Some Thoughts on Trading with Small Profit

Let's first think about what is a small-profit transaction? Small-profit trading is considered to be a range trade, but it is a small-scale trade. Its trading method is to make orders according to the position, which is known as selling short when encountering resistance and doing long when encountering support. After everyone understands the basic concepts, think about another question: Are all currency pairs suitable for small-profit transactions? Are all situations suitable for trading? My answer is: No. Only currency pairs with low volatility and currency pairs with small spreads are suitable as currency pairs for small-profit transactions, and it is only suitable for trading during inactive periods.

We all know that there is high volatility in the currency pairs related to the US dollar. According to the above-mentioned low-profit trading elements, the direct currency pairs are basically not suitable for small-profit trading strategies. There is no doubt that only cross currency pairs are suitable. Among these cross currency pairs, EUR/GBP and EURCHF are more suitable for small-profit transactions . There is a positive correlation between interest rate spread and currency pair volatility, that is, the smaller the interest rate spread, the smaller the volatility. Of course, there are some special cases in practice, such as USD/JPY, which is a direct currency with a large interest rate spread but small fluctuations. disk currency pair.

Friends who have done trading know that the fluctuations in the Asian market are the most flat during the four trading sessions of the day, so I think this is the best trading session for small profits. Trading during this session is conducive to good control of the risk-reward ratio, and finally Can significantly improve our low-margin trading performance. However, here is a special reminder that all positions must be closed before the Asian-European market overlaps, because changing hands at this time will cause abnormal fluctuations in the market.

Friends who like small profit trading can choose some currencies according to the principle of small profit trading, and observe their fluctuations in the Asian market, such as the average fluctuation points. However, there are a few things to pay special attention to. At the beginning of the opening, large trading institutions will use the opening to create abnormal fluctuations, so the up and down swings are relatively large, so you should avoid the opening for at least 1-2 hours. Secondly, for the release of some important data Nodes should also be avoided.

Next, I will talk about the specific operation from the micro level :

1. Operation time frame selection: 5 minutes.

2. Entry and exit issues: (when oscillating ) do not set a stop loss before 12 o’clock. If there is no profit close to 12 o’clock, a reasonable stop loss should be set to limit losses. This stop loss setting is not very different from other types of stop losses. Similarly, because the characteristics of thin-profit trading determine that risk is higher than reward, we should focus on the winning rate rather than the risk-reward ratio.

When there is no shock, stop loss points should be set according to short-term resistance and support. When buying and selling, refer to oscillators and candlestick patterns.