Only by correct method can you succeed
People come to the futures market with good wishes. But what can make us make money in the futures market in the long term is not wishes, emotions, and big words. Aesop concluded at the end of his story about making stone soup: stick to the end, use the right method, and you will succeed.
A professional futures investor, recently, had no choice but to announce that he would temporarily leave the futures market and no longer persist. Previously, he had been involved in futures trading as a professional investor for three years. He came to the futures market with the idea that God rewards those who work hard and those who work hard. However, after all kinds of efforts, the investor's wealth did not increase significantly. On the contrary, the margin of the account continued to shrink, and at the same time, the investor became anxious. This investor often attributes his failure to his bad mentality and human nature (fear, greed, etc.).
First, you can make money by mastering Granville’s eight rules.
Skills are more valuable than more. If you can grasp this law well and apply it selectively, you will have the technical guarantee to make money in financial markets such as futures and stocks for a long time. If you can operate according to these rules, move when it moves and stay still when it is quiet, you can be at ease in futures and other financial markets. Many of the investor's practices often violate these eight rules.
Second, there are things to do and things not to do. Futures investment requires patience, and you must wait patiently for opportunities to arrive. No matter how smart a person is, it is difficult to reap anything from sowing in winter; on the contrary, no matter who sows in spring, crops will grow. The lovely thing about the futures market is that it provides a fair place where everyone can be Yao and Shun. As long as you seize the opportunity at the right time and take advantage of the situation, you will succeed. The problem with the investor above is that he wants to make any money. Sometimes he knows he has no clear direction, but he still does what he does. The ancients said: Knowing that something cannot be done but doing it is another confusion. This person often makes this mistake.
Third, protect capital first and make money second. Li Ka-shing once said that when doing a business, his first consideration is how to sell before buying, and to prepare the worst-case scenario in advance. For example, Li Ka-shing said, if the weather station says the weather is fine, then you should be prepared. What if the No. 10 typhoon signal is issued in a few minutes? In futures investment, you must also be prepared to leave the market under what circumstances before entering the market. In this way, you don’t have to worry about many uncertainties. Futures investors should probably have the image of a shield in the left hand and a sword in the right hand, and they should defend at the same time while attacking. The investor above is often at a loss when adverse situations occur after he enters the market.
Fourth, light warehouse. One of our very stable private fund managers controls the proportion of funds entering the market at about 15% every time. He also learned the profound lesson of light warehouse after making a lot of money and losing a lot, and he was able to strictly abide by it. In fact, if you follow the trend, you can still make big money with a small amount of money. Unsuccessful investors often want to achieve success in one battle and end up taking an all-or-nothing approach, which often leads to failure.
Fifth, don’t fall in love with your positions. Some people like to be long, and some people like to be short. Li Ka-shing taught his children that there is only money-making business and no permanent business. You might as well think of the futures position as a cud dog (a dog with bundles of grass used for sacrifice, thrown away immediately after the sacrifice). The purpose of establishing a futures position is to make money, and the established position must be abandoned when appropriate. The same goes for stocks.
Sixth, be brave, not ordinary. The brave man has the courage to enter decisively when it is time to enter. On the surface, brave people can make money by doing whatever they want, but in fact, they are backed by a practical trading system, which is a flexible application of principles. What the brave seek are market entry opportunities where fundamentals and technical aspects verify each other.
Most investors who lose money act decisively and blindly, and their courage is that of an ordinary man, often blinded by a leaf or looking for a sword.