Another inference used by professional operators is that in any given market or two related markets, you should buy in the strongest position and sell in the weakest position. Is to hedge the value of your bet in a structural way. Because if the market goes up, your long legs will go up faster than your short legs; And if the market falls, your short legs will fall faster and more. In some markets, such as the futures market, you may get the following return, that is, buying one hand and selling the other.

The advantage that trading requires less margin. For example, the cotton market in Chicago generally fell from the end of 1983 to the beginning of 1987. On the contrary, the wheat market is generally rising, which provides a series of credible and straightforward signals to technology traders or system traders.

For example, in June 1986, you got a sell signal in the cotton market and entered an empty position. The deposit required for a contract of 5000 bushels of cotton is $400. Then, you get a buy-in signal and buy the contract in the wheat market in June of the same year at 5438+ 10. The deposit for each wheat contract is $750. In this way, the sum of the short position of brocade and the long position of wheat is 1 150 USD. Would you be surprised if you don't need to pay a deposit of l 150 USD? You don't even need to deposit $750 (the higher of these two legs), but you just need to pay a total margin of $500 for this whole two-way position. If I don't agree to such a small margin transaction, I'd rather put at least 750 at the request of the highest party (wheat)

Dollar, this figure still has a very high degree of compatibility. Know how to calculate this position and calculate the high profit brought by high compatibility in your mind. This profit was earned by taking advantage of the price difference between cotton and wheat during this period. You don't have to be a genius to make this profit, you just need to look for opportunities to buy strong and sell weak.

On the other hand, the strategy of buying strongly and selling weakly is a tendency. Many futures bull markets have experienced a phenomenon called price reversal, which is also called retrograde market. In this market, the price of short-term contracts is higher than that of long-term commodity futures of the same contract. Finally, it is sold at a premium in the longer-term market. This is due to the shortage of spot (recent) supply or a precursor to shortage. Traders should carefully observe the differences between these spreads, because recently and

The reversal of the normal relationship between forward (closing) markets can help you confirm that this is a bull market. In fact, in this case of price reversal, I usually increase any long position by 25% to 50%.

On the other hand, the spread (especially in the currency and futures markets) is a tendency for some traders to buy with one hand and sell with the other to avoid bearing losses. For example, your May silver futures long contract suffered huge losses because of the falling market price. Some traders did not sell the May silver contract and bear the loss, but sold the July silver contract, which actually locked the loss at this point. This is not a good idea. Because this method has no chain to prevent losses. Just to delay the realization of the loss. After releasing one leg of this spread strategy, you still have to deal with the lost position. A more appropriate strategy is to bear the loss, close the position initially and objectively reveal the trading indicators to you.

Re-establish long or short positions after inputting signals.

In short, it doesn't matter what this basic trading strategy is called: holding a favorable position and ending a loss position; Or buy strong and sell weak. It is important that you clearly understand this strategy, determine the advantages and disadvantages, and use this strategy in a sustained and well-trained way.