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

The applicability of the fourth dimension, namely the market profile or TPO indicator, in the foreign exchange investment and trading market is an important topic of great academic and practical value.

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Through multi-dimensional, in-depth quantitative research on the global foreign exchange investment and trading market and extensive industry research, many senior traders and market researchers have found that although the fourth dimension (market profile or TPO indicator) shows high potential for foreign exchange investment and trading concept characteristics from the theoretical framework and model design level, however, due to the relatively small proportion of traders using this indicator in actual trading scenarios, its effectiveness in the market is inevitably limited to a certain extent.
In the complex and highly dynamic field of foreign exchange investment and trading, the market popularity of an indicator or trading concept is often more critical in determining its actual application effect than its own pure theoretical quality. This is mainly due to the fact that when a large number of traders use the same indicator in the same time frame, the convergence of market behavior caused by the indicator will significantly enhance its influence in the market. At the same time, through the continuous correction of the market feedback mechanism, its accuracy may also be improved accordingly.
The four-dimensional space (market profile or TPO indicator) is a trading system based on the principle of the bell curve. Looking back on history, the system was widely popular in the financial trading markets of Taiwan and Hong Kong 20 years ago. As a professional manager with more than 20 years of rich foreign exchange investment and trading experience and managing multiple large trading accounts at the same time, according to my long-term practical experience and data analysis, although the trading concept represented by the four-dimensional space has a certain reference value in market analysis and trading decision-making, in the actual high-frequency and complex foreign exchange trading environment, the indicator itself may not be a necessary condition for achieving a successful transaction.
Foreign exchange investment trading indicators are by no means just a simple, isolated trading tool. Behind them are deep-seated specific trading methods, market cognition concepts and risk management logic. If foreign exchange investors and traders can organically integrate the concepts represented by the four-dimensional space with their existing trading strategies, risk preferences, and fund management methods, and thus build a complete and personalized trading system, it will undoubtedly be a valuable strategic choice in the fiercely competitive foreign exchange market.
In summary, although the four-dimensional space (market profile or TPO indicator) is not a mainstream trading indicator in the current foreign exchange investment and trading field, the unique concepts and methods it carries still have extremely high research value and reference significance for foreign exchange investment traders to deeply understand market behavior and improve the trading strategy system. It is worthy of systematic and in-depth research and exploration by practitioners and investors.

The logic of futures trading and the logic of foreign exchange investment trading, the logic of spot trading is essentially based on the supply and demand relationship between the two parties to the transaction.

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When one party holds goods and has the intention to sell, and the other party has the demand to buy, both parties seek corresponding economic benefits by accurately positioning their roles in the market and relying on refined operation strategies.
The logic of futures trading presents a significant feature: when the supply of a certain commodity in the market increases significantly, the demand side usually adopts a strategy of reducing purchases, which leads to a decline in commodity prices. The continued decline in prices will further suppress the market's enthusiasm for buying. On the contrary, when the supply of market commodities decreases, the demand side's willingness to buy will increase, thereby pushing prices up. The rising trend of prices will attract more market participants to join the buying ranks. If the supply of market commodities is in a relatively balanced state, the trading subjects will generally choose to wait and see, waiting for a significant change in the supply, that is, there will be a situation of oversupply or shortage of commodities. From a fundamental level, the core of futures trading is that its trading process often needs to break the conventional thinking pattern and break through the inherent limitations of traditional human nature in investment decision-making, so as to achieve profit goals.
Based on the above logical framework, the logic of foreign exchange investment trading is analyzed:
The logic of spot foreign exchange investment trading is similar to traditional spot trading. When one party holds a specific currency and intends to sell it, and the other party has a demand to buy the currency, both parties can obtain corresponding returns by clarifying their own positioning in the foreign exchange market and relying on long-term and unremitting management methods.
The logic of futures foreign exchange investment transactions is as follows: when the holdings of a certain currency in the market increase, investors' willingness to buy the currency will decrease, resulting in a drop in the currency price, and the price drop trend will further weaken the market's willingness to buy. On the contrary, when the holdings of the currency in the market decrease, investors' willingness to buy will increase, pushing up the currency price, and the price increase will trigger more purchases. If the market currency holdings are in a relatively stable situation, investors usually choose to wait and see, waiting for the currency holdings to fluctuate significantly, that is, there will be an oversupply or shortage of money.
In fact, in the vast landscape of the global financial market, the foreign exchange market occupies a relatively limited share and belongs to a niche segment, while the audience of the foreign exchange futures market is even narrower. Against the backdrop of the continuous evolution of the current global monetary payment system, the long-standing dominance of the US dollar in the field of international payments is gradually facing challenges, and its importance is declining. Affected by this macro trend, the trading volume of the Chicago foreign exchange futures market has been declining year by year. From a long-term development perspective, the foreign exchange futures market may even disappear from the market in the future.

In the scope of foreign exchange investment and trading, investors usually do not choose to close their positions in advance based on the general principle of risk management when and only when the preset stop loss level is not reached.

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In the actual process of foreign exchange trading, the stop loss mechanism is the core link of risk control. If the stop loss order is allowed to be revoked at will, the effectiveness and reliability of the mechanism will be seriously eroded. This behavior essentially deviates from the original intention of stop loss setting, and is similar to setting stop loss arbitrarily without basis, which seriously lacks the rigor and scientificity required for professional trading operations.
When constructing a foreign exchange trading strategy, the precise setting of the stop loss point needs to be closely based on the support and resistance levels under the technical analysis framework. From the analysis of historical data and market behavior, in normal foreign exchange trading market fluctuations, price retracements generally cannot reach the support or resistance levels accurately calculated in advance by technical means.
However, once the price trend is abnormal and retreats to these key technical points, it is very likely to become a strong signal of market trend reversal, indicating that the market will enter a new stage of development. At this time, investors need to be highly vigilant and prudently adjust their trading strategies.

In foreign exchange investment and trading, after the market trend is established, accurately identifying the callback phenomenon and trend reversal that appear in the middle of the market development has become a core problem that investors need to solve urgently. This is not only related to the grasp of trading opportunities, but also directly affects investment returns.

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In the field of foreign exchange investment and trading, clear and rigorous trading rules are crucial for investors. Specifically, when the general trend is in an upward trend, if the price retreats by 10%, or the price retreats to the vicinity of the 5-day moving average and the 10-day moving average, this is a key signal node. At this time, investors need to make accurate decisions based on their own risk preferences and investment strategies, and can choose to close some positions, or even all positions in extreme cases.
Similarly, when the general trend is downward, if the price rebounds by 10%, or the price rebounds to the vicinity of the 5-day moving average and the 10-day moving average, investors should strictly follow the established trading rules and close part or all of their positions in time. Through such operations, investors can effectively control investment risks and reasonably lock in investment returns, thereby maintaining a steady investment pace in the complex and ever-changing foreign exchange market.

In the scope of foreign exchange investment and trading practices, based on a comprehensive risk management framework and in-depth trading psychology research, it is generally not recommended that investors use their own funds to engage in foreign exchange trading operations.

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From the perspective of behavioral economics and psychology, human nature has universal inherent characteristics. In the process of resource acquisition, an individual's deep perception of the difficulty of acquisition will significantly increase the value assessment of the resource, and when faced with resource losses, it will breed a strong loss aversion. Especially when it comes to funds accumulated by individuals through long-term hard work, investors are very likely to fall into the psychological pattern of risk aversion in the process of building investment decision-making models. This psychological framework will greatly limit the ability of investors to execute aggressive trading strategies based on pure market signals in trading practice.
From the professional dimension of trading psychology, in the field of foreign exchange investment, the use of other people's funds in the transaction model can reshape the psychological bearing system of investors to a certain extent. This is mainly due to the partial external transfer of the responsibility for profit and loss at the psychological level, which makes investors' psychological stress response more stable when facing the high-frequency fluctuations of the foreign exchange market. Take the foreign exchange investment traders of banks, sovereign foreign exchange management institutions and professional fund companies as an example. In actual trading activities, the main body of funds they use is not their own funds. Therefore, in the structural type of fund use, they are in a typical external fund-dependent role positioning. However, according to the principle of human behavior motivation extended from Maslow's hierarchy of needs theory, when the individual's basic physiological needs and safety needs are effectively met and in a relatively stable living environment, their risk preference will naturally tilt towards the conservative direction. This behavior feature is clearly shown in the performance data statistics of the above-mentioned institutional traders, that is, the overall performance shows a relatively obvious statistical feature of mediocrity. This logical chain clearly reveals the complex causal relationship between the fund utilization model and the performance of traders in the field of foreign exchange investment, as well as the dilemma of decision-making derived from it.
In the ecosystem of foreign exchange investment transactions, if foreign exchange investment traders lack the willingness and ability to bear the basic risks of using their own funds to participate in transactions, based on the classic rational economic man hypothesis, it will be difficult for fund owners to build full trust in their professional qualities, risk management capabilities, and the adaptability of risk preferences. Based on this, fund owners will certainly not easily grant the trader the right to operate large-scale funds.
In summary, through a systematic and comprehensive analysis of multi-dimensional factors such as the macro market environment, micro trading psychology, risk-taking mechanism, and fund management strategy, it can be clearly seen that in the highly competitive and uncertain field of foreign exchange investment and trading, only those individual foreign exchange investment traders who have a broad strategic vision, lofty industry sentiments, and strong capital reserves can build a significant competitive advantage barrier, and ultimately stand out in the fierce competition in the market and achieve excellent investment performance.

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+86 137 1158 0480

+86 137 1158 0480

Mr. Zhang

China · Guangzhou