When investors engage in futures investment, they should first determine the active capital and the maximum loss amount they can bear in futures investment according to their own financial strength and psychological endurance. For retail investors, the cash for each transaction should not be more than half. For middle households and large households, the cash used for multiple transactions should not exceed 1%-15% of the total amount of funds. That is to say, there is always enough reserve funds at any time to ensure temporary spending when the transaction is not smooth. The maximum loss of each transaction must be limited to 1% of the total funds, and this 1% refers to the maximum loss that the dealer will bear in the case of transaction failure. This is an extremely important starting point for us to decide how many contracts to trade and where to set the stop-loss order.

in addition, we should pay attention to risk diversification. The capital invested in a single futures market should be limited to 3%-45% of the total capital; In any market group, the total amount of margin invested is limited to 2%-25% of the total capital; The capital invested in the relevant commodity futures market should be limited to 6% of the total capital. These measures can prevent traders from falling into too much principal in the first-class market, resulting in poor capital turnover or missing better investment opportunities, while maintaining the liquidity of funds.

second, measure the ratio of reward to risk (profit-loss ratio)

The general rule of the futures market is that the number of losses is far more than the number of gains. The margin system in the futures market makes the futures market extremely sensitive. Even if the market changes only a little in an unfavorable direction, traders have to reluctantly close their positions. Therefore, before traders really capture the market movement in their hearts, they must make several exploratory attempts.

In the futures market, most transactions are in deficit, so the only hope of traders is to ensure that the profit of profitable transactions is greater than the loss of deficit transactions. In order to achieve this goal, it is necessary to measure the ratio of reward to risk. In practice, for each planned transaction, we should determine its profit target (reward) and the amount (risk) that may be lost if the operation fails. We weigh the profit target with the potential loss and get the ratio of reward to risk. The general standard of this ratio is 3:1. According to this ratio, when we consider the transaction, its profit potential needs at least three times the possible loss before it can be put into practice.

In addition, the possibility factor should be considered in the calculation of the ratio of reward to risk. Because it is often inaccurate to only estimate the profit and loss targets, there are many factors that affect their changes. Therefore, the potential profitability and loss should be multiplied by the probability of the above profits and losses respectively. "Let the profit increase fully and limit the loss to a small amount" is a cliche in futures trading. If we can stick to the long-term trend in futures trading, we can realize huge profits, but this requires a long-term vision of grasping the cycle and waiting patiently, because every year, such opportunities are only a few times.

Third, reasonably match the portfolio (eggs are not put together)

In futures trading, the purpose of portfolio matching is to spread risks. Portfolio matching is a science, and we can't put all our eggs in one basket, which is too risky; However, it is also impossible to evenly spread the investment among multiple projects, because the average use of troops often wastes people and money. The so-called "hit hard before hitting hard" traders often have several key investment goals as the biggest possible point of their own profits-the backbone, and then set up several points to diversify their investments-auxiliary forces to prevent risks.

We can adopt the method of compound position trading. Compound positions are divided into follow-up positions and trading positions, and follow-up positions are used to plan long-term goals, so it is necessary to set far-reaching stop-loss orders for them, leaving sufficient room for consolidation and adjustment of trading. From a long-term perspective, these positions can bring the biggest profits, that is, the so-called "backbone". Trading position is a position reserved for frequent short-term trading in the investment portfolio. Its stop-loss order has a short and flexible term, and its task is to detect risks and ensure long-term profits, which is called "auxiliary force". For example, if a market has reached a target and is close to a certain resistance zone, and the market is overbought, we can make profit by closing the trading position, or arrange a close stop order, with the goal of locking in costs or ensuring profits. If the trend recovers later, we can also use the remaining trading positions to make up the closed positions.

iv. setting of protective stop-loss orders (willing to cut the meat)

stop-loss orders can be used to open new positions or limit existing losses or protect the book profits of existing positions. The stop-loss order indicates the execution price of the relevant trading order. Traders must set protective stop-loss orders for their positions, which are completed by reverse price limit (liquidation) orders. The setting of stop loss order is an art, which needs to be grasped from both macro and micro aspects.

On the macro level, firstly, traders must comprehensively study the technical factors on the price icon and the requirements on fund management. Second: traders should consider the volatility of the market. When the market fluctuates greatly, stop-loss orders should be set far away; When the market fluctuates, it is set closer.

On the micro level, firstly, the buy-stop order is generally set above the market, while the sell order is set below the market (opposite to the price limit level). Second: trailing stop can be set up. For example, in the case of long positions, the selling protective stop-loss order is set below the market. If the price rises, we can also raise the level of stop-loss order to protect the book profit; We can also arrange stop-loss orders above the current blocking level and open long positions in time when a breakthrough occurs.