When is it suitable for left-handed trading and when is it suitable for right-handed trading?
If investors can understand and truly understand these two issues, they will survive better and better in the financial market than others! The author expounds these two issues in detail here. Before that, let's first understand what is left-handed trading and what is right-handed trading.
0 1
What is left-handed trading?
According to the author's many years of trading experience, there is no absolute concept and standard distinction between left-handed trading and right-handed trading. Therefore, the author first gives a general qualitative description here:
Left-handed trading: that is, see-price trading mode. In a certain period of time, a transaction that enters the market directly before the periodic high (or low) of the market appears, that is, a transaction that runs to the left of the potential high (or low) of the market, belongs to left-handed trading.
Right-handed trading: reference signal trading mode. After a certain period of time, it is determined by certain judgment criteria that the market stage highs (or lows) have appeared and been confirmed, the transactions running on the right side of the highs (lows) belong to the right side transactions.
From the above general definition description, left-handed trading and right-handed trading seem to be only transactions on the left and right sides of a high point (or low point), which seems simple, but in fact, to truly understand the essential difference between them, we must first understand the following two key points:
1
Left-handed trading and right-handed trading are also distinguished by time period level. Right-handed trading in small-scale circulation is likely to remain left-handed trading in large-scale circulation. Therefore, when discussing and considering left-handed trading or right-handed trading, we must first clarify and determine its time period level! This is the most basic premise!
2
How to judge the high and low points of the stage? Different standards and analytical theories will draw different conclusions, that is, what tools or theories are used to judge the so-called "high points" and "low points", which is the most critical! It is also the essence and core of truly understanding the difference between left-handed trading and right-handed trading! The author will elaborate on this point in more detail later.
02
Definition standard of left-right transaction
Left-handed trading and right-handed trading have their own advantages and disadvantages, and there is no absolute difference between good and bad. However, most professionals in the market prefer right-handed trading, and investors are also advised to focus on right-handed trading. If investors are doing homeopathic operations, this trading method should be adopted. On the contrary, for those investors who do market fluctuations or short-term operations, in many cases, they tend to choose more left-hand trading methods. Let's take a look at the following table to learn more about their advantages and disadvantages and the main requirements for investors.
Trading means
Left trading
Advantages: 1 If the market can meet the investors' anticipation, the entry cost is often very good. 2. It is not easy to miss some turning markets and opportunities and lay out in advance.
Disadvantages: 1, easy to guess the top and bottom, if the top and bottom run for a long time, it will lead to long-term psychological loss. 2. If the judgment of the top and bottom is wrong and the price exceeds expectations, the approach may be located halfway up the mountain, bearing a large loss and poor trading stability. 3. If the market is ahead of the potential highs and lows expected by traders, it may also miss the market.
Requirements: 1. We must make a comprehensive analysis in advance and make a detailed trading plan. We must not rely too much on subjective emotions to enter the market and guess the top and bottom. 2. We must cooperate with fund management and risk control, otherwise major risks will easily occur! Once you make a mistake, you must admit it resolutely and decisively, and you can't let the loss expand!
Right side transaction
Advantages: 1, only after the high or low point of the stage appears, so the relative success rate is high. 2. Avoid unexpected risks beyond market expectations and avoid unnecessary losses. 3. Pay more attention to objective signals and reduce subjective transactions.
Disadvantages: 1, often when there is a clear signal to confirm that there is a high point or a low point, the best entry opportunity has been missed, and the entry cost is average or even higher. 2. Different judgment criteria will lead to different so-called right-hand trading points and opportunities, and there is also the risk of repeatedly confirming high or low points, which has a certain probability of failure.
Requirements: 1, with clear, rigorous and scientific judgment standards and basis. 2. Have decisive execution, and don't hesitate to see the signal transaction. 3, need to have good concentration and patience.
03
Definition standard of left-handed transaction
As mentioned above, there is no absolute and unique standard for left-handed trading and right-handed trading. Because of the influence of different time frames, the judgment criteria of high and low points or top and bottom are different, so left-handed trading and right-handed trading cannot be defined quantitatively, and they can only be judged in the same way. Therefore, according to different judgment standards and different styles of each investor, two different judgments are determined.
The following two commonly used criteria for judging trading are suitable for grasping short-term homeopathic opportunities.
Rule 1: Take the main trend line in a certain period of time as the judgment standard to judge the left and right transactions.
The specific method is: if the price effectively breaks through the trend line at the closing price, it means that the previous trend is over and a new trend is likely to appear, so as to judge the left-right transaction, that is, the contrarian operation before the breakthrough is the nature of the left transaction, and the operation according to the new trend after the breakthrough is the nature of the right transaction. As shown in the figure:
Standard 2: Under the framework of a certain period of time, whether the head or the bottom is completed is confirmed by the technical form, so as to determine whether the left-handed transaction and the right-handed transaction are the dividing line between the left-handed transaction and the right-handed transaction. As shown in the figure:
In addition, there are criteria for judging the top and bottom by other theories, tools or models. Only under certain standards can the so-called "left-handed trading" and "right-handed trading" be distinguished, which is not unique to all investors.
Therefore, investors need to determine their own standards according to their own trading styles to judge the difference between left and right transactions, so as to make their trading styles or systems more accurate and clear, so as to cope with them calmly.
Finally, I want to emphasize left-handed trading and right-handed trading again:
Left-handed trading and right-handed trading can be used not only separately, but also in combination, but we must pay attention to their respective points:
In addition: 1, investors should pay attention to risk control and position management when trading on the left. If they can't get on, they will use heavy positions. The trading on the left belongs to the idea of early layout, which is suitable for light positions and small positions, and the stop loss is relatively wide, that is, "wide stop loss, light positions".
2. When the bottom or top of the market can be confirmed by a certain standard, the trading opportunity on the right side comes. At this time, the opportunity is clearer and more reliable than the left-hand transaction. You need to act decisively and don't hesitate to miss the opportunity. Of course, you can also add positions appropriately and adopt the method of "small stop loss and large position" to achieve the purpose of "profit galloping"!