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What are the manifestations of foreign exchange positions? How do I set up a Forex position while trading?

2022-01-27

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What are the manifestations of foreign exchange positions?

(1) The total amount of foreign exchange sold exceeds the "oversold position" of the total purchase;

(2) "Overbought Position" in the opposite situation;

(3) The "balanced holding" (SavarePosition) of which the total amount of buying and selling is roughly equal.

The first two will allow foreign exchange banks to be favorably or unfavorably affected by changes in exchange rates. In order to avoid the risk of exchange rate fluctuations, foreign exchange banks must conduct foreign exchange transactions with other foreign exchange banks, that is, buy when they are "oversold" and sell when they are "overbought", so that the foreign exchange holdings are fully Possibility to close the difference (Savare).

How to set the size of foreign exchange positions when speculating in foreign exchange?

How to set up forex trading positions? The premise of setting up a position is that I never lose more than 1% on any trade. If I have $100,000 in my account, I can't lose more than $1,000 on a trade. To know your stop loss level, first imagine the level you can accept if the trade loses, and then set your position size accordingly.

for example:

1. A position of 20% of the total trading capital, plus a potential stop loss of 5%, which is 1% of the total capital.

2. A position of 10% of the total capital, plus a potential stop loss of 10%, that is, 1% of the total capital.

3. A position of 5% of the total capital, plus a potential stop loss margin of 20%, which is 1% of the total capital.

The Average True Range (ATR) can give you an idea of the daily price range and help set up positions based on your time frame and stock volatility. If your opening price is $105 and your stop loss price is $100, then the ATR is $1, and the 5-day swing time can be used for stop loss.

Position positions from your own stop loss levels and market volatility. The space requirement for your stop loss determines the size of your position setup. If you limit yourself to only risking a 1% loss when you fail a trade, then each trade is only a trivial one out of the next 100, and your emotions will be minimally disturbed. Even after a string of failures, you still have a chance of surviving, so you can fight for your chance to succeed.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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What are the manifestations of foreign exchange positions? How do I set up a Forex position while trading?

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