First, the operating cycle.
First of all, we should consider the short, medium and long-term trend direction of the market and decide what kind of operation to carry out, so as to carry out the layout of the operation. The direction of long-term operation is "potential" first, follow the direction of the market, and don't subjectively preset the top and bottom.
The operation of the midline focuses on "quantity", that is, the performance of quantity and price coordination in the market. In the medium-term band trend, the relationship between quantity and price reveals a very important signal, which is used as an operational reference in conjunction with the technical trend analysis. In short-term operation, the focus is on "breaking", such as a breakthrough after a long period of time, seeking the best entry point purely from a technical point of view, and taking short-term technical analysis as the basis for entry and exit.
Second, the capital planning
After deciding the business direction, we must make an overall capital plan. First decide how big the part to be operated is, usually with reference to investment. A higher proportion of funds can be invested in the long-term part, and the short-term part should not exceed one-third of the total investment.
In terms of capital control, it is most taboo to put all your eggs in one basket. If all the funds are lost when the market is wrong, there will be no funds for subsequent operations.
In addition, when making a strategy, it is necessary to calculate the profit-loss ratio after the operation. Usually 3: 1 is more in line with the principle of speculation. If the profit-loss ratio is maintained at 3: 1 every time you enter the market, 50% of the profit will be added to the next transaction when you make money, and the next transaction amount will be deducted from the loss amount when you lose money. Even if the winning rate is only half, the loss probability is 0. 1875 if you enter the market five times. In the long run, the probability of loss is almost zero. Therefore, a good capital planning almost determines the quality of the operation strategy, which should not be underestimated.
Third, there must be a plan for offense and defense.
The formulation of strategy focuses on defense, and only with a solid defense plan can we attack abroad. For example, if there is no strong backing or flexible retreat, the chances of winning will be very low. On the contrary, they tend to linger in the last position and put all their eggs in one basket.
At the beginning of the transaction, we often face the embarrassment of ups and downs in the market, sometimes making profits and sometimes losing money. If you don't reach the bottom line of defense, don't rush for success. You must be patient and self-disciplined to avoid the success or failure of the operation because of emotional ups and downs.
When the trading strategy is drawn up, the offensive strategy should also be drawn up. When will the price increase? How much more? The attack plan can improve the profit, but it may also cause greater losses, so it is forbidden to overweight when losing money. Try to look at it from a business point of view. When you buy a batch of goods but can't sell them, and the market price is falling, will you buy them again? The same is true of the concept of overweight. When the market is running at a loss, it is like buying goods slowly. We can only try to deal with the loss, so how can we spare the energy to be overweight again?
Therefore, a perfect offensive and defensive plan can know the maximum loss of each transaction before entering the market, and can calmly deal with the short-term fluctuations of the market within the tolerable range.
Fourth, the setting of stop loss point
In the face of different operation stages, the setting of stop loss point is also different. In the long-term operation, the choice of stop loss needs a higher proportion, accounting for a higher proportion of funds, in case it is swept out of the house because of a temporary reversal of the market.
The choice of stop loss in mid-line operation usually tends to be technical, with reference to the trend line or the high and low points of the current trend. The choice of stop loss is often small, often based on the high and low points of the previous day or the opening price and closing price.
In addition, we should also consider the setting of time stop loss, and assume the duration of the market in this band before formulating the operation strategy. When there is a trend that the market should start but not start, you must stop with time. This kind of stop loss is mostly applied to the false breakthrough trend, which is difficult to set and requires rich market experience. However, investors can observe the historical trend, look for the number of false breakthroughs in the past trend, and count the number of days, which can be used as a reference for setting the stop loss point of future operating strategies.