Position concept:

When opening a futures transaction, the position held after buying a futures contract is called a long position, referred to as a long position; the position held after selling a futures contract It is called a short position, or short position for short. The difference between open long contracts and open short contracts is called the net position. Futures trading only has this approach, but spot trading does not.

In foreign currency trading, "building a position" means opening a position. Opening a position, also known as exposure, is the act of buying one currency and simultaneously selling another. After the market opens, one currency is long (long) and the other currency is short (short). Choosing the appropriate exchange rate level and the time to open a position are the prerequisites for profitability. If you seize the market timing well, you will have a greater chance of profit; on the contrary, if you enter the market at the wrong time, you will easily incur losses. Net position is the difference in trading between one currency and another acquired after opening.

The important role of position adjustment in profit and loss

For example, if you make the same amount of money in profit and loss, your winning rate is 50%, and you may lose at most in a row. 3 times, or maybe 3 times in a row. You have a 5% chance of double the profit and a 1% chance of triple the profit. So, do you think you can make money by doing 100 million transactions?

One very important parameter is missing, which is directly related to your success or failure. What is this parameter?

To put it simply: how much does each transaction cost? The term "position sizing" may also be referred to as risk management or money management.

Suppose you have to make a profit or loss of 50% every time. If you make twice as much money, you make twice as much. This is your goal.

Imagine losing money three times in a row. How much do you have left?

50% leave once, 25% leave twice, and 12.5% ??leave three times.

Then you make money three times in a row. See how much money you have.

The first time 12.5%*1.5=18.7%, the second time 28.1%, the third time 42.1%

Losing 3 times in a row, winning 3 times in a row.

It seems that there should be no loss or profit. But it has already lost 58%!

What if it is 8%?

After three consecutive losses and three consecutive profits, 98% of the principal is still left, and the loss is only 2%, without losing vitality.

(This information is for reference only and does not constitute investment advice. Please evaluate carefully when investing.

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