Shulou(Shulou.com)06/02 Report--

There is no best way in the foreign exchange market, only the most suitable one. As long as it is used properly, it will be a sharp weapon to turn defeat into victory; if it is not used properly, it will also become a hotbed of cocoons. Covering a position is a passive response strategy after being tied up. It is not a good way to release the hold-up in itself, but it is the most appropriate method in some specific cases. Now let's take a look at the five tips for trading experts to cover their positions.

1. You can't cover your positions at the beginning of a bear market.

People who speculate in foreign exchange understand this, but some small scattered can not distinguish between cattle and bears turning point how to do?

There is a very simple way: the exchange rate does not fall deeply and is determined not to cover the position. If the current foreign exchange price is 5% lower than the purchase price, there is no need to cover the position, because any intraday shock may lift the hold-up. If the current price is more than 20% or 30% lower than the purchase price, or even when some exchange rates are aborted, you can consider covering positions, and the room for further decline in the future is relatively limited.

2. The market will not fill its position until it has stabilized.

Positions cannot be covered when the market is in a downward channel or when it rebounds, because a further fall in the index will drag down most currencies, with the exception of a very small number of currencies that are strong against the market.

The best time for a master trader to cover his position is when the index is relatively low or has just reversed upward. At this time, the potential to rise is huge, the possibility of falling is the least, and it is safer to cover positions.

3. Weak currency does not make up.

Especially those currencies that do not rise when the market goes up, but follow when the market falls.

The purpose of filling the position is to use the profit of the currency that covered the position later to make up for the loss of the currency that was held up behind. since this is the case, there is no need to limit yourself to make up for the variety that has been tied up.

What variety to fill the position is not the key, the key is to make up the variety to achieve the maximum profit, this is to focus on consideration. Therefore, if you want to cover the position, you should supplement the strong currency, not the weak currency.

4. The super dark horse that skyrocketed in the early days does not make up.

There used to be many leading leaders in history, after sending out a short and dazzling light, they stepped into the darkness of a long night. This kind of currency will only get better and deeper, and will end up in a quagmire.

5. Seize the opportunity to fill the position and strive for success.

Never fill positions by stages or step by step. First of all, ordinary investors have limited funds and cannot afford multiple amortization operations.

Second, covering the position is to make up for the previous wrong purchase, and it should not be the second wrong trade in itself. The so-called step-by-step replenishment is to defend the imprudent buying behavior, covering the position many times, and the more you buy, the more you will fall into a situation where you can't extricate yourself.

The content of this article is sorted out by Baodi Finance and Economics: www.bkcj168.com.

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