cashbackforexindonesia

2023/2/25 15:08:50

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Compared to the stock and bond cashback forexfo.com">forextradingindonesias, the foreign exchange market has a higher r cashback forex indonesiak to survive in the currency market, you must have a good MoneyManagement strategy so that you can not only allocate limited funds scientifically, so as to obtain a better return on investment, but more importantly, when traders unfortunately encounter unfavorable circumstances can control losses within an acceptable range if the lack of a complete and scientific MoneyManagement strategy, even if you have good analytical and operational techniques can not reduce the Cashbackforextradingindonesia of death in the market. If you do not have a complete and scientific money management strategy, even if you have good analysis and operation techniques, you cannot reduce the probability of death in the market. In this paper, we use the classical probability model to illustrate the importance of investing an appropriate proportion of capital in the market and to reveal the potential harm of operating a full position. Event (IndependentEvent), that is, the occurrence of an event, and is not affected by the previous events or results of the coin toss, for example, assuming that the toss is a fair coin, so each time the probability of heads and tails is 50% Now if you ask to take the probability of four consecutive heads, you can use the following formula 0.5 × 0.5 × 0.5 × 0.5 × 0.5 = 6.25% Similarly, if the probability of a positive and negative occurrence is not the same, it is still possible to find the probability of a particular event occurring, for example, using the same example of four positive occurrences as above, only the probability of a positive occurrence is 60%, so the probability of a negative occurrence is 40%. Later, we will use this concept to calculate the probability of leaving the market with a loss caused by different trading methods. The system has a 60% correct rate, and assume that we follow the signals generated by the trading system to trade, so that we will have a 60% chance of profit for each entry operation The following two different hypothetical trading methods are discussed separately 1. Full position operation This scenario assumes that the amount of each transaction is the full amount of the account, each transaction is either double the profit or The complete loss scenario assumes that the account starts with $10,000 and only $10,000 is invested each time, so if the first trade is lost, $10,000 will be completely lost, and the probability of complete loss is 40% If the first trade is successful, then you will have $20,000, and you can have at least two more chances to trade, then on the third time you will have a chance to leave the market with a complete loss. What is the probability of leaving the market with a total loss? The probability of this happening can be expressed as 0.60×0.40×0.40=9.6%. This result means that if the first trade is profitable, the chance of leaving the market at a loss on the third time is about one in ten. That is, the sum of the probability of leaving the first and third times, as shown in the following equation 40% + 9.6% = 49.6% From the above results, we can find that even though we have a trading system with a 60% success rate, the probability of leaving the market at a loss within three times is as high as 49.6% Now if we consider the probability of leaving the market at a loss within five times, how much will it be? The probability of leaving the market in the fifth loss has two scenarios, namely {win, win, lose, lose, lose} and {win, lose, win, lose, lose}, and the probability of occurrence are: 0.6×0.6×0.4×0.4×0.4×0.4=2.3% 0.6×0.4×0.6×0.4×0.4×0.4=2.3% So the probability of leaving the market in five losses is: 40% + 9.6% + (2.3% + 2.3%) (2.3% + 2.3%) = 54.2% From the above results we can find the fact that even if you have a good trading system, but the lack of a good money management strategy, the probability of leaving the market with a loss is also very high so only the use of scientific money management strategy to ensure survival in the foreign exchange market, but also have the opportunity to become the final winner 2. divide the proportion of capital The second way is to start trading before the capital is divided into several equal parts, each time only one of the funds to trade, and take this way into the trading situation can use the following formula to calculate the probability of loss leaving the market where TA is the trading advantage, that is, the long-term probability of profit minus the probability of loss, CU that is, the investment capital into several equal parts of the number of the same, for example, the above adopted For example, the trading system used above, substituting the above formula, we can get: TA = 0.20 (60% of profits minus 40% of losses) CU = 1 (that is, all the capital invested at once) It is clear that once again, if the full position in the foreign exchange market, long-term, the probability of leaving the market with a loss will be much greater than 50%, from the point of view of investment, this is not a good capital management strategy Now if we Now if we calculate the funds into 1 to 10 parts, each transaction only use one of them to invest, then the probability of leaving the market with a loss will be as shown in Figure 1 from Figure 1 can be seen, each more part, that is, to reduce the proportion of inputs, the probability of leaving the market with a loss will gradually decline from 67% to about 2% probability is worth noting that when the funds are divided into 4 equal parts, the probability of leaving the market with a loss from 67% This indicates that the position is slightly lighter, the probability of being defeated by the market decreases rapidly; while further dividing the funds into 5 to 10 parts, the probability of leaving the market with a loss slowly decreases from 20% to 2%, which indicates that the position is light to a certain extent, and then reduce the investment ratio to reduce the probability of being defeated by the market contributes slightly less to the foreign exchange market due to the use of margin trading, the existence of "If you operate with a full position every time, the probability of leaving the market with a loss is very high. However, the risk caused by the "leverage effect" can be fully or partially offset by the control of the position as long as you plan your account scientifically As long as you plan your account scientifically, operate with a light position (the proportion of capital to be divided varies from person to person), and combined with good operating skills, I believe that to survive in the foreign exchange market is not a difficult thing to remember, "keep the green hills in, not afraid of burning", in the foreign exchange battlefield to learn to cherish your "bullets "!

Liu Inverse domestic senior special foreign exchange analyst foreign exchange columnist
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