Forex multi-account manager Z-X-N
Accepts global forex account operation, investment, and trading
Assists family office investment and autonomous management

In the field of foreign exchange investment and trading, the precise definition of "effective retracement" requires a comprehensive consideration of multiple core factors, including the magnitude of the retracement, market structure, and the strategies and time frames followed by traders.

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Definition of effective retracement.
1. Not breaking key levels: Generally speaking, an effective retracement means that after the price touches a certain key resistance level (such as the previous high) or support level (such as the previous low), it does not break through these key prices, but immediately reverses. This kind of retracement phenomenon means that at these key prices, the buying and selling forces between market participants have reached a certain balance, or it implies that the forces driving the market trend before are gradually weakening.
2. The magnitude of the retracement: The magnitude of the retracement is also an important consideration indicator for determining an effective retracement. For investors who pursue a long-term investment strategy, an effective retracement may mean a large adjustment in price; while for traders who focus on short-term trading, even relatively small price fluctuations may be regarded as an effective retracement.
Callback judgment for traders at different levels
1. Long-term investors.
Perspective: Long-term investors focus on the long-term development trend of the market and usually use monthly or weekly charts to conduct market analysis.
Judgment criteria: They focus more on long-term support and resistance levels, such as highs and lows formed over many years. As long as the price adjusts near these long-term key price levels and does not break through these long-term levels, it can be regarded as a valid correction.
Pullback distance: Since long-term investors focus more on long-term asset appreciation, they can often withstand larger corrections.
2. Swing traders.
Perspective: Swing traders usually use weekly and daily charts for market analysis, focusing on the fluctuations of the market over a period of weeks or even months.
Judgment criteria: They focus on medium-term support and resistance levels, such as highs and lows formed in the past few weeks or months. When the price adjusts near these medium-term key price levels, it is regarded as a valid correction.
Pullback distance: Swing traders have a tolerance for pullbacks that is somewhere between long-term investors and short-term traders. They need to ensure that pullbacks do not disrupt medium-term market trends.
3. Short-term traders.
Perspective: Short-term traders rely mainly on daily and hourly charts, focusing on price fluctuations in the market over a few days.
Judgment criteria: They focus on short-term support and resistance levels, such as the highs and lows of the day or the past few days. The price adjustment near these short-term key price levels is an effective pullback.
Pullback distance: Since short-term traders rely mainly on rapid price fluctuations to make profits, they can usually only tolerate smaller pullbacks.
4. Ultra-short-term traders.
Perspective: Ultra-short-term traders use minute charts and focus on price fluctuations in the market over a few minutes to hours.
Judgment criteria: They focus on extremely short-term support and resistance levels, such as the highs and lows of the past few minutes or hours. The price adjustment near these very short-term key price levels is considered a valid pullback.
Pullback distance: Ultra-short-term traders have a very low tolerance for the magnitude of pullbacks because they rely on very small price fluctuations to quickly enter and exit the market.
In summary, the definition and judgment criteria of a valid pullback will vary depending on the strategy and time frame adopted by the trader. Only by deeply understanding their own trading style and goals, and combining scientific and reasonable market analysis tools, can traders more accurately identify and use effective pullbacks and make more informed trading decisions.

In foreign exchange investment and trading activities, the importance of accumulating and applying valuable experience cannot be underestimated, especially in areas with low standardization and significant impact of low-probability events.

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Low standardization areas.
In the scope of foreign exchange investment and trading, many areas lack strict standardized processes, which means that it is impossible to rely solely on universal models or rules to solve all problems. For example, in the fields of management consulting and psychological consulting, each case is unique, and relying solely on theoretical models while ignoring specific situations often leads to failure. In the foreign exchange trading scenario, many factors such as market sentiment, macroeconomic events, and political changes make it difficult to fully standardize market behavior. Therefore, traders not only need to master theoretical knowledge, but also have the ability to respond flexibly and innovative thinking.
Limitations of abstract rules. Although some general trading rules such as trend tracking, support and resistance can be summarized, these rules can only solve part of the problem. Given the complexity and variability of market conditions, traders are required to be able to flexibly adjust strategies according to specific circumstances. The importance of case analysis.
In these areas, in-depth research on specific cases and historical events can provide traders with valuable insights. For example, analyzing past market crises and successful trading cases can help traders understand the response strategies to be adopted in non-standard situations. Areas where low-probability events have a huge impact.
In foreign exchange investment transactions, low-probability events (such as black swan events) are relatively unlikely to occur, but once they occur, their impact may be extremely catastrophic. Such events are often difficult to predict and have far-reaching impacts on the market. For example, the financial risk control field must pay close attention to these low-probability events because they can lead to huge financial losses. The same is true for special forces operations, where a single mistake can affect the success or failure of the entire mission.
Lessons from Long-Term Capital Management.
The failure of Long-Term Capital Management (LTCM) is a classic case. The company brought together top financial experts and used complex mathematical models to manage huge assets. However, the emergence of the "black swan" of the Russian financial crisis in 1998 caused LTCM's model to fail and eventually led to the company's bankruptcy. This incident shows that even with advanced analytical methods and strong assets, there is no guarantee of foolproofness in extreme market conditions. The importance of risk management.
In the face of low-probability events, risk management strategies are crucial. Traders need to build effective risk control mechanisms, such as setting stop losses, diversifying investments, and conducting stress testing, to reduce potential catastrophic losses.
Practical application.
1. Continuous learning and adaptation: The foreign exchange market is constantly changing, and traders need to continue to learn new knowledge and new skills to adapt to the evolution of the market. This includes understanding new tools, new technologies, and new market dynamics.
2. Combine quantitative and qualitative analysis: In the decision-making process, traders should not only rely on quantitative models, but also combine qualitative analysis. For example, it is necessary to fully consider the psychological factors of market participants, political factors, and macroeconomic trends.
3. Establish a flexible trading strategy: The trading strategy should have a certain degree of flexibility and be able to adjust in time according to changes in market conditions. At the same time, always be vigilant about low-probability events to ensure that capital can be effectively protected in extreme cases.
In summary, in foreign exchange investment transactions, valuable experience usually comes from a deep understanding of non-standardized areas and low-probability events. Traders should learn from specific cases, build a comprehensive risk management strategy, and always maintain sensitivity and adaptability to market dynamics. In this way, traders can better deal with market uncertainties and thus increase the success rate of transactions.

In the field of foreign exchange investment and trading, there are significant differences in the judgment of individual investors on market trends.

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Specifically, the breakthrough trend determined by some investors may be classified as a correction phenomenon in the analysis framework of other investors. Taking short-term trading investors as an example, the upward breakthrough defined by them is likely to be regarded as a short upward correction in the process of a downward trend from the perspective of long-term investment and investors who hold a bearish position and have large capital allocation. Similarly, the downward breakthrough identified by short-term investors may be just a downward correction in the upward trend for investors who hold a long-term bullish view and control a large amount of funds.
In the actual operation and theoretical research of foreign exchange investment and trading, common breakthrough manifestations cover many aspects. First, the price successfully surpasses the high or low point formed in the previous period; second, the price effectively stands above or falls below the moving average set according to specific technical parameters; third, the short-term moving average crosses the long-term moving average upward or downward; fourth, the price breaks through the integer level with important psychological significance upward or downward. However, due to the differences in trading strategies, risk preferences and market perceptions among different investors in the process of foreign exchange investment and trading, their definition standards for personal foreign exchange investment and trading are diversified, and the technical analysis parameters used are also different. This diversity makes it impossible for the so-called "breakthrough" concept in the field of foreign exchange investment and trading to have a universally applicable and absolutely unified standard.
There is no consensus on the success rate of breakthroughs in foreign exchange investment and trading. Some market participants believe that the success rate of breakthroughs can reach 90%, while others believe that it is only 10%. In fact, both views have their rationality and limitations. In-depth analysis of the reasons, investors need to clearly realize that the breakthrough points determined by themselves based on specific analysis methods and parameters may not be applicable in the investment systems constructed by other investors based on different operating cycles and analysis parameters. Due to the different operation cycles among investors, the technical parameters used vary greatly, which may lead to the situation that investors think is a breakthrough, but other investors may only see it as a market correction.
In foreign exchange investment and trading practice, when the market shows a breakthrough signal, a position is opened. In essence, this is a random trading mode. Through long-term statistical analysis of a large amount of historical trading data, it is known that the winning rate of this trading mode is about 50%. Relatively speaking, within the scope of morphological analysis of technical analysis, for the breakthrough of the previous high or low point, if the market is in a clear trend rather than a consolidation stage, the effectiveness of the breakthrough may be improved, roughly up to about 60%.

In comparison, foreign exchange investment experience focuses more on the evaluation and response strategies of low-probability events.

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These low-probability events may include unconventional situations such as sudden international political crises and market turmoil caused by natural disasters. The accumulation of experience usually requires investors to personally experience various market fluctuations and special situations in the actual foreign exchange trading process, and continue to learn and summarize lessons. This experience is personalized and is based on the investor's personal trading history, risk preference and decision-making style, so it is difficult to directly impart through traditional education channels.
In short, foreign exchange investment knowledge constitutes the theoretical cornerstone of investment activities, while foreign exchange investment experience is the deepening and application of knowledge in actual operations, especially when facing those uncommon but low-probability events that may have a significant impact on investment results. A successful foreign exchange investor needs to have a solid knowledge reserve and rich practical experience to cope with the complex and changing market environment.

Foreign exchange trading sense and understanding, in-depth analysis is a higher-level ability requirement than keen insight. It further emphasizes that traders cannot just stay at the superficial observation of market phenomena, but rely on deep professionalism and rich practical experience to dig deep and explore the underlying operating logic behind the market.

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In this process, various complex and intertwined factors such as monetary policy adjustment decisions based on macroeconomic conditions, dynamic changes in the internal competition pattern of the industry caused by various factors, and fluctuations in investor group sentiment caused by various factors are all included in the rigorous analysis framework of traders without exception. Traders need to rely on their strong logical analysis ability and rich experience reserves to analyze the intricate interactions between these factors and sort them out clearly, so as to accurately grasp the internal context of the market and provide a solid and reliable basis for subsequent trading decisions.
This unique understanding formed by keen insight and in-depth analysis is by no means a simple, superficial intuitive feeling, but a highly professional and forward-looking result extracted by traders after fully using rational thinking to conduct comprehensive, systematic and in-depth analysis and judgment of various types of market information obtained. It is by no means limited to a superficial understanding of the surface phenomena of the market, but with deep professional knowledge as a solid foundation and rich practical experience as a strong support, it breaks through the fog of market appearances and reaches the core area of ​​the market essence, thereby achieving a deep insight into the laws of market operation.
This comprehensive ability based on long-term practice and highly sublimated is the crystallization of wisdom gradually accumulated and precipitated by foreign exchange traders through continuous exploration, experimentation, reflection and summary in the long and challenging market tempering process. In this process, traders deeply integrate the professional theoretical knowledge they have learned with the practical experience they have personally experienced, so that the two can penetrate and promote each other, forming a virtuous cycle of synergy and progress. The final formation of this ability fully demonstrates the foreign exchange traders' profound understanding and precise grasp of the market operation rules. They deeply realize that the market is by no means in a static and stable state, but is always in dynamic change, full of various unpredictable variables and challenges. Therefore, they can rely on their own deep understanding and flexible application of market rules, and according to the specific market conditions in different periods and situations, quickly and accurately adjust trading strategies, make the most appropriate and targeted trading decisions, so as to effectively respond to the ever-changing and complex market situation and ensure steady progress in the foreign exchange trading market.

13711580480@139.com

+86 137 1158 0480

+86 137 1158 0480

+86 137 1158 0480

Mr. Zhang

China · Guangzhou