I like to combine my own experience more when I'm teaching to people who are just starting out in the futures market. This way, I always leave a deeper impression. I think there are many books on futures theory, but most of them lack vivid intuition.
I define myself as: a good manipulator. At least from my previous record, this is not only because I can keep the market informed of the profits, but also because I am confident that at least a few waves of the market are doing well.
And I like futures, I like manipulation, I like this purely lucrative, prestigious, double-entry business.
It is a pity that I have never put my experiences and thoughts in order before.
Although I've been struggling for years in the futures market, it's very touching. I can summarize something in writing, but at the same time I feel overwhelmed, I don't know where to start. I remember that people often take the initiative and discuss some questions with me, and I always respond enthusiastically, never to return. I'm always very impressed with this situation, and years later I still remember it as if it were yesterday.
I don't want any of my statements to be classics; nor do I want my statements to be seen as the product of strictly logical thinking; I just want it to be a distinctive personality that will make a strong impression on you and at some point inspire you to think or spark your desire to discuss. Based on this consideration, the following text naturally includes content that is uncouthly imprinted with a distinctive personal stamp.
In the following, I'll briefly summarize some of the questions I can think of based on my memories.
This is not a joke I usually say, although when I say it, people always laugh like they heard the jokes of the voice actors. I will talk about the real meaning of this phrase in several ways below.
Money is lost, obviously.
At the beginning, people who enter the market are not prepared enough to understand, and many people are rarely confused and lose money, or do not understand. I saw first-hand that in 1994, during the American coffee storm, some customers held a full-fledged empty order in their hands, and the broker shouted, "Hold it for me!"
How did I get hold of it? Very quickly, a few minutes later, I was kicked out of the futures market. Is this a misunderstanding? This client does not know how to stop losses, and does not know how to quickly admit defeat. Not knowing how to control risk, is it a misunderstanding to lose money?
What is the matter with him?
It's like taking a huge risk and then losing money according to your plan, according to your thoughts, according to your expectations. This sounds bad, but it's not a joke. I don't want you to actively seek to lose money, not to lose money with the goal.
The goal, of course, is to make money, I mean that each time we should have a specific plan: what price to enter and how much to lose if the market goes wrong. It is wise to admit that we have lost a battle. But it does not mean that we have lost the whole war.
What I mean is that you should understand in advance what the impact of losing the money will be on your overall operations, whether it will have a significant impact, and what strategic tactical adjustments will be needed.
It's a reasonable loss.
In the market, not every losing hand is a bad one, nor every winning hand is a good one. The key to a good manipulator is to lose reasonably, and to win is regulated.
What's the point of being justified?
First of all, the risk-to-profit ratio should be reasonable, is the question of how much risk to take to ask for more money. For example: if the market goes backwards, be prepared to accept a 30,000 yuan exit. If you go right, can you earn 3,000 yuan before reaching the next resistance and support, is this a good reason to enter the market?
You are a big player, you won nine times in a row, but you didn't lose once. But how sure are you of winning consecutively? Operating with this mindset, you have already won before entering the market. If you adjust the ratio of profit to risk, don't you think it makes more sense to lose?
Secondly, you should set the exit price after an effective support and resistance point, that is, you should identify a exit gate to give yourself a credible reason to leave. The gate is a lot of space for fierce price competition, where we can verify the trend of the big picture at a very small cost. At these fierce gates, the futures market often plays the classic drama with small bets.
Thirdly, if it's a rushed uptrend and a sharp downtrend, you're going to have to follow suit, and neither of those conditions have any reference value.
The small volume follows the continuation of the trend in the expected direction and then gradually increases, thinking first of all about controlling the risk.
The momentum reverses or stagnates slightly, leaving the field with a decisive loss. Remember, we are all brave because we can decisively control the risk.
(Some say it should be bold, others say it should be stable. Actually, it is global stability, local stability, overall stability, individual stability. Both are indispensable.)
Theoretically, the unilateral bull market is a great opportunity to make money and profit, but people have become accustomed to the up and down of the market, but then they are shaken by this seemingly irrational market. For example, in the case of the unilateral bull market, think that the price is too high, sooner or later it will fall?
Besides, in a unilateral situation, if you try to convince people to do more with the market, it's extremely difficult. Then until now, I always stressed not to do the opposite. Why? First of all, we often hang on our lips the phrase "doing the unilateral, the irreversible, the irreversible" but who really understands this phrase?
If this is not a reverse market, then what is a reverse market?
Secondly, you may think that the bullish or bearish market is already weak, and you may want to do a counter-market listing. The so-called bullish end of the bullish end cannot be used by the reckless one either. That said, this is theoretically true. But in the practical operation, you use a reckless end of the bullish end to hit a strong bow and arrow.
Of course, nothing is absolute, and if you do see an extremely effective historical resistance level, it is neither logical nor reasonable to try to do nothing, but stop losses should be fixed. Only firm stop loss discipline is absolutely necessary in the futures market.
With small bidding being the essence of futures, we are in the futures market in principle always trying to make huge profits at a very small cost.
1) The minimum cost of each transaction should be well anticipated and strictly implemented as the market develops.
The result of such strict discipline is that we never lose a lot of money. Every time things go wrong, we can plan ahead and control the cost. If we don't take the initiative to plan ahead and control the situation, then the only thing left is passive acceptance, which is regret after the incident.
2) Never lose a lot of money is not only expressed in the firm execution of each transaction, but should be implemented in the overall idea of the operation.
For example, when developing an overall profit plan, the total risk should be a small fraction of the total amount of money. I generally limit it to 20%. Then consider how to make the most of that 20% of expendable leaded gas canisters to win.
If the principle of not losing a lot of money is firmly enforced, then half of the game is done with small bets, that is, with small tricks. If not, you can only play with big bets or even with small bets. Like war, first protect yourself before you can effectively destroy your enemies. Protect yourself is not not not to make sacrifices, but to reduce the sacrifice to the minimum, or to expand the ratio of victory to cost to the maximum.
1 In the case of a continuous error of judgment, or a lack of accuracy in our judgment, the less we lose each time we fail, the longer we survive in the market, and the more chances we have of coming back from the dead.
2 In the case of a right-to-left bias, if each loss is less than the gain, then we must have a surplus in our account. We are on the winning side. And the smaller the average loss, the more the average gain. The higher the ratio of the gain to the loss, the more the gain.
3 In the case of judging more than one wrong, if each loss is less than the gain, then we must have won the big one with a full pot.
Normally, I would spend less than one-third of the total amount on each trade, i.e. I would often have more than two-thirds of the total amount available on the account. But I don't think these can be called dormant funds, as they are equally important to my futures trading.
First: This part of the money is also in my overall thinking. For example, if in one round of trading I buy a 30,000 long-term contract on an account with a total amount of 100,000, then in general, based on the same overall thinking, on an account with a total amount of 200,000, I will buy a 60,000 long-term contract. The remaining 70,000 and 140,000 funds on the previous two accounts respectively are also included in my overall thinking. They are also participants in the whole.
Secondly, they are still the main forces of the battle and the large forces, the reserve of strength for which we wait patiently for the battlefield. A good general will definitely not put the main forces in a state of exhausted and desperate desperation. On the contrary, he will leave more time in a state of rest and waiting to play a decisive role in the battlefield. The larger the troops that fight, the more the generals who prepare.
Third: I always use these funds in a few key transactions to get my account close to full or even 100% full. Without the use of these funds, I cannot win big. My goal of doubling the total amount of funds is not only to increase the total amount of funds, but also to need their willingness to help each other in the crucial market battle.
A friend of mine once told me excitedly that he had won nine bets in a row. I asked him how much he had won. He said almost 10%. I told him: "You win 1% each time, but how much risk do you take?"
As a friend, I went on to say: in the futures market, it does not matter how many times you win, it does not matter how much money you make, it does not matter how much you risk to win, it does not matter how many times you lose. On the contrary, you should risk to win Italy, you should make each win enough to make up for many losses, each time you must be able to see the profit several times the risk to enter the market.
My friends don't like it.
A few days later, a wave of reversals forced him out of the game. I don't know if he left with some insight. I didn't say anything else: he did it simply because he didn't have the confidence to win Italy in the big moment.
Doing this alone will naturally create a sneak prey idea, thus completely abandoning strategic macro thinking, overall thinking. In fact, it is easier to make your profitable singles in the market more than the loss singles, because even the ones that are strongly opposed often have the opportunity to profit in the shocks (if the profit singles are more than the loss singles are your pursuit).
Even if you win several times in a row, it's not as difficult as sitting down in a row in Mahjong. But one thing we shouldn't overlook is that the payout ratio in Mahjong is roughly 1:1. So the final payout is closely related to the number of cards you have, and the number of payouts is the deciding factor.
The futures market provides us with a place where we can win more than at a poker table. As long as we control the profit and loss ratio as we wish, we can make money when the number of wins is less than the number of losses.
Unfortunately, many of us, like the protagonist of a black comedy novel, reverse this ratio, leaving us bloodless when the number of wins outweighs the number of losses. So if you leave all the cards at the end to a farmer who knows nothing about futures, maybe he will say, "Why are you so stingy and so generous every time you make money?"
Of course, I can often pick up a small amount of money in my hand, but that is by no means subjective intention, but because of a change in the understanding of the market or because of a reversal of the trend. In fact, each of us will often make a small amount of money, whether we like it or not.
The ultimate goal of small bets is to make a lot of money in the market, and taking a quick profit is not only against the principle of gambling, but also does not reduce your risk in any way. Although for each time the risk disappears with this settlement, you immediately dive into another risk. If the trend goes wrong, can the upside be compensated?
If the monkey honks his life and forgets to enter the hive just to eat a feast, is he still an admirable hero?
In general, I think that the winning goal should be set at 100% of the total amount of the guarantee and the withdrawal of the capital.
So we should treat every strangulation as a decisive battle, or one that could develop into a decisive battle at any time. The goal is to achieve a global victory or to lay the foundation for a global victory. And of course, defeat includes minimizing losses so that they do not affect the whole world, let alone a one-time total military defeat.
Of course, we cannot wait stubbornly for the market to develop towards our goals, but when we win, we should not always be grass-fed, as if a white bird to a wallet for fear of losing control. Every time profits are not cheap to white-pick, we pay the price of risk, the risk of being injured by a tiger. With this knowledge, it is even better to win the maximum profit with our patience and wisdom, even if security is already guaranteed (there is a certain surplus).
Of course, this is not an absolute, this is just my more personal way of thinking. The first thing I see is the pervasive risk of the futures market. In fact, you don't leave the market even if the 200% gain is temporary.
1) the capital can be withdrawn and restored to its initial investment status
In this case, the capital is no longer at risk, but only the profit part is strangled, which is already a great victory.
2) I always set a goal in advance to win 100% of the client's profit and then I leave it at that.
The risks in the futures market are limitless, your profits can only be expressed in the moment, today, not later, tomorrow, despite the fact that you are constantly profitable, the momentum is excellent.
So I always set a profit target in advance and settle it with the client, and here are two reasons:
(1) I think it's better to set a profit target than a time target.
(2) Not everyone can stay in good shape forever.
At this point, the sport is a whole-hearted industry, your psychological condition is not only cyclical but also fluctuates with emotions. Under the situation of great profits, the mentality is easily changed, no one can be exempt, and the mentality of the broker is precious in calm and peaceful. So, after reaching a certain profit goal, timely adjustment of the mentality is also extremely necessary.
I'm talking about the 80 percent profit target for each wave.
Some have asked why not 100%?
Of course, everyone wants to do things more perfectly, buy at the lowest price and sell at the highest.
But what is the highest and lowest point? We cannot know until the market is over, and during the process of opening the market we can only estimate something is the highest and lowest, the coincidence may be right, this chance is more than a few percent. If we leave the market according to this possible chance, we do not know how often it will cost us to miss the big market.
If I count from the highest point in a big bullish market, the market reverses 20% and profits out of the market. It seems to theoretically less profits 20% ((only theoretically) but how much of the market to come out of a strong will have a decent feedback?
In a bull run, although new highs are constantly appearing, we cannot judge which is the highest; but when we call back, we can count on whether the last high has been called back to 20% or whether it is time for us to leave the field, which is exactly what we can see that can be operated.
So why choose 20% instead of 10% or 30%?
This is not an absolute, it's just a matter of experience. However, when choosing a ratio, two things should be considered:
(1) The market is always volatile, do not be intimidated by the slightest shock and run away from the opportunity to make a lot of money. To do this, you must be prepared to give up a few percentage points.
(2) to ensure that most of the profits are not wasted; to do this, the proportion obviously cannot be too large.
Of course, you have to pay attention, with the increase in the high points, the price of the call-off is constantly increasing, when the call-off is closely monitored, the ratio and momentum of the call-off, so that you can do better and more reasonable.
I mean, it's not a mystery that the futures market is profitable either. Because there are only two ways to go up or down, a single down might be 50 percent.
If you play a single hand every day and win three days in a row, it's not too difficult. It's not more difficult than playing three slots in a row, but you can't do it every time, just have a little luck.
In my experience, there are always more adaptation problems for newcomers to the market. It is difficult and expensive to stay in the market for a month without muscle cramps.
In such a tightly-choked market, if you can still make a profit for three months in a row, it's extraordinary. I'm sure you must have some extraordinary uniqueness. Maybe it's sharp intuition, accurate judgment, maybe a more rational allocation of funds. In short, you're not a little confused or instinctively competing with the market, you must have some thinking, some rational wisdom.
In the meantime, I'm going to try to make it a little easier for you.
These manipulative methods include: the law of the change in the volume of the change in the market, the law of the change in the volume of the change in the change in the market, the law of the profit and loss ratio for each wave of the market, the law of the distribution of funds according to a certain ratio. Because these tests not only our wisdom, but also our firm confidence, strict discipline in strictly implementing the rational conclusions of these wisdom crystals. That is why I call it the method.
If you are still winning after more than a year, then you certainly have a desirable manipulation technique with rigorous discipline, flexibility and rational manipulation techniques to support you at all times. Because each of us has a limited, unlimited wisdom. And this limited wisdom is also influenced by our physiological state, psychological state, biological cycle and other variables. We cannot be like machines, like markets that always work efficiently, without always exposing our weaknesses.
But we can use our rationality to create for ourselves effective methods and rules to be used in the market that will make us make fewer mistakes and show more rationality in the market. I can't guarantee that your rationality will definitely make you money, but if you kill a year in the market, you will still be profitable. Then I can guarantee that you already have a reasonable operating method and a fairly strict market discipline, don't be proud, continue to improve, it is possible.
Kant has said that we know only the appearance of the world, only the phenomenal world. And as the essence of things, the animal itself, we do not know. What I am interested in is that he makes us seriously and calmly aware of the limitations of human knowledge.
For example, do we really know what factors ultimately determine the rise or fall of each market? Is it the market supply or the arbitrary manipulation of the market? Is the market supply determined by several factors? Is there another unknown factor?
Because too many big trends are determined by small events, even if we have supernormal logical thinking, even if we have rational thinking, even if we are as intelligent as Einstein, are we going to be able to analyze and recognize these random events and the big trends that are determined by these random events?
The answer is obviously no. Based on this understanding, we should not be like the Genghis in the drama, always 100% confident in our judgement (the real Genghis is more mediocre in the drama than the real Genghis) and stubbornly do not prepare second-hand.
It is necessary to clarify that there are many prayers that we do not understand; but why do we do most of them?
First, we have 70% certainty that we can consider doing it. Because if we do it ten times and win seven times, we win in probability.
Secondly, if the ratio of profit and loss is more than 3:1, it is also possible. Because three times against one is not a loss. Of course, it is preferable to have both. We should also try to find such opportunities to increase the chances of winning.
Third, it is possible to follow the trend, for example, if you go against the immediate exit observation. This is also in line with the principle of a reasonable arrangement of the risk-benefit ratio.
More people are constantly asking me how I see the current wave of the market, and very few people ask me how I am prepared for this wave of the market, two thoughts separately. A simple judgment of right and wrong is not necessarily the final decision of the winner. This is what I say about the above situation. First of all, if the winner is determined only by the falling judgment, then the winner of the hand-to-hand bet with the coin is already about 50%.
Obviously, there are other factors that influence the outcome of the futures market. For example, the determination of how to judge the treatment of the error, the increase or decrease in the volume of each entry in the market.
If the price of the day is close to the stop bar, it indicates that the bullishness is strong. Is it not a reverse market? Even if the bullishness is down in the long run, it is not advisable to reverse the short, if the bullishness also falls, then you are a double reverse market operation.
The most important thing is that there is always a danger of being caught off guard near the stop sign!
In contrast, the same holds true for the area around the crash pad.
Even if you have a good reason to go down, you can also do a blank order or do it again the next day, otherwise you are risking not being able to avoid being pulled back to the stopboard. Then your stop loss strategy, your idea of small talk, instantly becomes a joke on paper!
So, what do you do when you're sitting on a bench and you're sitting on a bench and you're sitting on a bench?
It's like provoking the enemy within effective range of the enemy's guns!
As for some people doing nothing on the dashboard and doing too much on the dashboard, that's the most super stupid thing in the futures market!
What does a stop sign mean? Take the analogy of a spot market where all the goods sold that day have been bought out, and behind them is a line of endless shopping dragons. They just have to wait until tomorrow at a higher price to try. And when you take out the only stock in your house and sell it at the price that no one wants to sell for the day, you really don't know if you are out of good charity or if your brain is in the water.
And the drop-off point means that no one is willing to buy at the lowest price allowed in the market on that day, and the sellers in the mountainous sea want to sell at a lower price only as prescribed until tomorrow. People think of this price as garbage but still can not be thrown away, but you are biased against the market at the price that no one wants to buy.
Of course, there are also examples of buying on the falling table by chance, and the market reverses the next day to make money. But what percentage of this can be? Is it worth following our example?
I have mentioned before that the most profitable singles are not necessarily the best singles, this is the best reverse teaching material? This is the most odorous singles on the market, hidden behind a huge deadly danger.
If you are a customer, and you are lucky, this is the first one that the broker makes for you (the second one, I fear you will be kicked out of the market) then I advise you: change immediately and get rid of him.
I said, but don't take this lightly, listen to me from the beginning:
My first contact with futures was in 1993. One of the first books I bought, a set of five, gave me my earliest knowledge of futures. It was a very ordinary book about the basics of futures, but there was a story in the book that left a deep impression on me.
But it was only two years later that I really understood the mystery.
In fact, anyone can be a magician if they do it right.
What kind of method?
Firstly, Mr. Magic does not have to enter the game immediately after the coin, but first find an effective support and resistance level, and after the single does enter, as long as it goes backwards one position, it immediately stops the loss of the field. If done correctly, release the profit, so that each win can at least compensate for more than two losses.
Secondly, it is also possible to increase the overall winning odds by slightly varying the weight of each holding.
Thirdly, this is to avoid interference from outside; to basically stabilize the transaction rate at 50% is a step up from those who are chasing the drop of the transaction below 50%.
Our judgments are always influenced by our own physiology and psychology. When we are in good shape, we can do better, when we are in bad shape, we are actually less accurate than the coin. Recall some of the singles that we just made, and often someone is upset because his singles are far less than 50%.
Fourth, the most important thing is that doing the single is not the most important, the method of dealing with the single is the key to the victory. I think that the magician must be good at dealing with the single, skilled and bold, so that outsiders can look at the arbitrary attitude to enter the market.
In fact, he understands the meaning of futures more deeply than those who mock him.
The futures market is so unique that in my opinion only football and war have some similarities.
Tell me what war is like!
First of all, futures are the world's most violent battleground for money, and every time, like war, there are fierce snipers.
Secondly, every new challenge is a new beginning, and your previous good results won't help you at all. You have to make the most of the new challenge, and your past failures don't mean you can't win this time.
Third, the victory of the entire war is made up of countless battles, big and small. We can win the war, but we can never win all the battles, and even some battles we have to give up ourselves.
Fourth, the truly decisive battle may be one or two, and even if the two fail to produce victory, it will lead to a stubborn fight that will lead to the defeat of the entire army.
How about football?
Miracles can happen at any time, and catastrophes can happen at any time. For each specific occasion, the stronger team can also fail, and the weaker team can also win.
Failure is inevitable, and the last king only wins or loses or wins the crucial match.
Just as we can tell more about a person's personality from the mistakes they make, can we tell more about a person's level from the loser's score?
First of all, the first meaning of futures is to control the risk, and from the loss of money we can see how his risk is controlled. Is it gambler-like, is it stable, calm, or is it a puzzle passion?
Secondly, from the single, you can see which part of the market he lost in which round, is it a market worth a shot? Is it a boom or a downtrend? Is it proactively and decisively halting the loss, is it passive funds that have no support, or is it a sharp downturn in the market center that collapses and quickly retreats?
Translated from the Zen Library