Novice investors often see left-side trades and right-side trades when they are learning, and these two terms are not easy to understand. In fact, the trading on the left and the trading on the right are essentially the difference in the way of thinking of investors, which is reflected in the entry point on the K-line. This article will give you a detailed introduction to the difference between left-hand trading and right-hand trading, as well as the rules of left-hand and right-hand trading.
What does left-hand trading and right-hand trading mean in Forex?
1: When the exchange rate rises, the top of the exchange rate is used as the boundary. Any high-selling on the left side that has not yet formed at the "top" is a left-side transaction, and a sell-off after the "top" has fallen back is a right-side transaction.
2: When the foreign exchange rate falls, the bottom of the exchange rate is used as the boundary. Those who buy low on the left side of the "bottom" are left-side transactions, and those who chase up after bottoming out and rising are right-side transactions.
The difference between left-hand trading and right-hand trading
There are two diametrically opposed trading strategies in the market, one is trading on the left and the other is trading on the right. When the stock price falls, the bottom of the stock price is used as the boundary. Those who are low on the left side of the "bottom" are trading on the left side, and those who chase up after bottoming out are trading on the right side. The left system is a trading system with the buying direction and the stock price moving in the opposite direction; the right system is a trading system with the buying direction and the stock moving in the same direction.
The above two trading methods have their own advantages and disadvantages: in the fall, the cost of trading on the left side is relatively low, the distance from the bottom area is relatively high, and the safety factor is relatively high, but it also faces the risk of buying more and more and failing to buy the bottom in advance; The advantage of side trading is that the upward trend is obvious, and the probability of profit from buying is high. The disadvantage is that the cost of chasing high and intervening is high. After buying, the stock index often falls, and the risk of chasing up is also great.
Left and Right Trading Rules
Investors have a left and right trading rule: For medium and long-term trends, they must stick to the right side, and short-term trends must stick to the left side.
Simply put, investors should have a certain understanding of the actual price of the stock from a medium and long-term perspective. As long as the price is low in your judgment, then you can enter the market. In short-term trading, it is best to follow the trend, because short-term trend fluctuations are messy and disorderly, and investors do not need to care whether the price is reasonable.
The left side of the transaction pays more attention to whether the price is reasonable and whether it deviates from the normal value. As long as it is not right, it is the time to enter the market. Trading on the right side pays more attention to the trend, and only when the trend comes out is to follow the trend. The benevolent sees the benevolent and the wise sees the wisdom of these two trading methods.
In the process of practice, most investors in China adopt the right-hand trading rule, that is, when they see the stock price hitting a new high, they realize that the market is starting to chase the stock, but they often chase the stage high, especially in the This is the fundamental reason why only a few people in the stock market make money when faced with short-term volatility.
Is it better to trade on the left side or the right side of foreign exchange?
This depends on your personality. Some people like to chase the ups and downs, and some like to hunt for the bottom and escape from the top. There is no absolutely correct strategy. According to your own characteristics, choose a strategy that suits you, not necessarily a strategy that suits others. For you, choose a strategy that doesn't work for you.
It can be seen that the difference between the left-side transaction and the right-side transaction is obvious. Of course, they each have their own characteristics. Investors can choose according to their own investment methods. However, it should be noted that when doing medium and long-term trends, you must stick to trading on the right side, while short-term trends must stick to trading on the left side. This is a relatively basic common sense issue.
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Indonesia
2022-01-25
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