Let's share a short story first. An old lady in Britain decided to go long or short by flipping a coin. If she is wrong, she will lose a dollar, and if she is right, she will earn three dollars. The profit-loss ratio is 3: 1. She earned 30% income every year in this way, surpassing many fund managers.
It's really interesting that you can make 30% a year by flipping a coin. Why? There is a simple reason. The behavior of the old lady in Britain seems funny, but it is completely in line with the trading concept of XiaoBoda. Therefore, she can get a good return. Yes, if each transaction loses 1% and earns 3%, then you have a 25% success rate and can make a profit. If you work harder and the winning rate reaches 50%, you will have made a lot of money. This is the charm of small and wide, and it is right to speculate in futures.
Some time ago, a friend of mine told me something he experienced personally. He told me that before cotton (13390, -95.00,-0.70%) rose by 2010, several of his classmates who worked in cotton-related enterprises found him and said that cotton might have a big market. Several students' suggestions are: 500,000 each, raise 2 million yuan, have more cotton futures, a lot of money, and aim at 40 million yuan. And if it's wrong, when this 500,000 calls to Shui Piao, it's affordable anyway, and it can't hurt everyone's bones and muscles. My friend didn't like the plan, so he didn't join in the end. As a result, everyone can guess: these classmates of my friend earned more than 80 million yuan in this wave of cotton rising market, and each person was assigned 20 million yuan. He said regretfully, "Why was I so timid at the beginning? I am sure why I dare not be small and broad? " This experience of my friend also deeply taught me that the core of futures trading should be to be small and broad.
Small and wide is the essence of futures trading, but it is not reflected in margin leverage, but refers to obtaining greater returns at a smaller cost. For example, if you have 6,543,800 yuan and your goal is to earn 6,543,800 yuan, then you can use 20,000 yuan of 6,543,800 yuan to earn 6,543,800 yuan. Doing five transactions right at a time won't lose money, and you can still make a profit twice.
Being small and broad is actually a self-protection mechanism. In the case of your continuous misjudgment of the market, the smaller the loss each time, the longer you live in the market and the greater the probability of coming back to life.
From the easy way to the simple way, the way to make money is very simple, and it is no secret to use the trading concept of Xiaoboda, but how many people have calmly thought about it and put it into practice?