Forex Margin transaction, the transaction is generally 1:100,1:200 amplification, thus a small broad. Last year, the Forex market volatility, and create a lot of opportunity to make money, everywhere is also the opportunity to burst positions. I have a friend that just opened Forex accounts, as usual burst positions as a meal. According to the lessons I have repeatedly burst position, summed up the following three positions of the direct cause of the explosion.

1, the direction reversed.

2, the absence of a stop.

3, positions heavier.

These three points are often integrated together to play a role. Range in a direction counter, and even position light, it is difficult to difficult to control their trading emotions. Fluctuation range of people who used to do, the more will be more anti-Opening, so come back often and then large profits. But once the interval break, warehouse explosion inevitable.

Make Forex transactions, no one can hundred percent right direction, especially to do small and medium-band, 500 points to 200 points between. So set the stop position to prevent the explosion protection.

In another case, set a stop loss will be heavy, heavy is the position. Say you have $ 1000. 1 hand to do the transaction, fluctuations in point is $ 10, set up a 50 point stop, hit stop on the loss of $ 500, loss of general. Earn big pay such a big deal is inevitable road to burst positions.

I summed up the position of an appropriate ratio, for your reference. $ 500 funds in the account, the minimum trading unit of 0.01, leverage (Leverage) 1:200.

21 According to Gann trading discipline, the total principal amount of each transaction can not be a loss of 10% standards, the following settings.

$ 1,500 hand-made 0.1 transactions, $ 50 to do so on the ratio of 0.01 hand.

2, an important opportunity to stop the transaction is nowadays one of the 50 points.

Why it is 50 points? 0.1 $ 500 to do this hand, 50-point stop loss $ 50. This loss of funds does not exceed the total principal amount of 10%! This is a 50-point experience, if you want to set the 100-point stop-loss positions have reduced by half, $ 500 0.05 hand can only do so if you stop them, the amount of loss is $ 50. This is in line with the total principal amount of each loss can not exceed 10% from. Understand this principle, you can position the flexible correction.

3, in the event of trading losses, trading positions to be cut later. To Article 2, for example, if the continuous loss of the original 500 to 450 once, then the number of heavily loaded hand will become 0.09, so the original 50 point stop loss of 50 dollars, 45 dollars is now turned into losses, or no more than every time loss does not exceed 10% of the total principal amount of the principle.

4 Similarly, if the profit, the capital increase, the position can be expanded, for example, is now earning $ 300, and 800 dollars, then the maximum position is 800/50 = 16, is 0.16 16 0.01 hand hand, because based on U.S. $ 0.01 under 50 the proportion of single, $ 800 is $ 50 so 16 obtained this result.

5, if you think that more than 10% of each loss, each loss to the total principal amount not to exceed 5%, then stop points in the same circumstances, we should correct position, the position correction to the $ 100 hand made 0.01 ratio.

Mentioned above is from the perspective of how to protect the overall layout of the principal positions. That the 50 point stop loss is certain what is not. Stop setting typically has three methods:

1, the overall financial security law. Is the method mentioned above.

2, the technical bit stop-loss method.

In the technical bit stop-loss method, they encountered a new problem, but together with the above method of calculating the same. Such 1.4500 breakthrough long on sterling GBP, after the break to 1.4430 next break Powei, on behalf of the false break, and do more is the breakthrough point above 20 points (to avoid false break), is 1.4520 points, so 1.1520-1.4430 = 90 points ratio, coupled with two-way eight-point difference is 98 point. In order to control this loss does not exceed 10% of the total principal, you can not do $ 500 0.1 hand, but the $ 500 hand-made 0.05. How to calculate in the above example, a 5-point.

3, the first combined application of both approaches. Principle here that the above two methods is not the same stop-loss points, technical points if greater than 50 points according to the permanent stop-loss points and fix technical positions, such as the example 2 is the case. When the technical points less than the 50 point stop loss permanent standards, according to the technical point set. For example do more Powei only 25 points away from the technology. So, if you want to leverage (Leverage) advantages can make $ 500 0.2 hand transaction, because stop loss 25 points out of a total loss of 50 dollars, the same did not exceed the total principal amount of each loss does not exceed 10% of principle.

The above example conditions that are calculated by the maximum position. The choice of a loss ratio of the total principal amount not exceeding 10% or 5% or the other, according to their risk Risk aversion situation. But the maximum should not exceed 10%. And this position in front of said ratio is the discovery of key market opportunities, generally 200 to 500 points when the opportunity arises. If you like to do more short-term small fluctuations will have to transfer a small position, I suggest that the proportion is above the third position, because only a small range, so stop setting the appropriate correction should be smaller.

Important opportunity to say that the above general how much time it happened once, in my personal experience is that 200-point band the opportunity to 2,3 times a day also, so every day such transactions do not exceed 3 pen, if you catch up with the bad luck, continuous 3 pen Kuidiao the principal loss is 30% of ah. The 500-point band the opportunity a week to have a pretty good 2,3 times. Therefore, to reduce transaction. In particular, the largest proportion of the trading position trading (trading by the largest proportion of the above positions are calculated).

Finally, a suggestion is to make money according to certain proportion of Wang Chu to take. Because eating the same as the normal burst positions, the uncertainty of the market too much. Your money is their own ah.