing the same time and energy in other promising industries may bring more substantial returns.
Traders who can continuously engage in foreign exchange investment and trading for 5, 10, 20 or 30 years undoubtedly have extraordinary strength and high-level trading skills. However, if they fail to achieve profits or have meager profits, then from a professional perspective, they will still be regarded as trading losers.
If a foreign exchange investment trader is still active in the market after about 15 years, then from a probabilistic perspective, they are likely to have accumulated a certain amount of wealth. If they still have not achieved profits at this point, then this may mean that this person is not suitable for this industry.
In conclusion, from a professional perspective, the length of trading years cannot determine whether a trader can achieve success.
The foreign exchange investment trading system is usually not complicated. It is mainly composed of moving averages and candlestick charts to construct a general trading position opening and order placing mode. At the same time, there is a fixed paradigm of repeated position opening and repeated order placing.
If an extremely complex foreign exchange investment trading system appears, it is often a foreign exchange short-term trading system aimed at getting rich quickly in the short term. In fact, what is truly effective and plays a key role is the trading logic. As long as the logic is correct, continuous position adding can be carried out, and position adding operations can continue when there is a pullback. For example, Japanese foreign exchange investors are good at long-term carry trade investment, that is, using the low interest rate of the yen to obtain the interest of high-interest-rate currencies. The accumulated total interest amount for holding positions for several years can be calculated relatively accurately. If the logic is correct, there will be a theoretical foundation for firmly holding positions. Suppose there are 800,000 foreign exchange investors in Japan, and the vast majority of them hold such positions, and the position size exceeds 10 billion. Then, considering from the principle of following the crowd, if you also insist on holding positions, there will definitely be no mistakes. In the entire investment process, it is not trading technology that is effective, but the carry trade strategy in investment logic that plays a leading role.
Although the long-term carry trade theory is extremely excellent and correct, if you neither have large funds nor have the personality trait of patiently holding positions and cannot hold positions for several years or even cannot endure for a few weeks, then this profitable investment strategy is of no value to you. It neither conforms to your personality characteristics nor suits your capital scale situation.
In the field of foreign exchange investment and trading, investors often face the situation of having to make a choice between the difficulties of trading and the hardships of future life.
When investors feel the bitterness brought by foreign exchange investment and trading, it is recommended to deeply consider the reasons for initially choosing to embark on this path. If the original reasons still hold rationality, then they can continue to adhere to it; if those reasons no longer exist, they should withdraw immediately.
Facing the dilemma of foreign exchange investment and trading, investors need to carefully examine their current living conditions, including multiple aspects such as life, trading, mentality, and health, and also consider the progress they have made in trading. In necessary cases, it is advisable to take a step back and adjust their foreign exchange investment and trading strategies instead of blindly persisting. Investors should regularly assess their own conditions and adjust strategies according to the assessment results, and must not continue unchanged.
If investors think that the road of foreign exchange investment and trading is full of hardships, then they can draw a grand blueprint for themselves to inspire themselves to keep moving forward. Under normal circumstances, those investors who can achieve success have set grand goals for themselves before taking action. Because they believe they can succeed, they can foresee the scene of success. It is this kind of foresight and blueprint that provides them with motivation and prompts them to take action. Otherwise, in the face of numerous difficulties and obstacles, very few people can persevere. In this way, investors can inject new motivation into themselves and continue to forge ahead on the road of trading.
In the foreign exchange investment and trading market, setting the pursuit goal as stable long-term returns rather than short-term small profits and striving to avoid major losses is a highly reasonable strategic choice.
In the process of foreign exchange investment and trading, the market dynamics of foreign exchange investment and trading at the large-cycle level can be regarded as the best fundamental analysis tool. The main reason is that ordinary small investors usually find it difficult to persistently adhere to the long-term investment strategy. While large foreign exchange investors can only patiently wait at the large-cycle level for the market main force to push the appearance of market turning points with funds and then follow the trend. In addition, market turning points at the large-cycle level are often accompanied by relatively significant price fluctuations, which provides ample profit space for large investors.
In the absence of the price space logic support at the large-cycle level, technical analysis of foreign exchange investment and trading often evolves into a trap of continuous stop-loss for ordinary short-term small-capital traders. Short-term small-capital traders usually enter the market full of confidence. However, as the essential uncertainty of the market gradually emerges, the blow brought by losses continuously erodes their belief in high-probability trading. However, the risk-averse characteristic in human nature makes it difficult for people to accept the essential uncertainty of the market. In other words, it is difficult to accept the reality of the absence of high winning probability.
This mentality of not accepting reality triggers frequent trading behaviors, trying to seize every opportunity in the market. But this trading method actually violates the laws of human nature. Because if following human nature, people often tend to lock in profits as soon as possible instead of pursuing huge gains. At the same time, due to the aversion to risk, people are usually unwilling to stop losses in time, resulting in continuous expansion of losses rather than stopping losses at a small level.
In terms of technical analysis, most traders, due to limited cognition, either continuously stop losses in frequent trading or completely give up stop losses until they are finally trapped by the market. Dozens of stop losses or months of losses are enough to destroy the confidence of short-term small-capital traders. They often leave the foreign exchange investment market dejectedly, end their exploration of the investment career, and never set foot in this field again for life.
Only a few successful large-capital investors have deeply insighted into the essential uncertainty of the market, recognized that candlestick charts are only manifestations of rules, and learned to only participate in transactions that conform to the rules. They have given up many small opportunities and based on large price fluctuations to ensure that every attempt to take risks is of practical significance.
In the field of foreign exchange investment and trading, its difficulty is widely known. For individuals lacking strong background support, whether it is appropriate to take foreign exchange investment and trading as a career development path is a question that requires careful consideration.
In fact, the difficulties faced in foreign exchange investment and trading do not stem from the trading behavior itself, but are attributed to the unfavorable starting conditions of individuals and unrealistic expectations. This situation often causes people to fall into a state of impatience and then chase after those almost unattainable perfect strategies. In such a situation, people often take short-term actions due to the urgent need to deal with survival needs rather than making long-term plans.
Short-term foreign exchange investment trading is characterized by high risk and frequent operations. Coupled with the limited personal funds, it is extremely easy to fall into an inescapable predicament. For many people who have no other choice, taking foreign exchange investment and trading as a way to make a living is indeed not an ideal choice. Many successful foreign exchange investment traders do not realize that for those foreign exchange investment traders who need to pay various bills, rent, and daily expenses every month, they urgently need to find a method that can generate profits quickly. This makes them constantly search for the so-called "holy grail" and conduct frequent trading operations.
The high income in the foreign exchange investment and trading industry is largely based on these traders with relatively scarce resources. The difficulty of foreign exchange investment and trading depends not only on the individual's capital scale, but also on whether there are clear goals and plans and whether they can be implemented perseveringly.
For people with limited resources, everything seems extremely difficult. Although foreign exchange investment and trading seems easy to get started, in fact, it is a field with extremely high barriers. For the vast majority of Chinese people, foreign exchange conversion is a barrier, and sending foreign exchange to the platform providers in the international market is also a barrier. These two barriers alone are enough to make countless Chinese people shy away.
For those who cherish their reputations, what kind of career is worthy of their all-out efforts? Do they really have a choice? In the process of foreign exchange investment and trading, risks and returns are interdependent. Risk-averse people find it difficult to obtain the returns they expect. Those who seek low-risk and high-return strategies may find that such strategies do not exist in reality.
In the foreign exchange investment and trading market, some foreign exchange traders feel fortunate about their participation in investment, while others deeply regret not having been involved. That is, the successful are glad and the losers regret.
Generally speaking, the thinking patterns and intellectual levels of most people are not suitable for participating in foreign exchange investment and trading. The essential characteristic of the foreign exchange investment and trading market lies in the fact that the views generally recognized by the public are often wrong. What is even more disappointing is that even the views of a minority may not be accurate. This places requirements on foreign exchange traders. They need to have extremely strong independent thinking ability. Not only must they have innovative thinking, but these thoughts must also be precisely correct. This is very different from traditional Chinese educational methods. Therefore, many people with higher education are still prone to losses in foreign exchange investment and trading.
However, in foreign exchange investment and trading, the worst way to fail is to follow the trend and imitate. This is because foreign exchange investment and trading is different from the traditional education and examination screening model, and there is no standard answer. According to the investment's 80/20 law, if a view can be recognized by the majority, then it can be affirmed that this view is wrong.
The path of foreign exchange investment and trading is the opposite of the choice of paths in reality. For example, there are two paths in the forest, one is a path walked by many people, and the other is a path walked by few people. According to the general concept, choosing the path walked by many people will not lead to unnecessary detours. But in foreign exchange investment and trading, the SSI sentiment index derived from the 80/20 law shows that 20% of people are actually correct, while 80% of opponents are actually wrong.
In the field of foreign exchange investment, the importance of the logic of long-term foreign exchange investment is significantly higher than that of short-term trading logic, and compared with short-term trading techniques, its importance is even much higher.
On the whole, in foreign exchange investment, the importance of technology is relatively low, and it can even be regarded as dispensable. Its degree of influence can be large or small, and it can be completely ignored to a certain extent.
The logic of long-term foreign exchange investment mainly includes positive interest rate spreads between countries and whether the national currency strategy is inclined to implement a weak currency orientation or a strong currency orientation. The entry timing is: buy when the price is low and expect to sell at a higher price; sell when the price is high so as to buy again at a lower price. In other words, when at a historical low, do not short; when at a historical high, do not go long.
The logic of short-term trading is mainly manifested as trend following, specifically reflected as chasing up and down. The entry position is: after selling at a high price, buy again at a higher price; after selling at a low price, continue to buy at a lower price. There are mainly four situations for short-term trading techniques: in an uptrend, short-term breakthrough buying can be adopted, and for long-term, it is appropriate to buy on pullbacks; in a downtrend, short-term breakthrough selling can be carried out, and for long-term, sell on pullbacks.
As long as the investment logic is correct, trading techniques can be ignored. For example, in the long-term foreign exchange carry trade strategy, if you have successfully bottom-fished or caught the top and established a stable bottom position or top position, you can sit back and wait for profits. When adding positions on floating profits in the middle, a better choice is to add positions on pullbacks. You can also choose to add positions on breakouts. You can even add positions relatively casually without referring to technical indicators or price positions.
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