Some readers asked me to introduce the relationship between positions and volume. It's hard to say that there is any obvious relationship between them. I can only introduce some functions of positions and turnover that I have understood for many years. From the most obvious point of view, contracts with large positions tend to have large turnover; Contracts with small positions tend to have small turnover. This truth is basically unknown to traders, but it has no effect on our trading. I've thought about it for a moment, so let's introduce the role of position and volume.

Let me briefly talk about the role of opening positions. Usually, the greater the position, the better the liquidity of the variety, the more financial institutions, industrial customers and retail investors will participate, and the variety will be relatively active and there will be more opportunities. In addition, the bigger the position, the bigger the long-short price difference, because the opening of futures requires the opponent's position. It is precisely because of the great differences between long and short sides on the future price of goods that the positions of this kind of goods will continue to increase. However, there is only one fact, either long or short, which determines that one of the long and short sides is making a mistake. Prove or discover when one party holds a contract with a large position.

Therefore, when we find that the position of a certain variety suddenly increases sharply, it shows that there are great differences in this variety. Once one party is proved wrong in the future, there will be greater market opportunities. Of course, if the position is enlarged because of the change of the month, it does not belong to the situation I said. It's not intuitive to say so much. Let me take the thread contract as an example. When the positions of all thread contracts add up to more than 5 million lots, it is 5 times, which is basically a unilateral big market with more than 1000 points. The last one happened in June this year.

At that time, steel mills entered the traditional off-season, and the expectation was very pessimistic. At one time, the thread was discounted by more than 400 points. However, at that time, the thread was also in low stock and deeply discounted. The basis of opening the warehouse is based on the actual situation at that time, with low inventory and deep water depth, and there is no logical problem; The logic of short positions is that the central bank tightens liquidity, which is weak on the macro level and enters the off-season of steel mill demand. It's rainy in the south, so the demand can't come up. Logically, there is no problem. As a result, the long and short sides continued to increase their positions, and the positions of all contracts for threads once again exceeded 5 million lots, once again staged a wave of thousands of quotes, and finally defeated the short positions based on the current facts.

In addition, we also need to pay attention to the location. If there is no significant reduction in positions due to changes in the month, it means that the market has come to an end, and one of the long and short sides has admitted to paying the bill. As the saying goes, bears will not die and cows will not stop. When short positions are reduced, bulls are easy to trample on the market due to lack of opponents, which may lead to more losses. On the contrary, in the process of falling market, if the bulls leave the market, it is easy to lead to empty market because the bears lack opponents.

I have already introduced this point in the previous article. I introduced the thread futures market at that time, taking Ge Weidong Ge Daxie as a case. I believe that if you read my previous article, you should have an impression. Basically, I only found the above two rules about the function of opening positions, and other applications are not clear for the time being.

Let me briefly talk about the role of volume. Trading volume is usually not viewed separately. If you look closely, you will find that there is a line on the bar chart of trading volume, which is the CJL indicator. This indicator tells you the trend of bulls and bears, and it is usually used in combination with trading volume.

For example, when the price of a commodity suddenly rises, while the CJL index falls, the trading volume increases, which indicates that the price rises because short sellers take the initiative to lighten their positions; When the price of a certain variety suddenly rises, the CJL index rises, and the trading volume is enlarged, indicating that the price rise is caused by the initiative of many bulls. Under normal circumstances, the rise caused by long positions is more lasting. If we understand the above judgment method, on the contrary, when the price of a commodity suddenly falls and the CJL index falls, the transaction volume increases, indicating that the price drop is caused by the initiative of the bulls to lighten their positions;

When the price of a certain variety suddenly drops, while the CJL index rises, the trading volume is enlarged, indicating that the price drop is caused by the short position actively adding positions. Mainly according to the relationship between price and CJL index to judge the trend of the main force. When the main force has a trend, the trading volume will be enlarged in the time-sharing chart or K-line chart.

Another function of volume is to choose to follow when the volume breaks through, lighten or close the position when the top volume breaks through, and pay attention to short-selling opportunities. These are not much different from stock trading, and there is no technical content at all. Generally speaking, I am more concerned about what I have introduced above.