• How to Trade with Your Net Worth Curve

    read:2023/2/25 14:08:27

     The foforex trading accountsex market forextradingaccountstype in only two modes: trending or range tradingIn a trending market, price fluctuations move in one direction over an extended period of time, while in a range trading market, prices move up and down in an uncertain direction The same principles apply to your forextradingaccountsregister cashback forex curve, and if analyzed correctly, your own net worth curve can provide clues as to when you should If you trade a trend, you may lose more often than you gain, but the profits are large enough to usually make up for the losses.What often happens is that you get lucky and make all the profits and then the trend suddenly stops and your net worth drops When this happens, its usually the best time to scale back your trades However, it is impossible to know when the market stops trending, just as it is impossible to know when the market stops ranging Analyze your equity curve The most important thing to do is to analyze your equity curve based on past data to see if there are any patterns in general, and when your equity curve starts to grow exponentially, this is a good time to start downsizing your position good time if you do it very slowly, you may be able to judge the next adjustment measures, which will help reduce the amount of your losses Similarly, if you are in the process of losing money, it is a good idea to start with a small position and keep adding to it, because profitable trades begin to appear profits usually follow, which is exactly why this strategy can be effective The net worth has dropped significantly to start trading Timing If you have an upward climbing net worth curve and a strong trading approach, you will see that, in retrospect, the times when your net worth dropped significantly were actually the best times to start trading the way you did At these times, your strategy is most likely to be successful Therefore, when your net worth curve drops significantly, it is a good time to open a position and take a little risk; for example, if your Net worth is down 20%-30% from its peak You can also plot moving averages on your net worth curve You can only trade when your net worths fast moving average is above the slow moving average (when the fast moving average is below the slow moving average, you can use demo trading to study the average) This approach can help you trade only when it is most profitable, but it is important to test first It is important to test first, because if a system is not optimized, even trading with the NAV curve will not help