The method of unwinding the currency circle is mainly determined by factors such as the position status in hand, the trend of the currency to be purchased, the degree of hold, and expectations for the market outlook.
Generally speaking, there are several common solutions as follows:
Cut the mess quickly: If the currency you are buying shows a significant downward trend and shows no signs of reversal, it is recommended to stop the loss immediately and leave the market to prevent greater losses.
Sell high and buy low: If the currency you are buying is in a volatile trend and has a certain range of fluctuations, you can use the rebounding market to reduce your position or unwind your position when it is high, or you can cover your position or build a position when it is low, so as to reduce costs. Or increase revenue.
Downward amortization: If the currency you are buying is in an upward trend and has a strong support point, you can continue to increase your purchases as the price falls, thereby averaging the cost and waiting for the price to rebound to make a profit.
Short-selling hedging: If the currency you bought is deeply locked up, and there is still room for further decline in the market outlook, you can short the same or related currencies in the contract market to reduce losses or achieve hedging.
The prerequisite for unwinding the currency circle is to have clear ideas and decisive operations. You must not blindly chase the rise or fall, be greedy and fearful, or worry about gains and losses. At the same time, it is necessary to effectively manage and control positions and risks, and make arrangements for stop-profit and stop-loss. You should not rely too much on technical indicators and news, but should combine your own analysis and judgment.
