A. Basic principles of fund management
Investment guru Soros once said: "There is no risk in investment itself, only out-of-control investment is risky." With the gradual increase of trading years, I realize more and more that the technology I have been looking for is becoming simpler and less important. We seem to have taken many detours, and now we understand that the success or failure of the transaction ultimately depends on our level of fund management and risk control.
I told myself from experience and lessons that there may be nothing new in the futures market, and even some well-known truths, but after years of exploration on a thorny road, these truths have long been unforgettable and deeply rooted in the bone marrow. ...
Fund management and risk control are the core of the survival of the futures market, the watershed of the success or failure of trading, the root of all problems in speculative trading, and an important factor in determining whether you can make a long-term stable profit.
Do not enter the market without the management and planning of funds, risks and positions. The important principles and tactics of continuous successful speculation are to control losses, control retreat, protect principal, make big profits with small losses, and make a good capital curve. At any time, we must limit the loss to a clear and controllable range, so that we can become a real winner.
I once read a passage on the Internet: "The fundamental difference between a loser and a winner is that the loser's stop-loss point (actually an irresistible point) is too big and the take-profit point is too small. It is easy to make money, that is, wait patiently for the breakthrough of classic graphics and hold it patiently after the breakthrough. "
As we all know, the core of all trading strategies is to get as much profit as possible from profitable positions and as little loss as possible from losing positions. If you can't put money management and risk control in the first place, if you can't always walk on thin ice and be cautious, then even if you make a lot of money, you will have to pay it back one day. Therefore, only by constantly making profits and consistently implementing the principles of capital, position management and risk control can we survive and develop in this market for a long time, and it is possible to realize our dreams that others can't.
B. adjust the position at any time.
Personally, if you can trade 70% of positions in a day, you must have a small stop loss and a fast stop loss, otherwise you can only trade lightly. Generally speaking, heavy positions must be fast, accurate and ruthless, must have a small stop loss and a small cycle, and must be decided quickly by courage; Light warehouses make money by endurance and time. Specifically, heavy positions can only be used in two situations: first, short-term trading in the day uses heavy positions, and profits are immediately seen after entering the market, otherwise you must leave quickly with a small stop loss; Second, in the trend of unilateral market, the profit and direction protection of the initial position can be changed into relative positions by adding positions.
In addition to the above two situations, you can't hold uncontrollable heavy positions at any time, and you can't trade heavy positions, because heavy positions can easily lead to an imbalance in trading mentality and a big loss in one day. Excessive stop loss, overweight positions and lack of strict fund management rules are always the main reasons for trading losses. If you don't make money from this market in the wrong way, then this market won't punish you. Numerous experiences and lessons have proved that we should pay attention to the following aspects:
First, the positions on MA60 and MA20 are determined according to the market level when opening positions, and only the high probability patterns of * * * vibration at all levels are made, and different levels of * * * vibration should correspond to different positions. Try to avoid shocks and adjust positions at any time in shocks and trend markets.
Second, the standard of overnight positions is to consider whether to hold overnight positions and the proportion of positions half an hour before the daily closing. Under the premise of floating profit protection, match 20%-50% positions in the directions of time-sharing chart, 1 minute K line, 5-minute K line, 15-minute K line, hourly K line, daily K line and weekly K line. Any time you place an order overnight, you should be cautious. The first consideration is risk. When you can't see the market, the position you leave must be prepared to experience a reverse stop loss. If you can't bear it, it is an unreasonable position.
Third, the trend list adopts the position management strategy of taking advantage of the trend, lightening the position, testing the position on the left, adding the position on the right and lightening the position in stages. When the time-sharing chart rises or falls sharply in the day and stops falling, some positions should be closed first, and this should be noted after short-term profiteering, and some positions should be kept until the trend reverses. In addition, the proportion of trial positions shall not exceed 10% of account funds. After the direction is verified, the position can be increased at a new critical point, and the position of a single variety can be increased to 30% of the account funds.
C. the retreat must be strictly controlled.
Paul Tudor Jones, a top Wall Street trader, said, "Every day I think my position is in the wrong direction. I keep an eye on the stop loss and control my biggest loss. I hope the market can meet my expectations. If I'm wrong, I also have a resignation plan. Don't try to be a hero, always question your ability and judgment, and don't feel good about yourself. Once you have done it, you have already lost. "
Jones thinks his strength is detachment. Anything that has happened is a thing of the past. What happened three seconds ago is irrelevant. The key is what to do next. Emotionally, away from the market. If your previous view is wrong, you must correct it in time.
After years of trading, I have concluded that the secret of success lies not in accurate trading points, but in avoiding large losses. From beginning to end, we must strictly control our single, single and monthly maximum losses.
How can we control the retreat and make a good capital curve?
First, the single loss is controlled within 2% of the total funds. In the case of no profit, a relatively small amount must be set as the stop loss for the first entry, and if there is a loss, the reduced principal will be used as the initial compensation. Second, the one-day loss control must be within 5% of the total funds, reach the maximum risk ratio, and stop trading on the same day; Third, the monthly loss control must be within 20% of the total funds, reach the maximum risk ratio, and stop trading that month.
In short, don't turn profit into loss, Zhi Zhi Fang Zhihang. Keeping profit is as important as keeping principal. Never turn a profit sheet into a loss sheet again; The loss of a single transaction should not exceed the profit of the previous transaction; The loss of one-day trading cannot exceed the profit of the previous trading day. Once it is exceeded, it should immediately close the position and stop trading on the same day. If you must trade, you need to wait until your mood is zero, which can be minimized.
After the one-day loss reaches a certain limit, you must stop trading first, calm yourself down, re-examine the trading plan and the next countermeasure, and don't have the emotions, ideas and practices that the more you lose, the more you want to get it back immediately. You must really accept that losses are part of the transaction, and accept the trading mentality that only a small stop loss can win a high probability event.
D. Emotional management is very important
Generally speaking, if you lose money three times in a row, you must lighten up your position, operate lightly or suspend trading; If you lose money for three consecutive days, you must lighten your position or suspend trading, calmly reflect, and then operate lightly.
Jesse Livermore once said: "The vast majority of speculators have a common problem-eager to succeed. They don't take speculation as a serious matter, nor do they operate according to ordinary business principles. When we do any industry and continue to lose money, we will not continue to increase investment, but will only try to find reasons to improve or close the door. "
So should futures do the same? When you lose money, you must lower your expectations, reduce the order quantity and frequency, otherwise it will inevitably lead to single and single-day losses. Especially when you are in a loss, the best way is to stop loss and stop trading immediately, because when the fear of loss rises gradually, emotions will start to short-circuit people's minds, so you must leave immediately and stop emotional operations.
In fact, when the transaction is not smooth, it is the time to test the trader's ability to quickly adjust his mentality and position. A well-trained trader must let himself go out and wait and see when the operation is not smooth. When there is a sudden big loss, he must close the loss position without thinking, wait until he is completely calm, completely accept the loss, and return to zero before making the next transaction.
The correct posture must be a posture that makes you feel comfortable, a posture that doesn't matter whether you look at the plate or not, and a posture that can make you sleep well. Once you feel emotional changes, nervous, depressed, worried ... you should pay attention and close your position at any time.
Position is an important factor in emotional management and effective execution, and emotions reflect greed and fear in trading. Its impact on trading is more important than technology, and it is also an important indicator of trading. Speculation is a comfortable and just right thing. In the market, pain is the opposite of success, so if you feel pain, leave quickly. If you feel comfortable, go on. In other words, when you make money, it is the right time, and you must continue as much as possible; When you lose money, it is wrong and painful. The sooner it is over, the better. When the mood is not suitable, we should respond decisively. Once the mood is wrong, it is either too early to enter the market, or a heavy position, or it is time to close the position. The correct trading and positions must be relaxed and happy.
When losing money, don't let any thoughts and emotions play a role, only stop at the stop loss point set after opening the position; When you make a profit, when you want to cash in the profit emotionally, let the action of closing the position slow down, let your mood slow down, find a good signal of closing the position and let the system execute it. We should avoid being influenced by subjective emotions, remember the rules, follow the signals, go in and out according to the conditions, and always remain calm, alert and objective.
Jin fan's writing