I. Uncertainty of fluctuation and stability of trend
The elusive thing about futures is: uncertainty. To crack the password of futures trading is to find relative stability in uncertainty.
The fluctuation is full of contingency, but the fluctuation range is relatively stable. The fluctuation range is not easy to be broken. Once it is really broken, it often means the formation of a trend.
The fluctuation is unpredictable, but the trend is relatively stable.
Once the trend is formed, it is not easy to change, and once it is changed, it is not easy to change.
There is relative stability behind the uncertain and accidental appearance. If you toss about uncertainty, your heart will be tortured with the fluctuation of price. Only when it is relatively stable can the operation become easy.
Futures trading is nothing more than opening positions, closing positions, taking profits and stopping losses. It is nothing more than taking advantage of the trend, cutting off losses and letting profits run.
But it's easier said than done. And it will not happen overnight to really realize the difficulty.
2. Difficulties in opening positions, taking profits and stopping losses.
Open position signal, simple, just look at the basic form.
The difficulty lies in: falling into the fluctuation, but setting a stop loss according to the trend trading idea, the stop loss can not be eaten, but the stop loss will be swept again and again. After several stops, even the big trend can't be made up.
The fluctuation has a relatively stable range. If you fall into the fluctuation range with the idea of trend trading, then the opening position and stop loss have the nature of chasing up and killing down, which leads to the opening position and stop loss are often at the most unfavorable point. Take profit is either out of the fluctuation range, or there is little profit left after the retreat.
The solution is to regard fluctuation as an interval. Once you find yourself caught in fluctuation, jump out of the circle and wait and see.
The trend has a relatively stable direction, and the fluctuation has a relatively stable tossing space. What traders have to learn is to understand these two relatively stable things. The technology used is nothing more than: avoiding fluctuations in the form and support pressure, grasping the trend, and using the support pressure to stop profit and stop loss.
Don't participate in fluctuations, but use the relative stability of fluctuation range, set a stop loss outside fluctuations with the help of support pressure, and leave appropriate tossing space for fluctuations through stop loss to filter out fluctuations.
The key points of opening positions are: don't rush to open positions, calmly capture the morphological signals formed by trends, and pay attention to whether the market is in fluctuation.
If it is a trend market, if it is done right, the stop loss will not be swept; If it is a volatile market and the stop loss is set improperly, it is easy to stop the loss continuously. If you stop the loss many times, the loss will be heavy and irreparable.
The essentials of stop loss: stop loss should be placed outside the fluctuation range to avoid being easily swept away, and at the same time leave room for fluctuation while controlling risks, thus playing a role in filtering fluctuations.
The fluctuation range has certain stability, and it is most afraid of chasing up and down. As long as you open the position and stop the loss, you often get the most unfavorable position in the volatile market, mostly cutting from the top to the bottom, and cutting to the ceiling with an empty floor.
What is even more maddening is that the stop loss is quickly hit, but the take profit is often unable to close the position. People who have been doing futures for a long time believe that everyone has this experience, as if the market is always against themselves.
The answer to this question is: the fluctuation range has certain stability. The fluctuation range is limited, and chasing up and down is naturally easy to grab the top and bottom.
Since the price goes back and forth repeatedly in the fluctuation range and the stop loss is set in the range, it will naturally be easily swept. Such a stop loss can only bring futile losses, unable to control risks, filter fluctuations and verify trends.
The reason why take profit can't be hit is also very simple. With the idea of trend trading, toss and turn in the fluctuations. Take profit is outside the range, so the probability of hitting is naturally small, or if you don't hit it, you will often move forward a lot.