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2024/06
Can't stop opening positions? Try these methods for trading success!
Trading in the financial markets is a constant test of human nature. The market’s high volatility and continuous 24-hour activity stimulate your visual senses, especially during the release of significant data (such as non-farm payrolls, Federal Reserve rate decisions, trade balance reports, CPI, etc.).
In the market, every trader hopes that the price will move in the direction of their open positions. They spend a lot of time finding ways to increase the probability of this happening. Even if there’s a significant pullback and the trend reverses, they still hold a glimmer of hope in their choice.
How to Open Positions Rationally?
Fundamental and technical analysis is essential for opening positions. Usually, after determining the opening price, the position opening method also requires many techniques, including price, data, and trading products. The exact method for opening a position at each point varies depending on specific news and timing.
So, what is the most rational way to open positions? Strategies follow patterns, and keeping in step with your own pace is crucial. Here are a few techniques for opening positions that you might find helpful:
1.Light Positions with Multiple Orders (Proportional Allocation of Lots)
Opening a single position of 1 lot versus opening 0.1 lots ten times produces different results. Adopting a strategy of light positions with multiple orders helps control the market trend and makes it easier to close orders later.
2.Proportional or Equal Amount Trend-following Positions
This method controls your positions, especially when following the trend. Start with larger positions and gradually reduce them, ensuring that subsequent positions aren’t opened at high levels.
3.Inverse Trend Multiplying Positions
Start with smaller positions and gradually increase them. When the market reverses, you can achieve the desired investment return rate at relatively low points.
4.Two-way Positions (Partial and Full Hedging)
Two-way positions are an excellent trading strategy, especially during volatile market conditions. It’s particularly advantageous when exchange rates fluctuate sharply.
By trying these methods, you can better control your trading impulses and make more rational decisions in the financial markets.
