According to ancient stories, if a woodcutter in the south is bitten by a poisonous snake when cutting firewood up the mountain, he will usually cut off the bitten finger immediately, otherwise he may be poisoned too deeply and even die when he comes home from the mountain.
It is the simplest understanding of stop loss in life to lose big with small. In futures trading, if investors lose money in trading, they should immediately lighten their positions and stop losses. In chess, it is important to give up the car to protect the handsome, and in futures trading, it is important to keep the account with the injured finger-a small loss for life. Futures trading advocates "the leftover is king", not "the winner is king". Only by surviving first can we stand up again and open up new positions.
Plan the trading system first
When investors trade futures, they generally need a trading system, commonly known as a comprehensive plan for buying and selling, at least psychologically. A complete trading system includes: the market situation, that is, the market size of futures contracts has been solved; Position size, solve the problem of how many futures contracts to buy and sell; Timing of entry, to solve the problem of when to enter the market for contract trading; Stop loss solves the problem of how to deal with loss positions; Take profit, solve the problem of when book profit turns into actual profit and when to withdraw from the market; Trading strategies to solve the problem of how to buy and sell futures contracts. These six aspects have their own emphasis and are a systematic whole.
If investors do not establish such a trading system before futures trading, they are likely to operate blindly under the influence of hope and fear. When an investment is profitable, it should continue to be full of hope, but it is worried that these profits will go up in smoke and take profits prematurely; When there is a loss, you should be full of fear and stop loss in time, but you are full of hope that the price will reverse soon, and the result is a complete failure.
Liquidation time
The setting of stop-loss price is related to personal circumstances, but it mainly depends on the normal fluctuation range of the market. For long-term traders, the stop-loss price should be able to withstand daily price fluctuations, so as to avoid frequent passive stop-loss and ensure that the trading plan can be effectively implemented under the premise of correct decision-making.
Stop loss fund
Stop loss of funds does not need any special skills, and it depends entirely on the individual's ability to bear the loss. For day traders, capital stop loss is a very good method. For example, an investor trades futures with a principal of 6,543,800 yuan. When holding a futures contract position, he can be sure that his biggest loss in a day is 5%, that is, if he makes a mistake and the loss reaches 50 thousand yuan, he will unconditionally close the position. In other words, control the loss within the range that you can bear, maintain the existence of the principal in the account to the maximum extent, and reserve available funds for the next more favorable opportunity.
Technical stop loss
Technical stop loss is a combination of stop loss setting and technical analysis. After eliminating the random fluctuation of the market, stop losses are set at key technical positions to avoid further expansion of losses. This method requires investors to have strong technical analysis ability and self-control. But the choice of technical indicators varies from person to person. The main reference indicators are: important moving averages have been broken or fallen below; The tangent of the trend line is broken or broken; The neckline position of head type such as head-shoulder top, double top or arc top is broken, and the neckline position of head-shoulder bottom, double bottom or arc bottom is broken; The lower rail of the ascending channel is broken and the upper rail of the descending channel is broken; Broken near the gap and so on. For example, after buying in the lower track of the rising channel, wait for the rising trend to end before closing the position, and the stop loss price is set near the important moving average. For example, the price can break through or fall below the 5-day moving average or 10 moving average as the stop loss point, or break through the upward trend line and downward trend line as the stop loss point, or break through the lower edge line of the pre-finishing platform and the upper edge line of the pre-finishing platform as the stop loss point.
For example, on August 30, 2007, an investor crossed the 5-day moving average above the 10 moving average and immediately bought fuel oil fu07 12 above 3,435 yuan/ton. At the same time, he took the 4-day moving average below the 8-day moving average as a stop loss order. From September 6th, fuel oil began to pull back, opening lower and rising continuously. By September 10, the 4-day moving average broke through the 8-day moving average, and investors stopped their losses near the closing price of 3403 yuan/ton according to the previously determined stop-loss plan. Stop loss is (3403-3435 )×10×1=-320 yuan per lot.
Profit method
Take profit refers to selling profits and closing positions. The profit-taking principle of futures trading is to "follow the trend" and "make profits develop continuously", and investors can move up the profit-taking point continuously. For example, investors buy several contracts of a0805 at the price of 3600 yuan/ton in the rising channel, and determine the stop loss of 3500 yuan/ton. After that, when the price rose to 4,000 yuan/ton, the profit-taking position was 3,920 yuan/ton. In other words, if the market price of a0805 contract drops by 80 points from 4000 yuan/ton to 3920 yuan/ton, it will take profits and close the position. If the decline does not exceed the limit or continues to rise, it will continue to hold. Similarly, if the market price continues to rise, the take profit point will increase accordingly until the trend of this wave of market changes obviously.
Locking the warehouse is not the best choice.
Locked positions include profit locked positions and loss locked positions. Profit lock-in refers to a certain amount of book profit generated by holding futures contracts for a period of time and opening new positions in the same contract and in the same amount without opening positions. Loss locking refers to a certain amount of book losses after holding futures contract positions for a period of time. Because you don't want to turn the book loss into an actual loss, you open a new position in the same contract in the opposite direction without opening your position, in an attempt to lock in the number of losses. Numerous trading practices have proved that locking positions is not a wise operation method, especially for loss locking positions. The following is an example of an investor who suffered losses because of locking positions, although his judgment on the market is correct.
In the first half of 2007, the drought in China soybean producing area led to soybean production reduction. Investors have increased their demand for soybean meal on the basis of reduced production and rising pork prices, thus boosting their futures prices. So he bought the soybean meal m080 1 contract at a price of 2630 yuan/ton. After rising for several days in a row, the soybean meal futures price was temporarily lowered by the national macro-control policy. When its price is lowered to 2590 yuan/ton, investors are reluctant to stop loss and set the same number of empty orders to lock loss positions at the price of 2590 yuan/ton, in order not to further expand losses.
When the market price continued to be lowered to 254 1 yuan/ton, the investor still did not take any action. When the price of soybean meal began to rise to 2654 yuan/ton, investors closed their positions and continued to hold the same number of empty orders. When the price of soybean meal rose to 2838 yuan/ton, investors finally had to close all the empty orders and suffered huge losses.
The disadvantage of locking warehouse is that it takes up double margin, which reduces the efficiency of using account funds and increases the investment cost. More importantly, locking positions seriously affects the trading mentality. Because it is a two-way position, there will be a certain psychological burden when the position is released, and there will inevitably be hesitation and confusion.
In futures trading, due to the existence of hope and fear, it is difficult for investors to correctly grasp the problems of stop loss and take profit. Only by fully understanding and mastering the methods and skills, coupled with the cultivation of mentality, investors can become the ultimate winners in the futures market. (Yu/Public Financial Consultant)
The above information seems a bit complicated. If the landlord wants to know more comprehensive futures knowledge, recommend a professional futures website to the landlord: China International Futures Mid-term Online website, which has a column of futures school, which can help the landlord to ask questions.