What are the methods of forex market stop loss? Stop loss in forex speculation is an important aspect. Many investors do not know much about the stop loss in the forex market.
In the forex market, it is very important to set up stop loss. There are three most important elements in investing in forex: the first is stop loss, the second is stop loss, and the third is stop loss. However, in practice, investors often cause huge losses because the stop loss is not set up scientifically. In fact, there are three common ways to set up stop loss positions:
1. Stop loss after important support or resistance level is broken: This is the most commonly used operation mode in actual combat. Investors in this position stop loss out of the proportion is very high. However, a careful analysis of the forex trend chart at home and abroad can find that in the forex market, there is often a reversal of the price trend after the resistance or support position is broken through.
Important resistance or support positions include the following: the dense transaction area where the price stays for a long time; High or low price in a long time range; The location provided by trend line, golden section, or moving average system, etc. The main reasons for the lack of reliability of these locations are:
(1) Large speculative funds can predict the approximate stop loss price of market investors. They even deliberately match a large number of transactions at some prices to form the illusion of strong support or resistance, and then break through these positions by virtue of capital advantages to make profits through reverse operation after the emergence of stop loss.
(2) The support or resistance positions provided by trend line, moving average system and golden section level are highly subjective, lack of reliable basis and foundation, and the accuracy is very low. Setting stop loss points in these positions is especially like leading the neck to death.
2. Stop loss after the absolute amount loss reaches: at present, this is the stop loss method adopted by many excellent traders abroad. The key point of its operation is to set the maximum loss amount of funds in the entry position, which is generally 5% - 20% of the occupied funds, or the absolute amount of the occupied funds, such as 100 yuan per hand. Once the loss limit is reached, stop the loss and leave the market at any price.
When using this stop loss method, you must pay attention to the following two points:
(1) Different stop loss limits should be adopted for different varieties or different operation periods.
(2) The established stop loss limit must be verified by probability in the market.
The advantages of this stop loss method are obvious:
(1) Highlighting the principles of fund management. Foreign experience shows that an excellent trader does not lie in how to analyze the market, but in how to manage funds well.
(2) It has the advantage of probability. The longer the operation time, the more obvious the advantage.
(3) The stop loss position is far away from ordinary investors, which prevents the market risk caused by the setting of the first stop loss position.
When using this stop loss method, we need to do a lot of statistics and analysis, determine the operation strategy, and find the best stop loss limit suitable for our own operation style.
3. Stop loss after self endurance limit is reached: this kind of stop loss method is often used by beginners. The author's experience is that using this stop loss method in short-term operation is still helpful to improve the yield. In fact, some excellent foreign traders often use this method.
The specific use method is: when your position has a loss, as long as you can bear it, you can hold your position, otherwise stop the loss immediately, even if you are a newly established position.
The author believes that this method is suitable for immediate short-term trading and experienced traders in the market, while novices are often shaken out at high and low levels.
The main reason for using this method is that if you "feel" uncomfortable after you establish a position, it is often because there is something unexpected in the market, although it may be because you have no time to analyze too much information for short-term trading, or you may not know it for other reasons, But long-term trading makes you "feel" the risk of the market. At this time, you should leave the market immediately.



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