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Capital Management in Forex Market

TIME:2018-09-21   click:
After years of ups and downs in the foreign exchange market, the author gradually realized that the role of fund management in actual transactions is very huge. The same market, the use of different methods of fund management, the final results are also different. The market is right, but the improper management of funds may also make a small profit; the same market, although misjudged, but as long as properly dealt with, can also be out of danger.
Stanley Druckenmiller, George Soros's most successful successor, officially joined Quantum Fund in September 1988. In the second half of 1989, Druckenmiller believed that the Deutsche Mark would continue to appreciate after the fall of the Berlin Wall. At first, Druckenmiller was only preparing to buy $1 billion of Deutsche Mark. Soros asked him: How many positions did you build? Druckenmiller said one billion. Soros, you call this a warehouse? This rhetorical question has become a classic Wall Street question. Druckenmiller doubled his position with the encouragement of Soros. Within a few days, he bought a $2 billion Deutsche Mark in the money market. In the next year, Mark appreciated 25% against the dollar, and the Quantum Fund earned 31.5% and 29.6% in 1989 and 1990, respectively.
According to computer backtracking statistics, our average holding time is six weeks and four days, of which the average holding time of profit position is ten weeks and three days, and the average holding time of loss position is only two weeks. This means that profitable positions should be held for longer as long as they are buoyant enough. On the contrary, it is necessary to cut the loss as soon as possible.
After years of ups and downs in the foreign exchange market, the author gradually realized that the role of fund management in actual transactions is very huge. The same market, the use of different methods of fund management, the final results are also different. The market is right, but the improper management of funds may also make a small profit; the same market, although misjudged, but as long as properly dealt with, can also be out of danger.
Stanley Druckenmiller, George Soros's most successful successor, officially joined Quantum Fund in September 1988. In the second half of 1989, Druckenmiller believed that the Deutsche Mark would continue to appreciate after the fall of the Berlin Wall. At first, Druckenmiller was only preparing to buy $1 billion of Deutsche Mark. Soros asked him: How many positions did you build? Druckenmiller said one billion. Soros, you call this a warehouse? This rhetorical question has become a classic Wall Street question. Druckenmiller doubled his position with the encouragement of Soros. Within a few days, he bought a $2 billion Deutsche Mark in the money market. In the next year, Mark appreciated 25% against the dollar, and the Quantum Fund earned 31.5% and 29.6% in 1989 and 1990, respectively.
According to computer backtracking statistics, our average holding time is six weeks and four days, of which the average holding time of profit position is ten weeks and three days, and the average holding time of loss position is only two weeks. This means that profitable positions should be held for longer as long as they are buoyant enough. On the contrary, it is necessary to cut the loss as soon as possible.

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