foreign exchange investment strategy is a more effective investment skill that many investors want. So, how to formulate foreign exchange investment strategy?
1. Operation direction: First, consider the direction of the short, medium and long-term market trends, and decide which type of operation you want to carry out, so as to carry out the layout of the operation. The direction of the long-term operation is the “potential” first, follow the direction of the market, do not subjectively preset the top and bottom. The operation of the middle line is heavier on “volume”, that is, the performance of the volume and price in the market. In the mid-term band trend, the relationship between volume and price reveals a very important signal, and the technical trend analysis is used as a reference for operation. In terms of short-term operations, the focus is on “breaking”, such as a breakthrough after a long-term market, seeking the best entry point purely from a technical point of view, and using short-term technical analysis as the basis for entry and exit.
2.capital planning: After deciding the direction of the operation, the overall capital planning must be made. First of all, decide how big the position you want to operate. Usually, the investment capital is used as a reference. Long-term positions can be invested with a higher proportion of funds, and short-term positions should preferably not exceed one-third of the total investment. In terms of capital control, it is best not to bet all the money. If all the funds are lost when the market is wrong, there will be no funds to operate in the future. In addition, when setting the strategy, the profit-loss ratio after the operation must be calculated first. Usually, 3:1 is more in line with the principle of speculation. If the profit-loss ratio of 3:1 is maintained every time you enter the market, you will make a profit every time you make money from a transaction. 50% of the total value is added to the next transaction as the transaction amount. When there is a loss, the next transaction amount is deducted from the loss amount. Even if the winning rate is only 1/2, the probability of losing five times is 0.1875. From the point of view, the probability of loss is close to zero. Therefore, good capital planning almost determines the good or bad of the operation strategy, and it must not be underestimated.
3.attack and defense must have a plan.
he formulation of the strategy is the first defense, and only with a solid defense plan can we attack the outside world, just like the war between the two armies. If there is no strong backing or flexible retreat, the odds of winning are certainly not high. On the contrary, it is easy to be a last-ditch, desperate gamble.
At the beginning of trading, you are often faced with the embarrassment that the market is swept up and down, sometimes making a profit and sometimes losing. If you don’t reach the bottom line of defense, don’t rush forward, you must have patience and self-discipline, and avoid the success or failure of the operation due to the ups and downs of emotions. When the trading strategy is formulated, the offensive strategy must also be formulated. When will you increase the stake? How much to add? Offensive plans can increase profits, but may also lead to larger losses. Don’t make overweight moves when you lose.
From a business point of view, when you buy a batch of goods but can’t sell them, and the market price keeps falling, will you buy more? The same is true of the concept of overweight. When the market operation is in a state of loss, it is like the purchase of unsalable goods. You can only find a way to deal with the loss, and how to have the spare capacity to overweight again.
Therefore, a perfect offensive and defensive plan can know the maximum loss of each transaction before entering the trade, and within the range that can be tolerated, it can be calm in the face of short-term market fluctuations.
4.the setting of the stop loss point.
In the face of different stages of operation, the setting of the stop loss point is also different. In terms of long-term operations, the choice of stop loss requires a higher proportion, which accounts for a higher proportion of funds, in order to prevent being swept out of the market due to a temporary reverse market. The choice of stop loss for mid-line operation usually tends to be technical, with the trend line of the current trend or the high and low points of the previous wave as a reference.
The choice of stop loss tends to be smaller, often using the previous day’s high and low or opening and closing prices as a reference. In addition, it is still necessary to consider the setting of time stop loss. Before formulating an operation strategy, it is necessary to assume the duration of the market in this band. When there is a trend that should be initiated but not initiated, the time stop loss must be used to respond. This kind of stop loss Most of them are used in false breakout trends, which are difficult to set up and require rich market experience. However, investors can observe from historical trends to find the number of such false breakouts in past trends, and count the number of days they occur. , as a reference for setting the stop loss point of the operation strategy in the future.