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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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From the perspective of behavioral finance and portfolio theory in the foreign exchange market, most foreign exchange traders end up losing money during the trading cycle, while most foreign exchange investors can achieve profit goals in the long-term investment process. This phenomenon can be attributed to the differences between the two in terms of trading strategies, risk management, and investment concepts.

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Foreign exchange trading behavior usually focuses on short-term operations in terms of time, and its core focus is on short-term price fluctuations. This trading model closely revolves around short-term indicators in technical analysis, such as intraday candlestick chart patterns and short-term moving average crossovers, trying to capture short-term price changes in the market to gain returns. In contrast, foreign exchange investment tends to be a long-term strategic layout, based on macroeconomic cycle theory, balance of payments analysis, and interest rate parity theory, pursuing steady asset appreciation in the long term, and paying more attention to portfolio diversification and risk dispersion.
Most retail investors participating in foreign exchange trading show a clear preference for short-term trading operations. From the perspective of behavioral economics, this is mainly due to the relatively limited scale of their funds. Under the influence of prospect theory, they pay too much attention to the possibility of returns and expect to achieve high returns in the short term through frequent short-term transactions to meet the psychological demand for rapid growth of wealth. However, although short-term trading operations involve certain chart pattern recognition and indicator application at the technical analysis level, due to the complexity of the market microstructure, short-term price changes are largely affected by random factors such as market noise and investor sentiment, and are highly unpredictable, which makes the trading results more accidental.
In sharp contrast, large foreign exchange investors with strong funds tend to adopt long-term investment strategies. Based on modern portfolio theory, they can build a more diversified investment portfolio with sufficient capital reserves to effectively diversify non-systematic risks. In the process of pursuing long-term and stable investment returns, long-term investment operations require investors to use professional technical analysis methods, combined with macroeconomic environment analysis, fundamental analysis and quantitative analysis models, to comprehensively judge market trends, so as to make rational investment decisions, rather than relying on random market fluctuations.
Due to the relative shortage of funds, most retail foreign exchange traders tend to use high leverage for trading. According to the principle of financial leverage, high leverage amplifies the potential returns while also amplifying the risk exposure in the same proportion. When market volatility intensifies, this high risk exposure often makes them the main group that suffers serious losses. After the loss occurs, according to the theory of investor behavior, these retail investors usually choose to exit the market, while new retail investors continue to enter the market attracted by the potential returns of the market, thus forming a cyclical cycle.
Large foreign exchange investors usually do not use leverage for trading with their strong financial strength. From the perspective of risk measurement and management, leverage-free trading makes it almost impossible for them to suffer losses due to the leverage amplification effect when facing market fluctuations. This is also one of the important reasons why foreign exchange brokers and foreign exchange banks have a certain resistance to large investors. In terms of profit model, foreign exchange brokers and foreign exchange banks mainly obtain profits through spreads, handling fees and customer stop-loss transactions, while large investors usually do not set stop-loss due to the robustness of their trading strategies. Even if foreign exchange brokers or foreign exchange banks adopt slippage strategies, it is difficult to have a substantial impact on their transactions. Due to sufficient funds, large investors have almost no risk of liquidation under the measurement of risk value model. Faced with this situation, foreign exchange brokers and foreign exchange banks, from the perspective of their own profits and risk control, have taken the main countermeasure of restricting large investors from opening accounts. In response to this restriction, large investors have two main countermeasures based on game theory: one is to open a small account first, and then gradually inject large amounts of funds to try to circumvent the account restriction, but even so, they may eventually be identified and rejected by foreign exchange brokers or foreign exchange banks due to the characteristics of their trading behavior; the other is to open multiple small accounts and use the principle of information asymmetry to avoid attracting the attention of foreign exchange brokers or foreign exchange banks.

In the financial investment theory and practice system, the core element of high-frequency investment transactions to achieve profitability is not simply relying on short-term high-frequency trading operations, but highly relying on strong financial strength as a solid support.

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From the perspective of modern portfolio theory and market microstructure theory, in the high-frequency stock investment trading scenario, its profit source is not mainly attributed to frequent buying and selling transactions in the short term. This is because frequent trading not only increases transaction costs, such as explicit costs such as commissions and stamp duties, but may also cause losses to earnings due to implicit costs such as impact costs. In fact, the profitability of high-frequency stock investment transactions is more due to the market influence and risk tolerance given by strong financial backing. When short-term operations are judged to have a large profit margin based on tools such as technical analysis and quantitative models, investors usually choose to close their positions in time to lock in realized profits based on the principle of risk-return optimization. This behavior is in line with the stop-loss and stop-profit strategies in investment risk management, which aims to control the risk exposure of the investment portfolio. However, if the profit of short-term operations is limited, or even a floating loss calculated based on the mark-to-market value occurs, investors often convert their positions into long-term holdings based on fundamental analysis and long-term value investment theory. This is because with the help of artificial intelligence algorithms, stocks selected based on big data analysis and machine learning technology usually have relatively good fundamentals and have great development potential and value-added space in terms of industry competition pattern, financial health, and profit growth expectations.
In the field of foreign exchange investment and trading, high-frequency investment and trading models are relatively rare. From the perspective of international financial theory and monetary economics, the price trends of foreign exchange currency pairs mostly show the characteristics of narrow fluctuations. This is mainly due to the fact that mainstream governments and central banks of various countries use monetary policy tools, foreign exchange market intervention and other means to control currency prices within a relatively stable range based on the policy goals of maintaining the stability of their own currencies, promoting international trade and stable macroeconomic growth. In the foreign exchange high-frequency investment trading model, if investors choose to close their positions when short-term operations are profitable, or choose to continue holding when short-term operations are not profitable or even when floating losses occur, the risk of overnight interest rate spread accumulation in foreign exchange transactions will become apparent. Overnight interest rate spread refers to the interest income or expenditure generated by the interest rate difference between different currencies when positions are held overnight. If long-term positions are to be established, from the perspective of interest rate parity theory and foreign exchange risk management, positions must ensure overnight positive interest rate spreads to ensure that the holding cost is negative or at least controllable. However, the interest rates of mainstream foreign exchange currency pairs are usually very close. This is because the interest rate levels of major economies in the world are converging under the influence of factors such as monetary policy coordination and economic cycle synchronization. In this case, whether holding a long position or a short position, you may face a heavy problem of negative interest accumulation. Long-term negative interest accumulation may not only erode investment profits, but may even lead to investment returns that cannot cover costs. From the perspective of return on investment and net present value, the gains will eventually outweigh the losses.
In actual operations, high-frequency foreign exchange trading faces many difficulties and is difficult to implement effectively due to the constraints of multiple factors such as currency price stability, interest rate parity, and transaction costs.

The main profit model of foreign exchange brokers comes from the loss of funds caused by customers during the transaction due to stop-loss operations, and the zeroing of equity caused by customers' liquidation.

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In long-term practice, successful foreign exchange investment practitioners have always conveyed key trading concepts to investors: First, prudently use leverage tools. The unreasonable use of leverage is often the main factor causing the risk of liquidation. Reasonable control of leverage multiples can effectively reduce such risks; second, reasonably plan stop-loss strategies to avoid over-reliance on stop-loss mechanisms. In trading, if you do not participate in short-term high-frequency trading, reasonably control leverage risks, and strictly follow the principle of trend trading, you can significantly reduce the possibility of triggering stop losses due to market fluctuations.
However, these concepts spread by successful foreign exchange investment practitioners are obviously different from the business logic held by global foreign exchange brokers. In the operation model of foreign exchange brokers, due to the lack of a deep understanding of market rules and proficiency in trading skills, the mistakes made by novice foreign exchange investors in the trading process, such as frequent stop losses and liquidation, have become an important source of profit for brokers. Therefore, the knowledge popularization and concept guidance of successful foreign exchange investment practitioners to novice investors are, to a certain extent, regarded as a challenge to the established profit model of brokers, which directly affects their potential profit growth space.

Globally, countries are committed to reducing ignorance and eliminating poverty, rather than viewing ignorance and poverty as exploitable resources.

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If a subject actively helps a group in a state of ignorance or poverty, this behavior is usually regarded as a positive contribution to social development rather than an unreasonable occupation of resources. Based on this, such behavior is generally not restricted or punished.
However, the 80/20 rule presents a special phenomenon in some areas, that is, ignorance and poverty are regarded as scarce resources. In these areas, if you try to enlighten the ignorant or help the poor, you may be regarded as stealing the scarce resources in the field, and then you will be restricted or punished with a high probability.
Take the field of foreign exchange investment and trading as an example. Successful foreign exchange investment practitioners often provide guidance to novice investors who lack experience or have limited funds. However, this behavior may attract the attention of large foreign exchange brokers. The main sources of profit for foreign exchange brokers include the spreads and handling fees generated by customer transactions, as well as the profits brought by customer stop losses and liquidation. Successful foreign exchange investment practitioners usually advise novice investors to use leverage cautiously to avoid the risk of liquidation; at the same time, it is recommended to set a reasonable stop loss strategy to avoid frequent stop loss triggering in unfavorable market conditions, resulting in unnecessary losses. These suggestions conflict with the interests of foreign exchange brokers to a certain extent, so successful foreign exchange investment practitioners may face restrictions from brokers, such as trading restrictions and traffic restrictions.
In fact, the concepts spread by successful foreign exchange investment practitioners, such as reasonable control of leverage use and avoidance of counter-trend trading, are essentially a protection of investors' rights and interests. Although these concepts conflict with the commercial interests of foreign exchange brokers, they are key elements for investors to ensure the safety of their own assets and achieve rational investment. This deeply reflects the complexity of interest relations in the field of foreign exchange investment and trading and the multifaceted nature of the industry ecology.

In the field of foreign exchange investment and trading, investors need to be particularly vigilant against those bad marketing methods promoted through the Internet. Accumulating rich foreign exchange investment and trading knowledge, common sense, experience and technology is the key to avoid being deceived.

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There is currently no formal foreign exchange trading platform in China, which shows that there are many risks in foreign exchange investment and trading. Although foreign exchange investment and trading is not gambling in essence, investors engaged in short-term or ultra-short-term trading are actually participating in a kind of online gambling behavior. This behavior is covered up by the concept of foreign exchange investment and trading, which makes many people ignore its essence.
Foreign exchange long-term investment is not gambling, but most ordinary investors lack sufficient funds and do not have the conditions for long-term investment. Suppose you have $1,000 in funds, invest only 0.01 lots and hold it for several years. This is indeed a long-term investment method, and there is a high probability that you will not lose money, and you may even make a profit. However, for retail investors who need to support their families, it is meaningless to invest $1,000 in 0.01 lots and hold it for several years. This is the real situation of foreign exchange investment.
Successful foreign exchange long-term investors are committed to popularizing foreign exchange common sense to help novices avoid falling into traps. However, this behavior runs counter to the interests of foreign exchange brokers, so it is often unwelcome and may even be subject to personal attacks. This is why some successful foreign exchange long-term investors choose not to answer questions. If you damage the interests of foreign exchange brokers, you may be besieged by a group of people.
Therefore, it is recommended that novices in foreign exchange trading learn more about foreign exchange common sense and not be confused by bad online promotion methods. Especially those promoters who claim to answer questions, some of them may not know that they are promoting bad foreign exchange brokers.

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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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