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Forex multi-account manager Z-X-N
Accepts global forex account operation, investment, and trading
Assists family office investment and autonomous management

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In two-way foreign exchange trading, traders must be aware that human weaknesses mean the concept of "profits and losses come from the same source" is not always true.

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This view is particularly common among Chinese stock investors, who often cite the concept of "profits and losses come from the same source." However, stock trading is a one-way process, so this statement is not entirely accurate. The discussion of "profits and losses come from the same source" is only more relevant in two-way investment products, such as futures or foreign exchange.
To illustrate this point, let's assume an investor suffers a significant loss in the market. If the loss is in an upward trend, the trader might buy the investment product all the way. However, if the loss is in an upward trend, the correct direction is for the market to fall, and the trader should sell the investment product all the way, theoretically resulting in a significant profit. However, the reality is not so simple.
In reality, only when traders can overcome human flaws and tolerate both floating losses and floating profits can they truly discuss the concept of "profits and losses coming from the same source." If a trader can tolerate floating losses but not floating profits, or vice versa, then they fail to truly understand and apply the concept of "profits and losses coming from the same source." In other words, even if a trader correctly predicts the market direction, they often close their positions prematurely due to a lack of perseverance, thus failing to realize significant profits.
Therefore, most traders who suffer losses due to poor mental attitudes are unqualified to discuss the topic of "profits and losses coming from the same source." They may suffer losses in positive investments and still experience losses in negative ones. This demonstrates that they fail to truly understand and apply the concept of "profits and losses coming from the same source." Only those traders who can overcome psychological barriers and remain calm and rational can truly achieve profitability in the forex market and understand the true meaning of "profits and losses coming from the same source."

In the field of knowledge dissemination and practical guidance for two-way trading in the foreign exchange market, the phrase "Plan your trade, trade your plan" is a frequently used expression, often considered a core principle of trading discipline.

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However, from a practical perspective, this expression is more of a formalistic rhetoric that is "undisputedly correct but lacks practical application." It merely emphasizes the importance of "consistency between planning and execution," but fails to clarify the core elements of plan formulation (such as risk parameter setting, market response plans, and dynamic position adjustment rules). Nor does it address how to deal with "unplanned market fluctuations" (such as sudden policy shocks and black swan events) during execution. Consequently, this expression often becomes a "safety check" used by instructors during lectures. While seemingly politically correct, it actually fails to provide traders with a practical framework for action and lacks substantive help in resolving issues such as decision-making difficulties and execution bias in actual trading.
In-depth analysis reveals that the limitations of this "correct nonsense" stem from its abstract nature, divorced from the trading context. In actual forex trading, the core challenge facing traders isn't whether to create a plan, but rather how to develop an effective plan that suits their capabilities and market characteristics, and how to stick to it when emotions fluctuate and market conditions unexpectedly change. For example, when an account experiences significant profit fluctuations, details like whether to adjust the take-profit point or retain some positions to maximize returns are far more crucial than the general slogan "follow the plan." When macroeconomic data is released and the market breaks through the planned stop-loss level, whether to "strictly stop-loss and exit" or "judging it as a false breakout and holding back" also require pre-defined response rules. Phrases like "plan your trades, trade your plan" completely avoid these practical details, remaining merely conceptual and ultimately meaningless.
Compared to formalized plans and slogans, the core logic that truly provides guidance in forex trading is the progressive process of "from nothing to something, from more to less, from complex to simple," a process of "from great to simple." This process is not a simple "subtraction", but a deep reconstruction of the trading cognition and operation system after traders have experienced a complete market cycle and accumulated a lot of practical experience. Its essence is "screening core elements through complex practice, and finally precipitating a minimalist strategy that is efficient and adaptable to themselves."
From an evolutionary perspective, the development of "Simplicity" requires three key stages. The first stage is the "from scratch" cognitive construction period. When novice traders first enter the market, they have no knowledge of trading knowledge, technical indicators, or strategy logic. They need to gradually accumulate basic theories (such as exchange rate formation mechanisms and the factors affecting interest rate differentials), master analytical tools, and experiment with various strategies (such as day trading, swing trading, and trend following). The core goal of this stage is to "establish a cognitive framework for trading." Therefore, they actively absorb a large amount of information, forming a "diverse and extensive" knowledge base. The second stage is the "from extensive to concise" screening and optimization period. As practical experience increases, traders will discover that different knowledge and strategies vary in effectiveness in different market environments: some indicators are highly accurate in volatile markets but ineffective in trending markets; some strategies are profitable in highly volatile currency pairs but suffer frequent losses in less volatile ones. Based on this practical feedback, traders will begin to identify core elements that best suit their trading style (e.g., risk appetite, time and energy) and market characteristics (e.g., currency pair volatility patterns, frequency of policy interventions), gradually eliminating inefficient and conflicting elements, and transforming their cognitive and strategic systems from a "complex and chaotic" to a "focused" approach. The third stage is the "from complex to simple" phase of streamlining and settling in. After experiencing a complete bull-bear cycle and numerous cycles of profit and loss, traders develop a deep understanding of market dynamics and their own abilities, ultimately discovering that truly stable and effective trading logic often relies on a minimalist framework of "core trend analysis + strict risk control." For example, a simple strategy of "macro interest rate differential trend analysis + key support and resistance levels to determine entry points + fixed position ratios to control risk" can achieve long-term, stable profits. The numerous complex indicators and advanced theories previously learned ultimately serve only as auxiliary verification tools, or are even discarded entirely.
It is important to emphasize that the core premise of "the great way to simplicity" is "experience sufficient complexity." Only after traders have fully experienced the trials and errors of various strategies, the impact of diverse market environments, and the challenges of various human weaknesses can they accurately identify the core elements and redundant noise within their trading systems. For example, a trader who hasn't experienced frequent losses due to overreliance on complex indicators will struggle to understand the importance of a simplified indicator system; and a trader who hasn't experienced decision-making hesitation due to excessive strategy parameters will fail to appreciate the efficiency of a minimalist strategy. This process of "first experiencing complexity, then pursuing simplicity" is essentially a process of "separating the dross from the dross" by traders from market principles and their own abilities. The resulting simplicity is not a superficial understanding of simplicity, but rather precision and efficiency proven through complex experience. This is the true meaning of "the ultimate simplicity" in forex trading.
In summary, in forex trading, traders should be wary of misleading formalities such as "plan your trades, trade your plan" and focus their efforts on building a practical, actionable plan and cultivating a minimalist strategy through complex practice. Only by breaking free from the constraints of abstract concepts, engaging in in-depth market practice, and continuously optimizing our understanding can we truly understand the logic of "the greatest simplicity," develop a stable and efficient trading system, avoid wasting time on meaningless slogans, and effectively improve our trading skills and profit stability.

In two-way foreign exchange trading, traders' personalities are often difficult to change, and human weaknesses and flaws are even more deeply ingrained.

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These traits often lead to unnecessary risks and mistakes during trading. Therefore, adopting a light-weight, long-term strategy is an effective method to mitigate the negative impact of human weaknesses and flaws on trading.
Long-term carry investment strategies in foreign exchange not only address the issue of trading direction but also overcome the difficulty traders face in holding positions for the long term. They also avoid the urge to engage in frequent short-term trading. This strategy leverages interest rate differentials between currency pairs to generate stable returns by holding a position for the long term, thus reducing reliance on short-term market fluctuations.
Forex, as a low-risk, low-return, and highly volatile trading instrument, has a very low success rate for short-term trading. Since the forex market rarely exhibits a clear long-term trend and prices consistently fluctuate within a relatively narrow range, it is difficult for traders to achieve significant profits through short-term trading. Instead, this market characteristic favors a long-term, light-weight strategy.
Specifically, traders should exercise patience and gradually establish, increase, and accumulate positions in the direction of the trend. The core of this strategy is to reduce the risk of individual trades by operating with a light position, while capturing the overall market trend through long-term holding. By repeatedly repeating this simple yet effective strategy, traders can steadily accumulate profits amidst market fluctuations.
Furthermore, traders may achieve even better trading results by combining it with a carry investment strategy. Carry investment not only provides an additional source of income but also hedges market risk to a certain extent, further enhancing the robustness of the trading strategy. Therefore, for forex traders, combining a long-term, light-weight position with carry investing is not only an effective strategy for addressing market idiosyncrasies, but also a wise choice for overcoming human weaknesses and achieving steady profits.

In the professional understanding of two-way trading in the forex market, traders must possess the ability to "see the essence beyond the narrative"—the various descriptions of trading strategies and operational methods in the market, while seemingly diverging significantly, may actually point to the same trading logic.

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This phenomenon of "same essence, different descriptions" stems from differences in traders' perspectives on market dynamics, language habits, and experience backgrounds. However, the core operational logic and risk control principles remain highly consistent. Accurately identifying this "logical commonality underlying these differences in description" is a key prerequisite for traders to avoid cognitive confusion and build a systematic trading system.
From the perspective of the underlying logic of trading methods and investment strategies, the "buy more on a dip" and "add to positions on unrealized profits" approaches are essentially different interpretations of the classic "add to positions on pullbacks" and "add to positions on breakouts" strategies. Both serve the core goal of "optimizing position costs and maximizing profit potential." "Buy more on a dip" is typically used during volatile markets or trend pullbacks. When a currency pair's price retraces to key support levels (such as previous lows or moving average support), traders gradually increase their positions to reduce their overall holding costs. This is a typical application of "add to positions on pullbacks." The core logic behind this strategy is to "capture relatively low-priced stocks through price pullbacks." However, this strategy must be based on a clear understanding of the trend direction to avoid being trapped further into a losing position during a trend reversal. "Adding to positions on unrealized profits" is more commonly used during a trend continuation phase. When a currency pair's price breaks through a key resistance level (such as a previous high or the neckline of a pattern) and the account generates unrealized profits, traders gradually increase their positions. This is the core operation of "adding to positions on breakouts." The core logic is to "increase positions when trend continuation is confirmed to maximize trend-based gains," while also using "unrealized profits as a safety cushion" to mitigate the risk of adding to positions. Although the two strategies are expressed differently, both adhere to the principle of "following the trend," differing only in the timing of adding positions (drawdowns vs. breakouts). Essentially, both achieve a balance between risk and reward through dynamic position adjustments.
In positioning during an uptrend, the strategies of "adding smaller positions when chasing gains" and "adding larger positions when catching market bottoms" essentially correspond to the "positive pyramiding" strategy. The core principle is to control the risk of chasing gains through "decreasing positions." In an uptrend, "chasing the rise" typically refers to entering the market after the price breaks through the previous high. While the trend is confirmed at this point, the risk of a subsequent pullback increases as the price rises. Therefore, a "smaller-than-smaller" approach is employed: the initial position is the largest, and subsequent positions are gradually reduced, forming a positive pyramid structure with "heavy positions at the bottom and light positions at the top." The advantages of this strategy are: if the price continues to rise, the heavy position at the bottom can fully capture the trend's gains; if the price experiences a pullback, the light position at the top can effectively minimize overall account drawdown. Meanwhile, "bottom fishing" involves increasing positions at key support levels during the pullback phase of an uptrend. During this period, prices are relatively low, and the probability of continued growth after the pullback is high. Therefore, a "larger-than-smaller" approach is employed: a small initial position is used to test the waters at support levels. If the price stabilizes and rebounds, the position is gradually increased, similarly forming a positive pyramid structure. While these two strategies may seem opposite (chasing the rise vs. bottom fishing), the underlying logic of their position layout is identical: both employ a "heavy position early on, light position later" structure to ensure trend gains while mitigating pullback risk.
In a downtrend, the strategies of "buying smaller positions when chasing a dip" and "buying larger positions when catching a top" essentially correspond to the "inverted pyramid" strategy. The key is to adapt to the risk characteristics of a downtrend through incremental increases in positions. In a downtrend, "buying smaller positions" typically refers to entering the market after the price breaks below the previous low (shorting in a two-way trade). While the trend continues at this point, the risk of a rebound increases with the price. Therefore, a "smaller position" strategy is employed: the initial short position is the largest, and subsequent increases (covering shorts) gradually reduce the position size, forming an inverted pyramid structure with "heavy positions at the top and light positions at the bottom." The advantages of this strategy are: if the price continues to fall, the heavy position at the top maximizes the short position's profits; if the price rebounds, the light position at the bottom mitigates any losses. The "stage top copy" is to enter the market to short and increase positions at the key resistance level during the rebound stage of the downward trend. At this time, the price is at a relatively high level, and the probability of continuing to fall after the rebound is high. Therefore, the "more and more" method is adopted - first try shorting with a light position at the resistance level, and if the price is confirmed to fall under pressure, gradually increase the increase position strength also forms an inverted pyramid. Similar to the upward trend's positive pyramid structure, while these two strategies differ in entry timing (chasing the dip vs. picking the top), the logic of position placement is highly consistent: both employ an inverted pyramid structure of "heavy positions in the early stages, light positions in the later stages" to capture the benefits of a downtrend while controlling rebound risk.
In summary, the seemingly diverse descriptions and operational methods of forex trading actually all revolve around the core principles of "following the trend" and "controllable risk." Traders need to transcend the limitations of "differences in description" and deeply analyze the underlying logic of different methods, identifying their common principles and applicable scenarios. Only then can they integrate various trading experiences into a systematic operational system, avoid operational confusion caused by cognitive fragmentation, and ultimately improve the accuracy and stability of trading decisions.

In two-way forex trading, traders typically progress through a gradual learning process, from simulated trading practice to small-capital real-world trading, and finally to large-capital operations.

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This process not only helps traders gradually accumulate experience but also effectively reduces risk, ensuring they steadily improve their trading skills at each stage.
Demo trading is an important starting point for traders learning about forex trading. While demo trading cannot fully simulate the psychological pressures of real trading, it provides a risk-free environment for traders to validate their trading strategies in the market. Through demo trading, traders can familiarize themselves with market fluctuations, master the use of trading tools, and gradually improve their trading skills. This stage is a critical period for traders to accumulate theoretical knowledge and initial practical experience.
Once traders have accumulated a certain amount of experience in demo trading and verified the feasibility of their trading strategies, they can move on to the small-capital real-world trading stage. The purpose of this stage is to allow traders to further test and optimize their trading strategies in a real market environment, while also developing the mental fortitude to navigate market fluctuations. Practicing with a small capital can help traders better understand market uncertainty and risk, leading to greater caution and rationality in actual trading.
Only after proving their trading skills and strategy stability with a small capital should they consider moving on to large capital operations. This stage requires a high degree of self-discipline and maturity, as operating with a large capital involves higher risks and greater responsibility. If a trader starts trading with a large capital, a significant loss will not only result in capital loss but can also severely damage their confidence and mental state. Therefore, a gradual progression from simulation trading to practical trading with a small capital, and finally to large capital operations, is a crucial strategy to ensure steady growth in the forex market.

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13711580480@139.com

+86 137 1158 0480

+86 137 1158 0480

+86 137 1158 0480

z.x.n@139.com

Mr. Z-X-N

China · Guangzhou

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