The author was misled by these things at the early stage of entering the futures market. After two or three years of losses, I re-examined these false propositions.
Since 2007, it has been profitable for nearly three consecutive years. The pursuit of low-risk and high-yield trading ideas has become the core of the author's trading system.
So how to achieve low risk and high return? Before starting this question, it is necessary to talk about these golden rules of futures market that I think are false propositions.
The first unknown function: high risk and high return
In my opinion, there is no internal relationship between the level of risk and the level of income. On the one hand, it is given by the operator's subjective judgment, on the other hand, it is caused by the operator's mentality and operation methods.
For example, we often hear people say that the upside of this position is more than 300 points, the downside is the largest 100 points, and the risk-return ratio exceeds 1:3 ... In some research reports or investment plans, we often see such a statement: the maximum investment income of this investment plan is * *%, and the maximum loss is * *% ... This is actually all.
There are four situations caused by the operator's operation methods:
1, high risk, high return-the typical risk-taking method is heavy position plus dead shoulder type;
2, low risk, low return-the typical technique is short warehouse day;
3, high risk, low income-the typical method is to enter the market with heavy positions, run when you earn, and lose when you lose;
4, low risk, high return-the focus of this article is to be talked about later.
The second unknown function: follow the trend
As the golden rule of futures operation, almost no one will object to this statement.
So is following the trend a sufficient or necessary condition for profit? I said: neither.
Since everyone knows how to follow the trend, why is the market 50% funded and 50% funded at any time?
There is a classic saying. It's called: the trend is coming out. In other words, we often don't know its next direction until the trend comes out.
The so-called follow-up, before opening the position, is a trend, but after opening the position, it is still not a trend, so we have to wait for the market to tell you.
While we are following the trend of one level, we are going against the trend of another level.
And the market is ever-changing, in fact, no matter which level of trend, it is possible to come to an abrupt end or even start to turn around at any position. ...
The third unknown function: light warehouse trading
Light warehouse is a favorite word in the market, and the purpose of light warehouse is nothing more than reducing risk.
Of course, from the perspective of reducing risks, light warehouses are still necessary. But what I want to say here is that as an excellent trader, light warehouse trading is by no means the main means to reduce risks and ensure returns.
No matter how small the wrong position is, it will be big, and no matter how big the correct position is, it will be small. If we are satisfied with light warehouse trading, what is the significance of the 10 times capital leverage given to us by the futures market?
Master Crowe
Rule 2 of the famous futures classic "Ghost Gift" mentioned: "Rule 2 guarantees that when you trade correctly, you have a large proportion of positions ... unless you can see the benefits brought by Rule 2, it is difficult for you to understand how important heavy positions are to traders ..." I deeply agree with this statement of ghosts!
In addition to the above, there are some specious traditional ideas and methods in the futures market, which most investors know little about, but they are deified and practiced, and the result can be imagined.
For example, cut off the losses and let the profits run, but the result is a stop loss again and again, but the profits have not been able to run ... and so on, here are one by one.
It is not difficult to see from the above discussion that it is obviously impossible to achieve our goal by relying on the traditional conformity view. How can we achieve low risk and high return? Here, I would like to talk about my trading experience.
This experience can be condensed into one sentence:
Be able to open the right position at the right point, at the right time, in the right direction! Only in this way can we get high returns at low risk.
It is not easy to do this, but it can certainly be done.
Its premise is that the market must go out of a certain state that is very certain for you personally, which may be very different for different traders.
But what is certain is that every excellent trader will have his own "very certain state". Some people's state may mean a wave of unilateral pull-up, some may mean a period of intraday trend, some may mean a period of rapid diving, and some even mean a wave of inter-annual trend market.
And this "very certain state" belongs to the author personally (one of them). Generally speaking, it will include the following elements:
A. From a fundamental point of view, the trend of the market fully reflects the fundamental changes in the previous period. After the necessary stalemate, the fundamental balance began to tilt to balance, and there was an opportunity for reverse tilt.
B, from a technical point of view, it is out of a state of facing the choice of key directions, or a certain limit and reasonable state of reverse operation of small trends in megatrends.
C is the most critical point. In this position or state, the probability of a sudden big reversal with the opening direction is extremely small, and once a big reversal occurs, it must be able to give a clear stop loss signal at a position not far from the warehouse point, that is, at the beginning of the big reversal.