Only by understanding the market can we adapt to the market. This is the basis of trading and the premise of making profits in this market. Ordinary people do not have such strong research strength to do comprehensive fundamental analysis, and it is impossible to become a technical analyst who is proficient in all "eighteen martial arts", but there are still rules to follow in order to gain a firm foothold in futures investment and trading. The author believes that as long as investors follow and do a good job in the following three steps in the process of investment and trading, although I dare not say that they can win every battle, at least they can "win with roots and lose with evidence" - they can do it in a real and stable manner. A good investment transaction is "managed" just like an industrial investment.
1. Observe the market and wait for the opportunity.
"Knowing how to buy is an apprentice, and knowing how to sell is a master", this common saying has been used as a mantra by the majority of stockholders and futures investors, and it is used to describe the importance of judging signals of closing positions (meaning sell in stocks) in investment transactions. In fact, in addition to "buy" and "sell" in investment transactions, there are also "short positions", that is, rest periods. Rest should be a link that cannot be ignored. What we have to do while resting is to observe the market and wait for the opportunity.
When we do not understand market conditions, we must know how to take a break to avoid risks and uncertainties brought about by the ambiguity of the market; After the stop loss comes out, you should rest after the backhand stop loss appears, so as to avoid unnecessary risks caused by impatience and blind mentality.
When resting, observe the market and wait for the opportunity. Through the observation of the market, the target varieties are selected, and then the overall evaluation is carried out. When a variety is selected as a strategic investment target, then waiting for the time to mature will be the primary task. Since the futures market implements a margin system, which makes the price fluctuations appear to be more severe than other markets (such as the stock market), timing is particularly important. Although the issue of timing is only a part of the trading process, a good position opening area is a strong guarantee for strategic defense and enhanced position confidence, and it is also an important basis for the easier implementation of the entire investment plan. The choice of timing should proceed from the perspective of safety and ease of defense, otherwise the motivation of investment will fall into the situation of greed intentionally or unintentionally. The so-called easy defense means that even if there is a mistake in the general direction, the positions entered can also exit the market with no loss or a small loss.
Rest, watch, wait is to move forward faster.
Second, formulate plans and control positions.
Correct actions come from correct thoughts, and correct transactions depend on correct judgments on the market. After correct judgments, a series of plans must be formulated, including opening positions, increasing positions (or replenishing positions), and closing positions and retreating (or stopping losses to leave the market) ) and other steps of the plan. Whether the plan is comprehensive and executable is related to the smooth implementation of investment transactions and the response to sudden market changes in the later period.
The planning process includes the allocation of positions, that is, the proportion of the total funds occupied by the initial position building; whether or how to cover the positions when the market reverses and changes slightly (for example, still within a range), and the proportion of the total funds occupied by the funds for the replenishment; When the market makes a breakthrough in the direction of investment, whether to increase the position and how much proportion; when the market breaks the stop loss position, whether to stop the loss immediately or wait for the closing price to confirm the stop loss and a series of details.
Fund management status is a concentrated reflection of a trader's inner world. Good fund management helps investors to maintain a harmonious relationship with the market, helps traders to give full play to their level, and helps improve transaction quality rather than quantity. In actual operation, the most common mistake we make is eager for quick success - always trying to increase the amount of margin investment, hoping to achieve excellent results in a short period of time. This impetuous mentality of eagerness for battle and success has led to the shadow of danger, fear and failure never leaving him until he is completely defeated. The common situation is that when the price is not very unfavorable, investors need more patience.
3. Respond to fluctuations and get out of the game smoothly.
After the position is involved, the main work in the later stage is to track the price trend. Due to the large disorder in short-term price changes and the leveraged margin system in the futures market, a little price fluctuation can "touch" the hearts of investors. In a wave of trends, short-term repeated price changes are normal, and investors must face and make a choice-close positions or continue to hold! Therefore, to deal with fluctuations and how to get out smoothly requires a dynamic corresponding strategy.
When unfavorable situations or ominous omens appear, one should be very vigilant and consider leaving part or all of the market. To predict and judge unfavorable situations, it is necessary to follow up and evaluate the market to determine the current degree of risk.
The focus of the follow-up evaluation is: (1) what new favorable and unfavorable factors have emerged in the current market; (2) potential factors that will have a significant impact on the market in the future; Especially qualitative changes; (4) Whether changes in market prices and related technical indicators indicate that the trend may be interrupted or reversed; (5) Refer to historical market prices and data to find out the price area "corresponding" to current market information. Then make a decision on whether to continue holding positions (or the ratio of holding positions) based on the evaluation results.
Appearance generally follows the principle of "early exit"-early exit is better than passive withdrawal. Excessive pursuit of profit maximization will make it easy for us to challenge the limits of the market, and then become greedy. There should be room for "eating fish only eats the middle part of the fish, and leave the rest to others".
The changes in the investment market are intricate, and the difficulty of investment is actually not as simple as most people imagine. It requires more "professionalism". A deep understanding of the futures market requires investors not only to have rich knowledge and practical experience, but also to have extraordinary wisdom and understanding, and even to have a distinctive personality without obvious defects. Even if an investor has all the above characteristics, there is still no guarantee that he will be invincible in the market, because in the futures market, effective profit methods are always personal, temporary, and constantly changing, and the futures market does not exist. The popular, ever-effective panacea. We must learn and practice over time to improve our investment and transaction level, always maintain a humble attitude, and continue to learn and explore. Wealth can only come from bit by bit accumulation. Never have the idea of getting rich overnight, and don’t have the idea of rushing to make money after a major loss. It is these ideas that lead to the disastrous as a result of.
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