Ask for advice on how to manage trading positions in order to achieve long-term stable profits?

I saw a screenshot of the loss of a help-seeker last night, and suddenly thought of a sentence:

"When holding positions is keeping you up at night, it means you are taking more positions than you can handle!"

​Position, a topic that is very critical in trading and is always neglected, I think it is worth talking about today.

​Position is everything! This description is no exaggeration, because the position determines the floating profit and loss, and it also directly tests the tolerance of the trader. So how should individual investors control the position? How should different trading systems stick to the bottom line? In the next article, I will talk about it in simple words!

​How should traders control their positions? The core is just one sentence, there is no fixed value for a position, and a fixed position ratio is not suitable for everyone!

One, from small to large, repeated tests

​For investors who have just entered the market, my suggestion is to start from the smallest. Yes, you read that right, start from the smallest and slowly measure your own critical value. This critical value is the point where you can execute stop-profit and stop-loss. Don’t let The floating profit and loss is beyond your tolerance. After it is suitable, slowly stabilize it. Don’t change it easily in the next period of time, let alone change this rule because of short-term profit and loss, and consider increasing/decreasing after it stabilizes!

Second, many people think that a fixed ratio is a light warehouse or a heavy warehouse, which is not strictly prohibited

​I often mentioned to students before that one tenth position is suitable for short-term. But this is for the readers of the International Gold Trading School, that is, the readers of MT4 transactions. It is not applicable to other types of investors, because leverage and platform regulations must also be considered, such as 30% strong equality factors.

3. It is also necessary to adjust positions in different stages of the market

​​In a market with large fluctuations, such as the current gold, the daily fluctuation may be greater than the previous year’s one-week fluctuation. At this time, the position should be reduced and the stop loss should be appropriately increased to prevent the market from easily triggering the stop loss. damage situation! Many people don’t understand. For example, in 2018, I bought two hands of gold with 4 points of stop loss. Now I should buy one hand with 8 points of stop loss. The total risk is the same as 800 US dollars, but in terms of the degree of risk , 8 pips in one hand is much smaller than 4 pips in two hands!

Author: Kim Seung-ho

Learn the correct trading ideas and capture market trends in advance

No profit-loss ratio? No breakeven ratio? What money management do you have?

Before asking this question, you must clearly realize the importance of position management!

Water can carry a boat, and it can also overturn it. In the foreign exchange market, your position is your life. Many people go bankrupt because their positions are too heavy! Only when you are truly aware of this problem, will you take him seriously and implement him. Otherwise, the next time the brain gets hot, it will be forgotten.

As for how to manage positions, reply 1, and I will answer you.

Combined with your own methods, everyone's trading system is different.

Various methods finally come down to one sentence:

as long as you can afford it

Fund management is the foundation of account survival, but there is a big premise.

A trading system has three major elements, entry rules, exit rules, fund management, and fund management is based on clear entry and exit rules, that is, the trading model has been stabilized, how to identify the trading model has been stabilized, I have a way. An account has a minimum mini lot of 0.01. Do not deposit or withdraw funds for one year. After the last year, the net value of the account is higher than the initial deposit, or, don’t lose too far away from the principal. Then this model is considered stable. Why do you experiment like this? , because the simulation trading is not real money, I am afraid that you will not care about it, and if you do it with one hand, your trading model is not stable, and you are afraid that you will lose money, so this skill allows you to care about him, and the way to avoid big losses is a compromise. .

After reaching the above level, let’s talk about fund management. I think the opening management of the turtle trading rules is good. The opening position is 1% of the total capital. If you want to increase your position, you can increase this ratio appropriately, such as 2%. What are the benefits of opening a position according to the percentage of funds? When your account is profitable, because you open positions according to the percentage, your position is gradually increasing, which is equivalent to using the power of compound interest, and the growth of funds is faster than that of fixed positions. When the trading system encounters a loss of funds during an unfavorable period, opening positions will also be reduced according to the proportion of funds. The total risk of the account is controllable, and it is a very good fund management model.

Are you satisfied with this answer?

Position management lies in whether you have a set of core algorithmic formulas. Strictly speaking, whether your own operating system supports these, position management must be combined with your own trading system. According to these calculations, you are more suitable for position management. If you judge whether the market is delayed or too early, you can establish your own hierarchical position building standards based on these small information. The most important thing is that all positions are made with 70% of your largest single drawdown funds, and 100% drawdown is used for accounting. A part of the funds is reserved in this way, and it is mainly used in the position where you feel best.

I can’t talk about long-term profits. The first thing to think about is how to ensure the safety of the principal first, and then talk about profits with little or no loss. I adopt modular stop loss

According to the capital situation and risk tolerance, set a suitable position and fix it

I personally recommend 1/3 of the position to operate, leaving a part of the position to fluctuate

Basic position management reference——

1000 US dollars, the total position is 0.1 lot, 10,000 US dollars, the total position is 1 lot, and so on is a relatively simple and safe position management

Of course, it is recommended to have a stop profit and stop loss, and do not carry orders without limit

Generally speaking, when it comes to positions, I personally feel that it is all about maximizing profits, but when it comes to profits, there are risks behind it. Personally suggest to fix the position and earn some value~㊗️Solid

First of all, there is one point that everyone needs to understand: position control cannot solve the problem of low winning rate, it just makes foreign exchange traders die slower, so that they have enough time and opportunity to get their own wave of market prices. It can be seen that position management cannot be discussed separately, but should be combined with each person's trading time period, psychological endurance and entry and exit basis.

For example, foreign exchange trend traders usually have a low winning rate, but the profit-loss ratio is quite large. This requires strict control of positions to reduce the cost of trial orders when conducting trend trading. Once the trial order is successful and profitable, it is necessary to continuously increase the position to increase its profit-loss ratio to make up for the disadvantages of the low winning rate. However, a short-term foreign exchange trader relies on a high winning rate combined with a low profit-loss ratio to achieve profitability, so he needs to increase his capital utilization rate to ensure the maximum profit as much as possible. Of course, the stop loss of short-term traders is very strict, which is why On another level, the risk brought by heavy positions is reduced.

The purpose of foreign exchange position management is to cut losses and let profits run. In order to achieve this goal, some principles need to be followed:

1. Never put all your funds into the foreign exchange market. Especially in the novice stage of foreign exchange or in the state of "small profits and big losses" for a long time, investing all funds in the market will not only magnify the losses, but also affect the mentality of traders to a certain extent. Of course, short-term traders can try to take heavy positions when the stop loss is firm and the profit-loss ratio is reasonable, but they must ensure that the entry of the same standard is to open the same position. embarrassing situation.

2. It is normal for occasional continuous losses to occur in foreign exchange transactions. Position management must ensure that after continuous losses, the remaining funds can still open positions with the same number of hands. If this principle cannot be followed, it is very likely that you can open 100 lots of orders, but after several consecutive losses, you can only open 90 lots of orders. Tougher than 100 lots.

3. There must be a scientific strategy for adding and subtracting positions. Although foreign exchange trading is a probability game from a mathematical point of view, it is by no means a static model. In the ever-changing market, after we enter the market once, there may be market trends that allow us to increase or decrease positions. At this time, your winning rate and profit-loss ratio are also changing, which requires your position management. The content is in it.

Is there a general rule for specific position management that is accurate to numbers? For example, what percentage must be used to open positions, and what percentage should be used to increase or decrease positions? Unfortunately, no!

As I said at the beginning of this part, the management of foreign exchange positions should be designed based on the basis of personal entry and exit and psychological endurance. Here I can only provide you with a way of thinking, and everyone needs to complete it according to their own relevant data. Position management strategy. What data or reference items do you need to base your own position management strategy on? I made the following statistics here for your reference:

1. Your own risk appetite. You have to determine whether you are aggressive or conservative, how much loss you can accept each time, and how much these losses correspond to the stop loss points in your trading system. The ratio of the acceptable loss to the stop loss points is your The amount of loss that can be tolerated by one point, and the fluctuation price per point of these amounts compared to the previous single lot is the number of hands you open for a single entry.

2. The winning rate of foreign exchange trading techniques. Your position management must be determined in combination with the winning rate that the trading method can provide, so as to ensure that your funds can survive the loss under the normal proportion of profit and loss times.

3. The risk-reward ratio of foreign exchange trading, also known as the profit-loss ratio. Winning rate and profit-loss ratio are a pair of twins, which I have mentioned in many previous articles. With the combination of win rate and profit-loss ratio, your position management must be able to withstand the "worst period" in trading, otherwise you will die tragically in the night before dawn before the dawn of your trading system .

In short, foreign exchange position management is not an independent static part, it is an integral part of the entire trading system. Above we only discussed position management and various factors related to it, but it does not mean that the trading system is just that. The entry and exit strategy and position management in the trading system complement each other, and the two are indispensable.

Long-term stable profit is an illusory lie. No matter how good your position management is, it cannot determine the profit and loss of your account! ! !

Why do I think long-term stable profitability is a lie?

Long-term stable profit, which can be divided into three groups of words, long-term, stable and profitable. First of all, in the long run, how long is the profit in the long run? There is no fixed standard for this. Some people have made profits for 5 consecutive years, some have made profits for 10 consecutive years, and some have made profits for decades but they lost everything with one careless move. Therefore, the concept of long-term is imaginary, it needs a reference object.

Secondly, the word stability also needs to be quantified. There is no fixed standard for what kind of transaction is stable. The premise is that the final result is to make money, and the transaction can not be ups and downs, it may be three steps forward and one step back. This is also a personal opinion and cannot be a standard. Stability is more than just the result, it also includes the state of the transaction, the state of the transaction for ten years.

Finally, there is profit. This is relatively simple, and the end result is to make money. But the three words can be combined together to make long-term stable profits, and the difficulty can be imagined, so it is meaningless to simply talk about this, or because it has no fixed standards.

At the same time, no matter how good the position management is, it is not the basis for directly leading to the profit and loss of the account. The final profit or loss of this transaction is not determined by position management. At best, it makes the account earn more and lose less.

In order to make a profit in the transaction, it needs to cooperate with market analysis, trading system, entry and exit rules, position management and other links. If there is a problem in any link, the final result must be a loss.

So, this question is problematic from the point of view. The focus of our trading research is still how to use our own ability to make money and maintain a stable profit within a certain period of time.

It is recommended to control the position within 10%.

Positions, leverage, margin, and types all matter. question too general

Calculate the number of safe steps for your position

Read the book Wall Street Ghost first, it should be helpful to you

Increase positions in equal proportions, increase positions in pyramids, increase positions in inverted pyramids, etc., but each position management needs a trading system that suits you, so let’s review it slowly by yourself.

$10,000 less than one lot