Vulgar people, like me, are also one of them I want to explore the essence of futures from my own point of view, so as to find a convincing profit model in this market.
I think from the perspective of interest-oriented traders, the essence of futures can be interpreted from two aspects: first, futures are spot derivatives; Second, futures is a game of human nature. From the perspective of market observers, designers, operators or others, the essence of futures can have another meaning. )
First of all, futures are not born for no reason. Each futures variety and futures contract corresponds to a specific spot, and futures are born for spot. Although the relationship between futures and spot is sometimes close, sometimes loose and sometimes even the opposite, in any case, futures are derivatives of spot, and futures and spot are inextricably linked. This relationship is inseparable, inevitable and regular. From this point of view, if the spot research of a certain variety is thorough, making money in the futures market can be achieved smoothly.
Secondly, every fluctuation, price and transaction of futures are "artificial", and they are all made up of money with different views after extensive and democratic voting. Behind every fluctuation, every price and every transaction is the impact and compromise of strength, viewpoint, emotion and concept between people, which is the process and result of human game between different participants in the futures market. From this perspective, if we deeply analyze the characteristics of human nature and understand the laws of human nature, we can make money in the futures market more smoothly.
Because the essence of futures I understand is the derivative of spot and the game of human nature, from my point of view, the fluctuation of futures prices, the formation of trends, the seesaw and transformation of the market, etc. It can be understood as the process and result of the change of spot supply and demand and the human nature game of participants. Although both the change of spot supply and demand and the human nature game of participants are influencing futures prices all the time, I can simply define the main decisive force of long-term price fluctuation of futures as spot supply and demand; The main decisive force of short-term price fluctuation of futures is defined as the game of participants' humanity. In this way, maybe my futures trading will become relatively simple and operable.
Whether the following two sentences are correct or not, I can stand the rigorous test, but at this stage, I am subject to many limitations, but I can firmly believe that the law of supply and demand determining the long-term price trend remains unchanged, and the law of human nature determining the short-term price trend remains unchanged. With this belief, it is equivalent to having a core world outlook and values on the futures market, from which the corresponding methodology can be derived, that is, looking for the profit model of futures trading under the guidance of this core view.
Whether the market of a futures product is in a bull market or a bear market is determined by its spot supply and demand. Shortage corresponds to a bull market and oversupply corresponds to a bear market. If the spot of futures products is a commodity, it is easier to understand the relationship between supply and demand. If the spot of futures products is stock index or stock, then the relationship between supply and demand is actually the relationship between supply and demand of stock chips and currency. If the supply of chips is large and there is less money to buy chips, there will be an oversupply of stocks.
Bull market and bear market, that is, the running direction of the market is determined by the relationship between supply and demand, while the five waves, three waves or how many waves of bull market and bear market, that is, the walking path of the market is determined by human characteristics. For example, what we call "one stop, one stop, three stops" is a characteristic of human nature, so there will always be a "pause" in the operation of the trend market every time.
If we observe, understand, analyze and identify carefully enough, we will find that the mainstream people who participate in the market will show corresponding price fluctuations when they are impulsive, follow-up, panic, trapped, and want to leave their bags for safety. Any thoughts and emotions of any participant in the market will be reflected in the fluctuation of the market, but when the mainstream people do not form the same or similar views or States, the market is usually disorderly, random and fluctuating. However, within a certain time frame, the views or states of mainstream people tend to be consistent, and the market usually has an identifiable trend.
For all investors, understanding the macro fundamentals of the relationship between supply and demand, such as the degree of monetary easing and industrial policies, can be achieved by everyone; It is difficult for ordinary individual investors to know the details and fundamentals of the relationship between supply and demand of an agricultural product, such as planting area, growth situation, substitutes, growers' emotions, etc. Only institutional investors and professional investors are relatively easy to achieve. Therefore, individual investors are not lost to institutional investors and professional investors through fundamental research, but individual investors are obviously at a disadvantage through fundamental research on short-term trends. Fundamental analysis of the relationship between supply and demand is bound to be useful. As for the application of thick line analysis or detailed analysis, it varies from person to person. We should give full play to our strengths, not rely on our shortcomings.
When a trader observes the market, if he thinks that some types of market fluctuations have no obvious characteristics, then these markets are impossible for him to grasp. For him, he should take the initiative to "miss" these markets; If he thinks that other types of market fluctuations have obvious characteristics and can be identified, he can seize these markets. What he needs to do is wait for these types of markets to appear, identify them and seize them. Of course, due to the limited ability of personal analysis, summary and identification, as well as the variability of mainstream people participating in the market, traders may be "false appearances" even if they see market precursors with obvious characteristics, and they should also have coping strategies when encountering "false appearances", that is, stop losses in time. This is technical analysis and its application.
Technical analysis stresses "repetition". In fact, what the market repeats is not graphics, but human nature. The market sentiment composed of the emotions of the living must have rules to follow, because human nature is eternal and there are rules to follow. It's just that market sentiment is composed of thousands of participants with emotional differentiation in Qian Qian, which is more complicated and difficult to identify than a single person's sentiment. But in any case, when the emotions of the mainstream groups participating in the market tend to be consistent, the market sentiment is easily recognized. I think this is the essence of technical analysis.