The method of foreign exchange transaction fund management directly determines the life and death time of “funds”, which is a very important link in foreign exchange transaction.
For foreign exchange margin trading, the greater the leverage, the greater the risk, because the more hands you can operate. So the first step is to control the number of hands. I studied a definition of the number of trading hands: account balance × 2% ÷ stop loss range ÷ 10, say $2000. If the stop loss range is 40 points, then the number of single hands is 0.1. In this way, the maximum loss of a single transaction does not exceed 2% of the total capital. It is very stable and effective to operate according to this number of hands. In the future, with the increase of capital and experience, the number of transactions will also increase, and compound interest operation can be carried out（ College of foreign exchange www.waihuibang. COM / fxschool /) if the operation results are not good, the funds are reduced, and the corresponding number of orders is also reduced, which is in line with common sense. In addition, I have successfully developed a “position calculation software”, which can automatically calculate the number of hands per order without manual calculation, which is very convenient and practical.
Another important concept in fund management is pyramid position adding. There are often two or more entry points for a transaction. After placing an order at the first entry point, you can add positions at the second entry point in case of profit. The number of positions added is less than that of positions added for the first time. This is like a pyramid, which is wide at the bottom and narrow at the top, so as not to excessively raise the cost. In addition, it should be noted that in the case of loss on the first list, never add positions on the second list, and don’t try to amortize the cost down, which will only make mistakes again and again.
In this article on fund management, we explained three definitions: how to calculate the number of trading hands, the maximum risk to be borne each time shall not exceed 2%, and when overweight, we should adopt the homeopathic pyramid position. I hope Huiyou will firmly remember the concept of these transactions and realize stable profits as soon as possible.
Livermore’s famous saying: I find that studying the key points has an incredible effect. You will find that you have found a gold mine, which will bring you great joy and satisfaction.