Forex multi account manager | Use your trading account operating, investing, trading | Assist in self management of family office investment
In the foreign exchange market, in terms of overall performance, long-term investment seems to have more potential for profitability compared to short-term trading.
However, many small investors often tend to choose short-term trading. Long-term investors generally invest funds in the market for a time span of up to three years, while short-term traders usually hold positions for only about three days. If a person catches an investment opportunity only after a long wait of three years but exits the market just three days later, this is actually a short-term speculative behavior and it is difficult to achieve huge profits. Because the fluctuation of market trends requires a certain amount of time to fully unfold, the fluctuation range within three days is relatively limited, which is a basic common sense in the investment field.
In the field of foreign exchange investment, although long-term investment is relatively easier to obtain returns, its high capital threshold makes it difficult for ordinary investors to get involved. In contrast, although short-term trading is more difficult to make profits, its characteristics of rapid capital turnover and low entry threshold give everyone an equal opportunity to participate.
Short-term trading has a significant characteristic, that is, both profits and losses occur relatively quickly. For short-term traders with small amounts of capital, although losses occur relatively quickly, the amount of loss is relatively limited. For investors with large amounts of capital, they may hold positions for several years. Although they have relatively more profits and a slower loss speed, once losses occur, the amount is often huge.
For investors with a small capital scale, they usually have to choose short-term trading at the initial stage because devoting themselves fully to short-term trading may have a better chance of obtaining returns. As the capital scale continues to grow, long-term investment becomes easier to achieve profitability and investors' mentality will also be more stable. After all, short-term trading is quite energy-consuming and very hard, and investors need to be highly vigilant at all times.
Finally, short-term trading strategies are often limited in effectiveness in many cases, while the concept based on value investment is more likely to succeed.
In the process of foreign exchange investment and trading, there are many valuable experiences that are difficult to teach directly.
Successful foreign exchange traders can provide material wealth for relatives and friends. However, experiences such as foreign exchange investment and trading cannot be completely copied and spread. Foreign exchange traders can share their own insights and have an impact on others. But whether the recipients can master these knowledge ultimately usually depends on their own abilities. Sometimes even the recipients themselves cannot predict the results. Although the experiences and secrets of successful foreign exchange investors can be taught, shared, influenced and made public, these behaviors are all one-sided. Accepting, understanding and mastering these experiences are passive and have nothing to do with the degree of closeness of the personal relationship with foreign exchange traders. Only those who can truly comprehend can benefit from it. It is definitely not the case that someone can have priority in mastering it just because they are the child of a foreign exchange trader.
If foreign exchange traders are unwilling to share their experiences, they should restrain the impulse to share. As the saying goes, personal experience is far more profound than verbal instruction. In the field of foreign exchange investment and trading, there is no so-called secret or master key. Only by fully mastering investment knowledge can confidence be established. Successful foreign exchange traders must have insight into many things and possess a high state of mind and cognition. Therefore, success in foreign exchange investment and trading is not innate. It can only reach a certain level through continuous training, bravely facing challenges, experiencing failures, and constantly improving the limits of social and self-awareness.
Foreign exchange investment and trading can infinitely magnify human weaknesses such as greed, luck, unwillingness, desire for control, hatred, and complaining, because the foreign exchange investment and trading market provides an unrestricted stage. Therefore, not helping relatives earn money beyond their cognitive range is actually helping them. All foreign exchange investment and trading skills ultimately need individuals to practice and master. It is impossible to judge whether others have talent or have truly learned. Success is their own achievement, and failure may bring adverse consequences. Only those who truly reach a high level will be willing to share because they have the ability to simplify complex things and teach them to others. Those who do not understand may give up because they find it profound, while those who are destined and have a foundation will keep working hard. Real masters never easily disclose their foreign exchange investment and trading skills because that may mislead others.
In the foreign exchange investment and trading market, achieving stable profits is extremely difficult. Similarly, continuous losses are not a common phenomenon.
If losses can be controlled within a relatively stable range, this is a form of success because it means that there is no major loss. Once the loss state tends to be stable, through appropriate strategy adjustments, there is hope of achieving profits. First of all, maintaining a calm state of mind and maintaining the existing trading mode are of crucial importance. This may mean that the trading strategy needs to be reexamined. In the foreign exchange investment and trading market, the vast majority of viewpoints and practices are very likely to be wrong. Many people think that technical indicators are worthless, and the published strategies are usually based on probability and are not always effective.
To embark on the correct path of foreign exchange investment and trading, foreign exchange traders must clearly understand that the essence of trading lies in buying and selling, and the key to making profits lies in obtaining price differences through buying low and selling high or selling high and buying low. If foreign exchange traders accept this theory, then the method of realizing buying low and selling high or selling high and buying low becomes the key. By asking questions, verifying questions and solving problems, foreign exchange traders can treat trading with a scientific attitude and solve the problems encountered in trading.
In foreign exchange investment and trading, some principles are correct, such as the market is always correct, trading is a probability game, etc. For foreign exchange traders who have just entered the market, they may know nothing about the fluctuation laws of the market, so they may make profits or losses, which depends entirely on luck. But if they learn wrong trading concepts, they are very likely to fall into a situation of continuous losses. There may be errors in operating methods, and there may also be deviations in the understanding of controlling losses and profit drawdowns. Controlling losses does not mean that you must exit the foreign exchange investment and trading market. Otherwise, you will lose the opportunity to invest again. There are many methods to control losses in the foreign exchange investment and trading market. If you choose the least ideal one, such as hedging and using profits to protect losses, this is one of the mainstream risk control methods in the market. On the other hand, it is to control profit drawdown. Don't pull it out when the seed has just germinated and claim that it is to protect profits. Small profits do not need protection. If the market pulls back, just exit and there will be no loss. What should be protected is to let small profits grow into large profits, ensure that after making substantial profits, there will be no retracement. Don't be too greedy. Withdraw the principal and use profits to pursue greater gains.
In the foreign exchange market, investors' achievement of financial freedom is usually attributed to their deep interest and strong enthusiasm for trading.
Financial freedom is not the direct driving factor for their enthusiasm for trading. In fact, it is the derivative result of their enthusiasm for work. Humans need goals and activities to enrich their lives. Otherwise, they are extremely likely to fall into a state of mental lethargy. Even if they achieve financial freedom, many investors will still choose to continue working. The reason is that work is not only limited to making money but also can meet people's spiritual needs and social needs.
If a person no longer needs to work, at the initial stage, they may be immersed in a carefree life state. However, as time goes by, due to the lack of goals and activities, they may feel an inner sense of emptiness. As social beings, humans need to explore the meaning of life through communication and interaction with others. Lack of work and daily social activities may trigger emotions such as loneliness, helplessness, inferiority, and depression. Work is not only for obtaining economic income but also can provide spiritual support for people. In the process of facing challenges and solving problems, people can gain a sense of accomplishment. Work brings both short-term pleasure and long-term satisfaction and meaning in life. Although not working for a long time may bring some happiness at the initial stage, it may eventually lead to a sense of emptiness, loneliness, and loss.
In terms of foreign exchange investment trading, even if a person has accumulated enough wealth to support the rest of their life, they may still choose to continue trading. Because for them, trading can be a way of leisure, entertainment, or even health preservation. The key lies in that when a person has both sufficient funds and abundant time, their mentality will be more relaxed, and naturally they will regard foreign exchange investment trading as a leisure activity.
In the field of foreign exchange market investment, there is a common view that if stable profitability cannot be achieved, then one should not devote all one's energy to foreign exchange investment trading.
However, if there is no full-time investment, it seems difficult to achieve a state of stable profitability. But in fact, there is no direct correlation between profitability and whether to conduct full-time trading. People who have been engaged in foreign exchange investment trading for a long time may only conduct several large-scale transactions in a year. In this case, full-time investment is not necessary. Full-time trading often gives people the impression of frequently conducting short-term transactions, and the success probability of short-term transactions is usually low.
Working for a foreign exchange investment trading company and achieving stable profitability has certain necessity. However, once stable profitability can be achieved, many people are no longer willing to work for the company. There is still a certain distance between stable profitability and financial freedom. With the help of the company's funds, financial freedom can be achieved faster, and at the same time, it can also bring benefits to the company. This can be said to be a win-win situation. But it should be noted that once working for a company, perhaps financial freedom can never be achieved.
Individual self-employed foreign exchange investment traders and working for a company each have their own advantages, such as in risk control. Many experienced traders rely heavily on the company's risk control system unless they have constructed an effective passive control mechanism themselves.
In general, it is inappropriate to pursue perfection in foreign exchange investment trading. Whether conducting full-time foreign exchange investment trading, working for others or being self-employed, there is no direct relationship with stable profitability.
In the field of foreign exchange investment trading, if there is a floating loss and holding a position at the beginning of position building, it means that the investor's foreign exchange investment trading system does not effectively match the current market conditions.
Specifically, if the investor's trading system is of the trend trading type, but the current market is in a volatile market; or if the investor's trading is in a volatile trading mode but encounters a trending market; or if the investor's trading system belongs to the category of long-term investment, but the current market is more suitable for short-term trading; or if the investor's trading system is short-term trading, but the current market is suitable for long-term investment and other situations, that is, a state where the market and the system deviate from each other appears. In this case, investors can choose to wait with empty positions or replace the foreign exchange investment trading system that matches the current market conditions.
If the top-copying operation is carried out at the historical top stage of long-term investment or the bottom-copying operation is carried out at the historical bottom stage of long-term investment, then facing a floating loss and holding a position at the beginning of position building is a normal situation. If there is also the support of a positive interest rate spread at this time, it will be even more ideal. Investors only need to wait patiently for the substantial returns brought by long-term investment.
Foreign exchange investment trading essentially belongs to a betting relationship. Someone has developed a reverse indicator system SSI. In this system, the vast majority of participants are losers, that is, most retail investors, and only a very small number are winners, that is, a small number of large investors. Usually, the stop-loss return point of retail investors often becomes the entry point for large investors. The concept of "hunting stop loss" also conveys the above meaning.
In the field of foreign exchange investment trading, if a person fails to become a top expert within several years, but as long as they can achieve the goal of supporting their family through continuous learning, research and practice of foreign exchange investment trading, without being employed by others and even earning more than working for others, then such a person should be regarded as a successful person and be advocated.
In foreign exchange investment trading, people's concepts and consciousness directions deviate from the normal path to a certain extent. It seems that there is always a strong promotion of becoming a top expert and achieving fame and success. This is actually a misleading behavior and creates anxiety in foreign exchange investment trading. Because of this, novice traders in foreign exchange investment trading often blindly use leverage and conduct disorderly trading, which eventually leads to forced liquidation and departure. After a batch of novices leave, another group of novices will pour in. The atmosphere of disappointment shrouds the entire foreign exchange investment trading market and damages the industry's reputation.
In fact, the foreign exchange investment trading industry belongs to a market category with low risk and low return. If leverage is not used, there is basically no major risk. The currencies of mainstream international countries basically have no delisting risk, so there is no need to worry excessively. Carry trade in long-term foreign exchange investment trading is similar to value investment in the foreign exchange investment trading market. As long as one holds patiently for several years, the interest accumulation is relatively considerable. The vast majority of foreign exchange investment traders can achieve stable profits, which directly breaks the assertion that the vast majority of investments in the foreign exchange investment trading market are losses. However, under the wrong guidance of being eager for quick success and pursuing fame and success and becoming an expert, foreign exchange investment traders are scrambling to be short-term traders rather than choosing to be long-term investors.
In the field of foreign exchange trading, the behavior of novice traders is highly similar to that of gamblers and they often regard the foreign exchange market as a casino.
However, experienced traders adopt a completely different approach. They are more like the operators of casinos and establish a parallel relationship with the market. Gamblers participate in game activities with rules set by others and usually face an unfavorable expected return situation; while senior foreign exchange traders can formulate their own rules and thus have the possibility of achieving a favorable expected return.
Foreign exchange traders establish themselves in the market by relying on their own technology. They have the freedom of choice and there is an opportunity to obtain huge profits by relying on luck. In contrast, gamblers mainly rely on luck to maintain themselves briefly in the casino and almost have no freedom of choice. Eventually, they often fail due to probability factors. Foreign exchange trading follows specific logics and rules, while gambling almost completely depends on luck.
Although both foreign exchange traders and gamblers recognize the role that luck plays in success, successful foreign exchange traders can conduct in-depth analysis, induction, and summary based on numerous factors, conditions, and data in the market, thereby increasing the probability of winning. In comparison, there are relatively few factors available for analysis in gambling.
In the field of foreign exchange investment trading, its core can be defined as belief.
When in line with market trends, profits can be obtained; if contrary to it, risk control is required. In probabilistic trading, due to the influence of various factors, advantages may be lost. However, people often ignore the importance of belief.
The behavior of foreign exchange investment trading should follow market trends. If the chart destroys the opening logic, one should exit; otherwise, hold. The norm of foreign exchange investment trading lies in following the trend and becoming a follower without emotional interference. Belief is actually confidence. One needs to believe in the correctness of the strategy system and persist even in the face of adverse fluctuations in the foreign exchange market. In foreign exchange investment trading, the source and establishment of confidence are fundamental issues.
The core of foreign exchange investment trading lies in following trends and avoiding fluctuations. The key to profitability lies in maintaining profits in unilateral trends while reducing drawdowns in wide fluctuations. The foreign exchange investment trading system unfolds around this core. Following trends can obtain high winning rates and high profit-loss ratios. Trading different currency varieties can diversify risks and increase the probability of success. Constructing a foreign exchange investment trading system that includes large and small cycles and can cut off the head and tail can improve the winning rate and profit-loss ratio. The core of foreign exchange investment trading lies in the subject's cognition of the object. The closer the cognition is to the objective operating laws of the market, the greater the possibility of making a profit. Probability in foreign exchange investment trading is the recognition of market uncertainty. To achieve profitability, one needs to understand the operating mode of the market.
In the field of foreign exchange investment trading, mentality, capital and technology show different importance at different stages.
Mentality aspects include elements such as patience, discipline, initiative and execution. The technical level covers the judgment of direction, the identification of support and resistance areas, position control and the rational use of leverage size, the determination of closing areas, and the setting of stop-loss and take-profit areas. In terms of capital, it involves the capital scale of traders, including large-capital investors, small-capital traders, and medium-capital funds in a critical state between investors and traders.
For foreign exchange investment traders, at different stages, their importance depends on which aspect has shortcomings. This is just a difference in the perspective of looking at problems or the way and method of thinking about problems.
When foreign exchange investment traders are in the initial stage of beginners, they have very little capital and a high trading frequency. At this time, technology is the most important and ranks first; mentality is second and ranks second; capital is relatively the least important and ranks third. Because the lack of capital is a known situation, traders need to rely on technology to earn profits.
When foreign exchange investment traders are in the intermediate stage of proficiency, the capital volume is medium and the trading frequency decreases. At this time, technology and mentality are equally important and rank first; capital ranks second. At this stage, it is necessary to gradually increase the importance of mentality, otherwise the hard-earned capital will be difficult to keep.
When foreign exchange investment traders are in the advanced stage of masters, they have a large amount of capital and a lower trading frequency. At this time, mentality is the most important and ranks first; capital is second and ranks second; technology ranks third.
In the real world, the principal and secondary contradictions are constantly transforming, and foreign exchange investment trading is no exception. Different foreign exchange investment trading methods and concepts lead to different importance of foreign exchange investment trading technologies.
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