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How to set stop loss and take profit in foreign exchange trading?
1. Definition of stop loss: Stop loss, also known as "cutting meat", means that when the loss of an investment reaches a predetermined amount, it will be cut off in time to avoid further losses. Its purpose is to limit the loss to a smaller range when the investment goes wrong. An important difference between stock investment and gambling is that the former can limit the loss within a certain range through stop loss and maximize the return on success. In other words, a stop loss makes it possible to get a bigger profit at a smaller cost.

2. Definition of take profit: take profit, also known as take profit/take profit. -is to ship at your target price, and stop loss is to ship at a price at which you can bear risks and losses. The concept of take profit should be closed when it is good and should not be maximized. The center of thought is a "stop", and thought determines action. The key to profit is to find good opportunities. When an opportunity arises, seize it at the first time. If you miss it, let it miss it (the key to whether you can renew it). Find another opportunity. Seize the opportunity. When the opportunity has the signal of transformation, let it go the first time.

3. Set the stop loss and take profit methods:

(1) fixed stop loss method This is the simplest stop loss method, which refers to setting the loss amount to a fixed ratio, and closing the position in time once the loss is greater than this ratio. Generally applicable to two types of investors: first, investors who have just entered the market; Second, investors in risky markets (such as futures markets). The mandatory effect of fixed stop loss is obvious, and investors do not need to rely too much on market judgment. The setting of stop loss ratio is the key to fixed stop loss. The fixed stop loss ratio consists of two data: one is the maximum loss that investors can bear. This ratio changes with investors' mentality and economic affordability. At the same time, it is also related to investors' profit expectations. The second is the random fluctuation of trading varieties. Deduction, seven, eight, two, six, five, eight, one, three and four refers to the disorderly price fluctuation caused by the behavior of market trading groups without external factors.

(2) The technical stop loss method is complicated. It combines stop-loss setting with technical analysis, and sets stop-loss orders at key technical positions after eliminating random market fluctuations, thus avoiding further expansion of losses. This method requires investors to have strong technical analysis ability and self-control. The technical stop-loss method requires more investors than the previous one, and it is difficult to find a fixed model. Generally speaking, using technical stop loss method is nothing more than gambling with small losses to make big profits. For example, after buying in the lower track of the rising channel, wait for the end of the rising trend before closing the position, and the stop loss position is set near the relatively reliable moving average. Once the deviation rate of the price from the medium-term moving average is enlarged again, it means that the market is over. At this point, if the price turns downward, investors should leave decisively. The market is relative to the unilateral market. At the beginning of the market, the market is unstable and fluctuates greatly, so traders can boldly intervene. In the later stage of the market, it is necessary to appropriately narrow the stop loss range and improve the insurance coefficient.

(3) The unconditional stop loss method is not cost, and the stop loss by running is called unconditional stop loss. When the fundamentals of the market have undergone a fundamental turning point, investors should abandon any illusions and fight at no cost in order to preserve their strength and choose the right opportunity to fight again. Fundamental changes are often difficult to reverse. When the fundamentals deteriorate, investors should make decisive decisions and cut their positions out.