This theme is a good question. In futures trend trading, after a period of ups and downs, there will be movements in the opposite direction. At this time, many people are not sure. Is it a technical callback? Or is it an order to stop loss and take profit? Or healthy bulls or bears?

Image from Zhihu @ Josh Lager

First of all, we need to know the current trend and time range, because it is meaningless to discuss the trend without time.

(2) Technical callback is a normal and healthy price callback, such as Fibonacci number, 0.5 or 0.6 18, which are generally important points. Generally speaking, if you break through 0.6 18 and continue to run in one direction, it will no longer be a technical callback.

(3) The risk and strategy of dealing with callback are largely determined by the entry position. A good entry position and a favorable opening position will enable you to gain something even in the callback, at least there will be no negative account appreciation.

(4) If it is confirmed that the trend is no longer a normal technical callback and reaches the critical pressure level (a region with relatively concentrated supply, which can also be understood as a region with multiple orders), it is necessary to consider closing positions and refusing losses. Or set a stop loss and open a position in the same proportion in the opposite direction to hedge the risk.

⑤ At the same time, according to the correction of the price movement direction and the change of trading volume, find a favorable position to open a position in reverse, so as not to miss the good band trend.