How to set the stop loss of foreign exchange? What are the stop loss techniques of foreign exchange?
Foreign exchange stop loss is a skill that traders must master in foreign exchange trading. The purpose of stop loss is to let traders control the loss in a small range. Having good foreign exchange stop loss skills and methods can make traders survive in the foreign exchange market for a long time. Stop loss is a trading skill that beginners of foreign exchange must learn, because stop loss is the most effective measure to prevent risks in foreign exchange trading, which can help traders effectively avoid position explosion. So how to set the foreign exchange stop loss? Today, I'd like to introduce how to set the stop loss of foreign exchange trading.
Why stop loss should be set in foreign exchange speculation? There is no certainty in trading. Any of our forecasts are just forecasts. It is uncertain for us to judge and analyze the market according to this forecast. In the face of this uncertainty, we need to have corresponding measures to prevent the expansion of risk, so the stop loss arises at the historic moment.
How to set foreign exchange stop loss? Foreign exchange stop loss should be combined with the general trend of the market. There are three major trends in the foreign exchange market: up, down and consolidation. If stop loss is set during consolidation, then the error rate of stop loss is relatively high at this time. Therefore, the setting of stop loss should be combined with the trend of the market. Generally, during consolidation, investors can recuperate at this stage.
Foreign exchange trading stop loss setting method:
1. Stop loss after the important support or resistance level is broken. Important resistance or support positions are as follows: high or low prices over a long period of time; positions provided by trend line, golden section, or moving average system, etc.
2. Stop loss when the absolute loss reaches. The key point of operation is to set up the maximum loss limit 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 50 points per hand, that is, 500 US dollars. Once the amount of loss reached, no matter what the price immediately stop loss out.
3. Stop loss after self endurance limit is reached. This kind of stop loss method is often used by beginners. 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 losing immediately, even if you just set up the position.
Foreign exchange stop loss technique:
Foreign exchange stop loss skill one, to be prepared in advance. It's a good habit for traders to set a stop in advance when placing an order. It is often too late for traders to consider stop loss criteria when losses appear. Once entering the foreign exchange market, traders should have enough awareness of risk prevention.
Foreign exchange stop loss skill 2, combined with trend stop loss. Stop loss setting in foreign exchange trading must be combined with the trend. There are three main foreign exchange trends: up, down and shock consolidation. When the market trend is in shock consolidation, the error probability of stop loss in a certain range will be greatly increased. Therefore, the specific implementation of foreign exchange stop loss should be combined with the trend.
Foreign exchange stop loss skill 3, with the help of technical tools to stop loss. Traders can choose foreign exchange trading tools to grasp the specific stop loss point. For example, technical indicators and foreign exchange charts are good analytical tools. But traders should also combine their own actual situation to use, can not blindly follow suit.
[disclaimer] the publication of this article by finance managers for the purpose of transmitting more information does not mean that they agree with their views or confirm their descriptions. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk