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Foreign exchange market psychological analysis of behavior


cashback forex exchange highestrebateforex Forex rebate for you such a market: a large group of people of equal rebateforexindonesiatelligence, facing roughly the same market information, using roughly the same analysis getforexrebate forecasting techniques, following the accepted rules of trading, a zero-sum game The result is that there are a few experts from a few thousand, tens of thousands of dollars to start, accumulated tens of millions or even hundreds of millions of dollars of wealth, but also the masses have always made small profits and big losses, until the blood is lost. For most small investors, they are in a more unfavorable position: limited experience, to pay a considerable tuition for each trap they have Forexrebateforyou encountered; limited capital, often just entered the door of the foreign exchange market, has run out of food; the possession of information is also at a disadvantage Therefore, the general public in this fascinating zero-sum game, often become the bottom of the pile The purpose of this section is to tell the public the fundamental reason for their failure In a sense, the losers in the foreign exchange market, often not to defeat the market, but not to defeat themselves 1, one of the psychological misconceptions: the crowded place to rush to blind obedience is a fatal psychological weakness of the public An economic data published, a news suddenly flashed out, a 5-minute price chart breakthrough, it The first to jump into the market is not afraid to lose money together, only afraid that everyone makes money only they did not earn remember the 1991 Gulf War, the pre-war situation a little nervous, the dollar rose, foreign currencies fell, January 17, the day of the war, almost 100 percent of investors are jumped into selling foreign currencies, the results of foreign currencies all the way up, the single was trapped, are coincidentally confident to wait for the market to turn back, the results naturally The result is heavy losses War and turmoil are conducive to the strengthening of the dollar, which is a basic principle, why will it suddenly fail? The public often make the same mistakes in the market, sometimes different financial companies are almost the same price of the single trapped, so that we all suspect that the market has a pair of eyes on their own In fact, the market is fair, the foreign exchange market is now nearly a trillion dollars a day of transactions, any individual is difficult to manipulate The beginning of September 1992 because of the European currency crisis, the market speculators threw the pound, so that the pound plummeted in a short period of time 5000 points, the Bank of England repeatedly intervene, and even the use of interest rate hikes, all to no avail in the foreign exchange market, for investors, do not go where the crowd is worth bearing in mind the aphorism 2, psychological misconceptions of the second: loss of fluke, win greed price fluctuations can be basically divided into uptrend, downtrend and disk trend, not counter-trend do single, if the counter-trend single is trapped, do not add to do single To pull down the average price of the big potential although the end of the time, but not to guess the top or bottom of the market price and hold on to a price, the top of the market price, the bottom, to be formed by the market itself, and once the formation of the potential, is the biggest profit opportunity, to decisively follow up … … these do single truth, many investors know, but in practice, they repeatedly do single against the market, a single Set hundreds of points and even one or two thousand points, is not uncommon, what is the reason? An important reason is due to limited capital, into a single regardless of losses, profits, are disturbed by the monetary gains and losses, lost the ability to follow the technical analysis and trading rules Some investors often like to lock single when doing the wrong single, that is, with a new buy order or sell order to the original loss single lock this method of operation is invented by some financial companies in Hong Kong, Taiwan, which allows investors to accept losses when the psychological Easy to maintain a balance, because investors can expect the price to go to the head of the open single In fact, investors in the lock single, reconsider making a single, often instinctively close the single profit, leaving a single loss, rather than consider the market trend in most cases, the price will continue to go in the direction of the investors losses, and then lock, and then open, unknowingly, the lock single price will be hundreds of points Hundreds of points to expand the understanding of the lock single, unintentionally become a single time to do counter-trend occasionally catch a rebound of one or two hundred points, but also often because the price of the loss single is too far away and refused to cut a single, the results are still increasingly large losses Probably every investor knows the importance of quickly cutting loss single, newcomers lose money are lost in the drift single, veterans lose money are also lost in this, drift single is the most fatal error of all mistakes, but, the Investors still repeat this mistake again and again and again, what is the reason? The reason is that ordinary investors often by the feeling of single, while the master is often according to the plan to make a single blind single resulting in losses, hanging their heads, nervous million percent, knowing that the trend has gone, or fluke psychology, indecisive, and constantly relax the price of the stop loss plate, or no stop loss plate concept and plan, always look forward to a complete reversal of the market price in the next resistance point over, the results of a loss that is enough to hurt the vitality and this Losses born of fluke corresponding psychological misconceptions, is the winnings of greed under the buy order, the price is still rising, why single? The price began to fall, to take a look, and so the single turn profit for loss, more reluctant to single, to be forced to cut the head out of the field, has lost a lot of money Many people often have this experience: loss of money single dragged again and again, has lost hundreds of points, a fluke back to only a loss of 20 or 30 points, expect to level the commission and then out, a fluke to level the commission, and expect to earn a few dozen points and then out of the field … … the results of greed Often, as if the market price has eyes, always in and you want to close the price of only a little short of turning around and go, and never return After a few losses, it will be fear of the market, occasionally catch the big trend, the price into the good, but the set of ten points eight points will be nervous, so easy to close the commission to earn 10 points 20 points, it will close the position in a hurry when the loss of money refused to yield to the market, hard to top, make money 3, psychological misunderstanding of the third: superstitious foreign objects rather than the market itself into the transaction, another major psychological misunderstanding is superstitious market news, rumors, rather than obey the trend of the market itself 91 February 7 a few days ago, the Bank of Japan had intervened in the market to buy the yen and throw the dollar, so that the yen strengthened to 124 near February 7 Around February 7, the Bank of Japan began to intervene in the market again, the Japanese government officials also made several statements that the United States and Japan agreed to continue to strengthen the yen, so investors flocked to buy the yen, however, the yen began to fall in this case, investors often do not go to find and believe the reasons for driving the yen down, but because there is to buy the yen single trapped, they look forward to the Bank of Japan every day to save themselves The result In this case, almost every day, Japanese officials talk about the yen should be stronger, and sometimes the Bank of Japan also intervened three or four times a day to buy the yen, but the price fell all the way down, down almost a thousand points, many investors only do one or two buy the yen single, the loss of six or seven thousand U.S. dollars, cut the single cursing Japans word, but do not reflect on why they will lose so much money so that investors lose money is not the Bank of Japan, but the investors themselves. But the investors themselves because at that time, the yen due to a number of scandals and political instability, the market chose this factor, and investors can not believe the market itself ordinary investors of course, there may be a first-class foreign exchange market, the key is to overcome the psychological misconceptions even the big banks traders, into the psychological misconceptions, but also inevitably lose money, and eventually eliminated by the market retail investors can actually There are three kinds of people The first is the foreign exchange market is basically still very unfamiliar beginners; the second is in the foreign exchange market has a little experience, think that the technical analysis, basic analysis has a unique experience of people; the third is after many years of careful study and practice, indeed, has been perfect people The second kind of people are the largest group of retail investors, but also the most likely to lose money group, they are often overconfident that they They tend to be overconfident that they can easily use their own mastery of the method from the foreign exchange market to make a lot of money, the result is often: they fell into the trap of the market, until the capital lost, only to find themselves on the cutting loss single to fast, flat win single to slow and so the most basic foreign exchange market winning skills, have failed to thoroughly grasp a view that foreign exchange operations like cooking, raw materials, recipes, etc. are similar, but the dishes cooked In fact, the foreign exchange operation is closer to the game, like playing chess, chess, the same game, different players to deal with, the end or win or lose or and, the top masters can only be a few both hard work and perception of the people another part of the people in overcoming weaknesses after the growth of experience, the opportunity to become a good player in the foreign exchange market, and a lot of people even with experience will eventually lose of course, the foreign exchange market is not eliminated Does not indicate that you have intellectual problems, but simply that you can not adapt to this market at present. Many ambitious people, chess skills may also be very ordinary, so if your savings are not easy to come by and not much, do not have to be used to prove that you will play a single know, occasionally win a game of chess does not equal a good chess player, however, the foreign exchange market, although the opponent is deep and mysterious, but you can often join in the middle, patiently wait until you are easier to This is a very good way to make up for your lack of skills simply rely on technical analysis or basic analysis, it is difficult to make accurate forecasts of the foreign exchange market trends because the impact of price changes are complex and variable factors, there are too many unpredictable events, it is difficult to rely entirely on technology and possible laws to solve the problem Technical analysis techniques, some practical, some of them are fancy decorations, the real chances of winning Im afraid that the very high probability of success will not be easily revealed, because the use of more people, it may fail in the foreign exchange market such an effective market, it is impossible for everyone to make money at the same time even if it is a practical technique, in different occasions and different times its utility may be very different For example, the broken point chase method, more than a decade ago was once very effective, now technical analysis techniques so common, the market trend false break point phenomenon will The broken point chase method will not have a chance to win every time instead of spending energy on some flashy technology, it is better to get down to earth to understand the characteristics of the foreign exchange market trend, especially the behavior of the price level trend in a particular time characteristics of the foreign exchange market risk control foreign exchange market is a very risky market, its risk mainly lies in the decision of the foreign exchange price variables are too much although the existing books on foreign exchange volatility Principles of the book can be said to be full of cattle, some from economic theory to study, some from mathematical statistics to study, some from the geometry to study, more from the perspective of psychological and behavioral science to study, but the volatility of the foreign exchange market is still often out of the investors surprise on the foreign exchange market investors and operators, all aspects of knowledge should have a little, and the awareness of risk control and plan is indispensable  1, to do a single plan business people have their own set of tricks to do business, some people according to the plan step by step, some people with intuition when in and out In general, these two kinds of people can not be wrong way of doing business with intuition people naturally do not need to seek advice from books, but with the plan to do business with the best patience to read this chapter to do foreign exchange business plan has many principles and rules, but if it boils down to the simplest elements, it Once this starting point is established, price level changes can be categorized as up, down, or status quo A trading plan must create a blueprint of actions for entering the actual trading market Once any of the three changes in the price level occur as described above, the trader can make a sell or buy according to the plan While there are many key factors to consider when making a plan, the core issue is always the circumstances under which to exit a trade that has been entered. The trader in the discovery of the market price in a considerable period of time will not occur when the important change to exit the transaction to exit a transaction has been obvious loss of money, the most effective procedure is to issue a stop-loss order single of course, the premise is that the trader has a number, he is willing to bear how much loss if he has set an acceptable level of loss before entering the transaction, then, once the market price has been set in advance of this point, the only thing he The only thing he can do is to issue a stop-loss order For a winning trade, how to develop the order in the trade is not as easy as developing a plan to deal with the losing trade orders so there are a number of possibilities If a trader has set a profit target before entering the trade, then a clear possibility is that once this target is reached, he will immediately issue a limit order, and thus exit the transaction In this case, the exit plan may be to sell at the stop-loss point or to sell when the index X gives a sell signal; whichever comes first. The ultimate goal is to accept profits unless he decides to try his luck again, he should always remember that he sees a clear line Many successful traders understand that money is easy to earn but difficult to protect the profit plan will be put behind the trader will eventually experience a painful truth: the tree is not growing in the sky 2, the elements of the plan capital any plan includes a number of elements The first decision to make is how much money to The actual amount of money used to do foreign exchange depends on many considerations: the first is the motivation of the trader, if only to try or do for fun, it is better to pay a little less money, and the second is the aggressiveness of the trader, how much he is willing to risk in order to make money and a related factor is the age of the trader, because it involves his family burden, health, work seniority, and his family to do speculative business on him These are not irrelevant factors. In conclusion, the bottom line is that a trader should not take a risk that the potential profitability is not commensurate with the importance of such profitability to him. There are a variety of methods of trading options, consulting, researching or following acquaintances, all of which are methods of choosing specific trading items which are better, this varies from person to person and of course there are some basic reference factors, for example, the method of trading options should have a theoretical basis if some of the basic concepts contained in a certain method do not make sense, then this method is not sufficient Secondly, the method of trading options should be able to tell the trader Finally, the method should provide some realistic way for the trader to exit the trade, rather than inducing the trader to exhaust his or her capital to engage in a trade. As in any other risky investment, the return is a function of the time required and is not measured only in terms of the monetary gain made. A small profit in two or three days is a successful trade; on the other hand, a small profit that takes two or three months to obtain, even if it is a 100% profit, is not necessarily a good value from a time perspective. Stop trading is an important part of the plan, which has already been described in the previous section, so we will not say more here. For prudence, he decides to start with the British pound and wait until he has gained some experience before entering other markets. This is in October and the British recession has caused the pound to fall but he feels that the current price of the pound already reflects the post-recession level and there is no reason for the price to fall further. He decided to buy the pound as further market analysis showed that the ratio between his potential winnings and losses was small and the time required was long, so he decided to withdraw his money as soon as possible to engage in other transactions He intended to lose up to $1,000 on the pound He was more concerned at this point with the potential loss of his trading capital than with the movement of the pounds exchange rate in the Trading memo column he wrote down if in a certain month before the market closed price if not to win the target point, and not to stop the loss point, then the account to end this transaction In such a simple transaction, here the details of the plan and consideration has been more than many traders in the actual transaction can do Therefore, it is not difficult to understand why so many people lose money in the foreign exchange futures market 4, the foreign exchange market Winners and losers of the foreign exchange market tide some get rich in a moment, some lost their fortunes in a snap of the fingers Win or lose, huge sums of money change hands people can not help but ask, how many people can win, how many people will lose? The most well-known contemporary speculative analyst of record, Brier Steward, once did an analysis of the futures markets win-loss distribution. He took 8,746 traders for analysis and showed that 75% of speculators were losers in this statistical sample, with 6,598 losers and only 2,148 winners. The distribution of winners and losers also shows that for most speculators, the amount of wins and losses was small, with 84% of the winners winning no more than $1,000 each over a nine-year period.

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