There are three different strategies for position trading:
1. Same-day trading method
The same-day trading method refers to transactions that close positions before the market closes that day. method. Those who use this method only predict the trend of futures prices in a short period of time in the future, in order to seize the fleeting profit opportunities in the market. When they discover that they have made a mistake, they immediately abandon their position, that is, take hedging transactions. Since their positions are held overnight, they are called day trading methods. The main advantage of the day-trading method is that it can seize various smaller profit opportunities and play the role of making a profit; its main disadvantage is that the transaction cost is too high. It is suitable for use in a strong bull market or bear market. Most of the traders who use this method are exchange traders.
2. Downstream trading method
Flower trading method is to establish long positions in bull markets and short positions in bear markets. The downstream trading method believes that the movement of futures prices is the same as that of stock prices. There is a trend, that is, a long-term upward or downward trend; once the trend is formed, inertia will cause the market price to move in this direction until a major event changes the trend. Until this trend. Downstream traders are mostly technical analysts who usually use methods such as moving averages to determine when to buy or sell. The moving average method is to determine a calculation number of days in advance (such as 20 days, 30 days), then add up the market prices of a certain futures on these days, and then divide by the number of days to get an average; as time goes by, continue to use the latest The daily average is calculated by replacing the price of the furthest day with one day's price, holding the number of days constant. By observing the direction of these averages, investors can determine the direction of futures prices. The key to the moving average method is to determine the appropriate number of days. If there are too many days, the moving average will be less sensitive, and if there are too few days, the moving average will be easily disturbed by daily fluctuations in futures market prices, resulting in erroneous beliefs. In order to overcome these shortcomings, investors often choose twenty or thirty days (such as 20 days, 30 days, 40 days), and use the different results calculated by these days to conduct comparative analysis in order to decide whether to hold long or short positions.
After the position is determined, downstream traders often use stop loss orders to limit the amount of losses when the price changes adversely. When holding a long position in futures, a stop loss selling order occurs at a stop price lower than the market price; and the stop price continues to rise as the futures market price rises, but does not fall as the futures price falls. When you hold a short position in futures, you will be stopped at a stop price higher than the market price and lose the purchase order. Moreover, the stop price will continue to fall with the decline of the futures market price, but will not rise with the rise of the futures price. The advantage of letting the stop price float with the futures market price is that existing profits can be preserved. If the stop price is too close to the futures market price, the daily fluctuations in the futures market price will easily disrupt investors' plans; if the stop price is too far away, investors may suffer greater losses.
3. Countercurrent trading method
The countercurrent trading method refers to trading when the futures market price temporarily deviates from the normal track due to excessive buying. For example, if futures prices tend to rise during a certain period, but due to oversold conditions in the market, futures prices temporarily fall, countercurrent traders will seize this opportunity to buy futures. However, in order to prevent futures prices from falling further: indicating that the trend of futures prices may change, speculators' orders will be executed, thereby ending the long futures position. If the futures price rebounds, countercurrent traders can profit from the long position. At the same time, when the price rises to a certain height, they end the long position and change to a short position. At the same time, a stop loss purchase order is issued at a higher stop price to avoid futures The market price rose further.
In short, the downstream trading method mainly uses the main trend of futures price changes, the countercurrent trading method mainly uses the secondary movement of futures prices, and the day trading method mainly uses the daily changes in futures prices.