The foreign exchange market, like other investment markets, also has risks. While foreign exchange margin trading brings high profit opportunities to investors, it also brings risks. But no one will stop eating due to choking, and investors will not give up the opportunity to obtain high profits because of possible risks. We provide investors with the following advice to help you minimize risks while maximizing profits.

Control the opening ratio of each transaction:
For traders who have just entered the market, the opening ratio should not be too large. Only when they have accumulated sufficient trading experience and have a continuous good transaction history can they consider gradually expanding the opening ratio. For novices who are new to the foreign exchange market, we believe it is safer to open a position of no more than 5%. Traders with relatively good experience can generally open a position with 10%.

Set a stop price for each trade:
Please strictly implement it. When the exchange rate moves in the favorable direction of your operation, you can continuously track and reduce the stop loss (for example, when you are long, you can increase the stop loss price when the exchange rate rises; when you are short, you can lower the stop loss price when the exchange rate falls). But conversely, when the exchange rate moves in a direction that is not conducive to opening a position, you cannot expand the stop loss, otherwise it will violate the original intention of setting the stop loss to control risks. Generally speaking, the risk controlled by a smaller stop loss is relatively small. A relatively small stop loss can be set for short-term operations, and a relatively large stop loss can be set for medium and long-term operations. In addition, the stop loss point should not be set further than the forced liquidation point, otherwise the position will be forced to be liquidated before the stop loss price is reached, and the stop loss price will not work.

Setting a take-profit can also reduce risk:
Because the floating profit generated by the open position does not count as real profit, only when the profit is taken can real profit be made. Generally speaking, for short-term operations, the take-profit can be relatively small, and for long-term operations, the take-profit can be relatively large. In addition, the stop-profit space should be twice or even higher than the stop-loss space for each operation. It is only worth doing when the potential profit-risk ratio is relatively high.

Don’t hold positions for too long:
Because the longer the position is held, the more uncertain events may occur during the period, and the greater the risk to the opening position, so the potential risk of short-term trading is smaller than that of long-term trading.

Avoid holding positions past the announcement of major data or events, and short-term traders should not hold positions past the weekend.

Strive to improve the stability of your trading:
Please strictly implement it. When the exchange rate moves in the favorable direction of your operation, you can continuously track and reduce the stop loss (for example, when you are long, you can increase the stop loss price when the exchange rate rises; when you are short, you can lower the stop loss price when the exchange rate falls). But conversely, when the exchange rate moves in a direction that is not conducive to opening a position, you cannot expand the stop loss, otherwise it will violate the original intention of setting the stop loss to control risks. Generally speaking, the risk controlled by a smaller stop loss is relatively small. A relatively small stop loss can be set for short-term operations, and a relatively large stop loss can be set for medium and long-term operations. In addition, the stop loss point should not be set further than the forced liquidation point, otherwise the position will be forced to be liquidated before the stop loss price is reached, and the stop loss price will not work.