Statement:
This article is for reference only and does not constitute operational advice. You are responsible for your own risks; the stock market is risky, so you should be cautious when investing.
If you want to learn more trading skills, can follow the author’s WeChat official account: Li Linglong (k63078), market hot spots, market analysis, trading strategies and daily limit copying tactics and other profit models, with continuous dry goods.
In the speculative market, some people make money in the short term, and their inner world is weak and uneasy, their eyes are confused, and they lack confidence in the future. However, some people even if they do not do well in the stage, their thinking is clear, their goals are clear, their speaking is low-key, their eyes are calm, their hearts are calm, and they are confident about the future. The difference in vision and realm determines everyone's different trading life.
There is no 100% perfect system in the world. After the system signal appears, you can basically get started by making big money and losing small money. The trading path must withstand temptation and endure hardships, which is a necessary condition for success.
"Know Yourself" is a famous article engraved on ancient Greek pillars, and it is also a famous trading quote engraved in the heart of every trader.
01
Character determines what kind of trading strategy you are suitable for
Trading system is a tool for traders. Having a trading system is a necessary condition for the futures market to make continuous and stable profits, but it is not a sufficient condition.
This shows that having a good trading system is a good start to achieve investment success, but whether it can be successful in the end must be the cooperation of the trader, i.e. the trader.
The most difficult thing in the trading process is the human mentality. There is a saying that goes, "Personality determines destiny", while in trading, personality determines the choice of trading tools and the ultimate success or failure of trading.
02
Short-term trading and Trend trading
Short-term traders are not suitable for trading with the trend system. Short-term traders need to carefully monitor the market and understand the clues. Their energy must be highly concentrated in trading and cannot be affected at all.
, and for trend traders , there is no need to stare at the market, not be disturbed by the ripples on the market, and even carefully looking at the market has become a taboo for trend traders.
, a completely different method, comes from the trading personalities of two different traders. Different personalities determine different concerns, different trading methods and different trading tools.
short-term trading system emphasizes the success rate of the system, that is, the number of profits required to be significantly greater than the number of losses. The investment philosophy it pursues is "small profits and more turnover, and accumulates and becomes more";
trend trading system pays more attention to small losses and big wins, and uses continuous stop loss as cost and cost to exchange for large trend profits. Trend traders are not sensitive to success rate. Some trend trading systems make profits even less than the number of losses, but ultimately they are profit systems, which fully demonstrates that the investment philosophy pursued by the trend system is "high profits and low sales, small losses and big wins."
There is no distinction between right and wrong in the two trading methods of short-term trading and trend trading. The key is whether it can be suitable for the trader's personality. Therefore, short-term traders choose short-term trading systems as their trading tools, and mid-term traders choose trend trading systems as their trading tools, which is a good match between traders and trading systems.
Of course, experienced traders will find the best combination point between short-term systems and trend systems. That is: when the market is in the "coin holding and waiting area", trend traders can either stop trading or use short-term systems to assist in trading.
03
Key points of clear trading system
1. Risk control principle (stop loss principle)
According to the basic idea, any trading behavior must be set! The setting of stop loss point includes the following elements:
Loss stop loss point setting elements:
a. There is a loss the next day after a purchase, and the stop loss ratio cannot exceed 2%. (Add to transaction fees, about 3%) This is the bottom line. The following elements are invalid if the first item is violated. Exit beyond the condition, even if there is a callback or other situation.
b. One stop loss point cannot be set, at least two must be set, one is the bottom line and the other is the support point. However, the support point cannot exceed the bottom line.
c. If the support point is the following important price points, such as: yesterday's closing price (jump situation), yesterday's lowest price, integer price, support/pressure line price, and a certain support price actually existed in the market. Then you can set it as a stop loss point.
Profit stop loss point setting elements:
a. Within 6% of the profit, as long as it falls below 1%, it will be eliminated. The worst thing is that it cannot fall below the buying price. This is the first principle.
b. After every 6% profit breakout occurs, the existence of this profit must be strictly guaranteed! On this basis, the profit is allowed to continue to develop. That is to say, within each 6% space, it is allowed to float freely, but once it exceeds 6%, it is fixed as a stop loss point, and the pullback is not allowed to fall below this price. This is the second principle.
c. In each 6% space, the stop loss point can also be set according to the actual situation, usually based on the pressure point, and the principle is consistent with the support point settings. This is the third principle.
Finally, any stop loss triggers the basic principle (i.e., the bottom line), no matter what the situation is, the stop loss should be immediately eliminated!
In addition, the parameter adjustment of the stop loss should be adjusted after evaluation after monthly trading, and do not remain fixed. The general principle is to relax risks when the market is good, and strengthen risks when the market is bad.
2. Buying principle
The basic principle of buying is: First, always buy stocks when rising. Second, try not to buy stocks that have already increased significantly in the bear market, or make the bottom in the bear market. The setting of the buying point of
needs to increase the probability of success of the forecast for the rise on the second day after buying. This probability must be scientifically evaluated. The goal is to achieve a 50% success rate in at least one inning. And the predicted probability of a 6% increase in one game reaching at least a 25% success rate. The basic steps for buying
are as follows:
a. The steps for buying are mainly: strategic considerations and tactical considerations.
b. From a strategic perspective, we should fully understand the macroeconomic situation, relevant policy aspects and general market views. Distinguish between cyclical industries and non-cyclical industries, and do not try to catch hot spots in a bear market. The stocks you insist on buying must be stocks with a coefficient of a greater than 1 and have certain resistance to declines.
c. Before buying, analyze it in the order of important judgment and analysis, and write down the specific score after each analysis point. Finally, the probability is calculated cumulatively. 11 judgment conditions can be selected. If the probability is small, you should not invest more than half of the position of funds at one time.
3. Conditions for buying:
1. Is the country's macroeconomic situation good? Is the inflation situation serious? What is the RMB exchange rate? What is the country's policy on the macroeconomic? Is it a tightening or an expansion policy?
2. Does the country have adverse policies on the stock market, or have relevant plans or rumors?
3. What is the situation of the market (generally referring to the Shanghai Stock Exchange Composite Index)? This is the highest principle among the 11 conditions. It is generally not allowed to buy when the market is in a downturn, or when the market situation is unclear.
4. Whether the selection of individual stocks belongs to an industry with a greater impact on national policies? Recent policies indicate whether to control or expand? How affected by the economic cycle is the industry?
5. There is no adverse news on the fundamentals of individual stocks, and the historical situation is good. It has the continuity of business. The performance is good, and the price-to-earnings ratio is lower than that of the industry.
6. There is no sudden rise and fall in individual stocks, and the trend is obvious. Compared with the market, when the market rose in the same period, the increase was also relatively large, but when it fell, it was resistant to declines. The stock cannot exceed 300 million shares in circulation. Moreover, the circulating shareholders cannot control more than 10%. Generally, large-cap stocks are not considered when the amount of funds is small.
7. From the perspective of price trend, you cannot buy stocks that are in a downward situation. The buying point should be set at certain key positions.
4. Selling judgment conditions:
1. When the market is in a bull market, the risk control range should be appropriately amplified and the profit control range should be expanded. When in a bear market or when the situation is unclear, risks should be strictly controlled and profit expectations should be reduced. This is the first principle.
2. When selling, the scope of basic profit should be guaranteed first, and on this basis, the room for profit growth should be expanded. That is: Under normal circumstances, all efforts should be made to protect a certain proportion of expected profits first. Once this range is reached, a callback is not allowed to break through this range. After ensuring basic profit, the room for profit can be relaxed and expanded. In the current bear market, the space for basic profits should be narrowed. Currently set at 6%. The expansion profit margin is set to 6%. These two parameters should be adjusted monthly.
3. After the selling space is determined, the profit stop loss point should be more flexible. However, tomorrow's stop loss points need to be evaluated and set every day. Selling operations without setting a stop loss point is not allowed.
04
What do you have is a real "trading system" or a formal "trading system"?
-. In the trading circle, you often hear similar feelings: "I don't have my own trading system so far", or "I have a great trading system, but I can't control myself, I just can't abide by discipline and stick to it consistently." If you can't make money, lose money, or even dare not make transactions, all the misfortunes in the transaction seem to be attributed to "not having your own trading system" and "not being able to stick to your own trading system." Correspondingly, finding an effective trading system and sticking to this system seems to solve all problems. Really?
2, In fact, as long as you observe people's trading behavior truthfully, you will find a completely opposite fact: in fact, every trader has his own trading system; every trader is surprisingly stubbornly sticking to his own trading system; and, this trading system is not "searched", but has been rooted in the "body" of every trader from the beginning.
isn't it? For example, for a person who is "buckled" in a transaction, his "buckled" is usually "habitual". The scenes can be different, but the result is always "being trapped". More importantly, the psychological mechanism that leads to his "dressing" and the psychological feelings brought about by "dressing" are always the same. Other mistakes, such as: missing opportunities - watching the trading product go away in the direction he expected, but can't pull the trigger; excessive trading - taking too much risk or trading frequency is too high, etc. The same is true. Once a trader makes a certain mistake, he tends to make it again and again. There seems to be a "compulsive" repetitive behavior pattern here - the same plot and the same psychological feelings, which reappear repeatedly and accurately. It seemed as if there was a kind of power in the dark, leading this person to jump into the "same" trap.
3, For this, the description of "Memoirs of Stock Hands" is very vivid:
"…"When you associate certain mistakes with failures, you won't desire a second time,... But, I will tell you some strange things: stock speculators sometimes know that they are making mistakes but still make mistakes. After making a mistake, he will ask himself why he made a mistake. After the pain of punishment is over, he will think calmly for a long time. He may know how he made a mistake and when he will make a mistake in that specific link in the transaction, but he does not know why he made a mistake. ...Of course, if a person is both smart and lucky, he will not make the same mistake twice. But he would make "original mistakes" any of tens of thousands of "brothers" or "cousin". Error This family members are huge, so when you want to know what stupid things you might do, there is always a mistake next to you.
——Excerpt from "Memoirs of Stock Hands" Chapter 10
4. The so-called "the original error has tens of thousands of brothers or cousins" is essentially a mistake, but the external form is slightly different.
If you use the system trading standards to evaluate this kind of thing, you can say:
1. Every trader who makes mistakes has his own trading system. Although the trader himself did not realize it, let alone express it clearly, this trading system must be extremely clear, otherwise it would be impossible to "copy" the results repeatedly and accurately.
2. In terms of trading system execution, these traders are very disciplined and consistent - insist on being trapped, insist on missing opportunities, insist on overtrading...
3. This trading system does not come from "design". It does not have to be troublesome to "find", but it is naturally rooted in the "body" of traders.
These three points are exactly the characteristics of system trading and are what every system trader dreams of!
Therefore, it is better to call this trading system a "real" trading system, but people are not used to this statement. Correspondingly, is a "formal" trading system, or a "designed" trading system.
is like the alchemist who was exploring recipes, generations of traders are constantly looking for an "effective" trading system, hoping to improve trading performance. This kind of "treasure hunt" work was made using paper and pen a hundred years ago, but now it is done using computers. The equipment is even better, but the nature is not different - they are all designed "formal trading systems".
05
And the real trading system should include three parts: market analysis, capital management, and trading strategy. These three should be an organic combination of wholes and are indispensable. Many investors do not know how to manage funds and adopt strategies because they do not have a complete trading system. They only focus on buying and selling points. Even if the success rate of this buying and selling signal is high, they will still be unable to get rid of the loss.
(A) Market Analysis and Determination
It serves trading strategies and fund management. Putting aside this, any market analysis and determination has no goals, no standards can be set, and no practical significance. The author emphasizes market analysis and judgment. The analysis and judgment include predictions, but not only predictions before building a position, but also tracking and judgments after building a position. The author even believes that this is more important than predictions before building a position. Three questions need to be answered for
market analysis:
1. Under what circumstances should I enter the market to trade?
answer must be clear and clear, either an exact price or a clear range. Generally speaking, no matter what analysis method the investor adopts, the types of entry signals can be roughly divided into two types:
1) follow-up trading type. The initial entry signal chosen by this type of investors is a breakthrough in range or high and low points. Mantra: Follow the trend.
2) Counter-trend trading type, the main entry signal of this type of investors is the turning point at the end of the market, or the calculated target point.
catchphrase: buy low and sell high. These are two completely different analytical and judgment ideas. You can use either one, but it is best not to switch ideas back and forth in transactions!
2. Under what circumstances should I leave?
exit contains three meanings:
1) exit is because the market development and changes do not meet the investor's holding standards;
2) exit is for stop loss and stop profit;
3) exit should be proactive. The market analysis and judgment of
must be answered clearly and clearly. Compared with the first question, this question is easy to be ignored, and because of this, this question is more important. Under what circumstances the entry is determined by what circumstances the exit can be determined.
3. Can we provide a unique, clear and executable basis for fund management?
(B) Fund Management
The significance of fund management:
1. It is to survive in the market and survive for long enough. To survive, we must limit our losses to small amounts. This "small" is a relative concept. Although everyone understands it differently, it should be our absolute pursuit in the trading process, because we cannot expect several consecutive losses, and we can only control that every loss is a small amount.
2. Profit is the ultimate pursuit of trading. Only by making profits can you make up for stop loss and finally make profits. To apply the words of an investment master: limit losses to small amounts and let profits run. It is this requirement that determines the third question that needs to be answered in market analysis: the market analysis must be able to calculate the profit and loss ratio, otherwise it means that the market analysis and judgment are flawed.
needs to be emphasized that since we don’t know how many consecutive losses we will lose, we must actively hold once the position you hold starts to make a profit. This contains two meanings:
1. We cannot know whether we have achieved the largest profit at the moment. Only when profits begin to draw down can we know which position is the largest profit point, even an investor who is good at calculating the scale. Because some market changes will cross the time level, such as the daily market evolved into the weekly market, so there is profit. As long as our position standards are still there, we might as well hold more firmly and must not "run away when we see profits" without principles.
2. Many markets will recur in the early stage of development, some will directly reversal in the early stage of the market, and some may choose to go downward after repeated fluctuations. These signals need to be reviewed in the future market to see the trend at that time. This uncertainty has caused many difficulties in our actual operation. Therefore, in this uncertain initial trend, controlling funds may be a compromise and helpless move, and it is also the only reasonable response.
In short, "know to stop and then gain", "do what you can within your ability". Fund management is not overstated no matter how you emphasize it. The author believes that this is the most important core link in becoming a qualified investor, but it is often ignored by ordinary investors.
Fund management is the most personalized aspect of all trading links, reflecting all aspects of investors' own personality. There is no distinction between good and bad, and it is applicable to beauty. Let’s briefly talk about the general idea of building a fund management module: set a clear quota for the maximum margin loss you can bear, and combine the length of the investment cycle, and use the total loss quota as the most valuable "resource" to reasonably allocate. Doing this is not only an emphasis on quantifying the loss quota to improve execution, but more importantly, it strengthens a concept: no matter how much more funds are managed properly, they will lose a day!
With the quantification of the above quota, it is easy for investors to clarify the "loss resources" that can be used in each transaction or in each time period. Many people compare all investment margins to "bullets". I think it is more appropriate to compare your loss amount to "bullets". If the bullet is fired, it cannot be collected. However, in order to obtain "prey", we must fire "bullets". Once the loss amount is used up, we should stop trading.
market analysis module and fund management module can calculate a reasonable and clear loss amount, which helps improve execution.
(C) Trading Strategy
This is the most flexible link and the most effective link. In this link, many investors overlooked one problem: the sense of rhythm of the market. formulates an appropriate trading strategy to accurately grasp the rhythm of the market. If the rhythm is not good, you may lose money if the index rises. Different people operate the same stock, the ending may be huge. If others make money, you may lose money. The trading strategy needs to solve the following three problems:
1. Time to enter. After determining the time level of your trading, how should you view your entry signal? For example: For a trader at the daily level, if an investor is making a breakthrough during the entire trading day, when he encounters a gap in the opening and breaking through the key price, should he enter the market or not? If the orders entering the market are retreated to within the key point during the session, should the orders entering the market leave? To avoid these problems, traders at the daily level should enter the market based on the signal at the close and filter out the intraday signals. Doing this may miss some profit margins, but it can avoid unnecessary stop-loss actions caused by intraday fluctuations and seek benefits and avoid harm. As a futures investor, you should put harm avoidance first. Here is just an example, not that doing so is the only or the best way. Investors should have a clear standard for their trading entry time so that they can be implemented.
2. How to deal with market emergencies. This is a very important issue. For emergencies, we must have positive response measures, regardless of whether the emergencies are unfavorable or beneficial.Many investors believe that although emergencies will cause abnormal fluctuations in the market and can accelerate a wave of trend or slow down a wave of trend, most of them cannot change the trend of the market. Since it is a "breaking", there is no way to predict it, so I simply don't consider it. Obviously this view is a bit negative. The government has been actively calling on all walks of life to establish a "warning mechanism", and futures investors should also establish a "warning mechanism" to ensure the smooth implementation of trading strategies to the greatest extent. Otherwise, the rhythm will be disrupted by emergencies, blindly entering the market or passively leaving the market.
3. Add and reduce positions and smooth your mentality. I have never believed that any investors can face the ups and downs of the market and the profits and losses of the funds, and can truly be as calm as water. It is said that the two major weaknesses of human nature are greed and fear. The author believes that overcoming weaknesses should start by respecting weaknesses. Weaknesses are inherent and will work at all times and we cannot get rid of them. However, we can formulate a clear trading strategy to smooth or offset the test of profit and loss fluctuations on human weaknesses by adding or reducing positions.
approximate principles for adding and decreasing positions: only reduce positions in loss positions, not increase positions; increase positions in profit positions must be carried out in accordance with the calculated ratio set in advance. It should be noted that this is just a rough principle, not the only standard.
trading system is a whole, each module is an organic combination, not a simple superposition, and a good trading system will not highlight a certain module, but will be established through consideration and synchronously. This is very similar to the idea of "middle" and "harmony" emphasized in traditional Chinese medicine theory. Traditional Chinese medicine believes that as long as people achieve "middle" and "harmony", they will not get sick. Every detail of a good trading system is holographic and can reflect all the information of the entire system's goals, principles, skills, etc.
06
Every outstanding trader is destined to be lonely.
His trading system is a comprehensive reflection of his understanding of trading and market, and his own understanding. It also reflects his ideas, beliefs, and personality. This is not something that others can learn and understand.
I'll try it. Write as much as you can, and help others and help yourself.
people are limited by their own cognition.
Babies start from toddlers and then run. We will start to outline the construction of the
trading system from a blank paper.
popularizes some basic common sense:
1. Formal financial markets: domestically, retail investors can access only two securities markets, Shanghai and Shenzhen, four futures markets, Dalian, Zhengzhou and Shanghai (2), and the Shanghai Gold Exchange. Other spot, foreign exchange and other things are illegal.
International, Hong Kong HKEX, US CME, London LME, South Korea KSE, Singapore SGX. . .
If it were not in a formal trading market, even the principal could not be guaranteed to be safe, and there would be no way to deal for a living.
2. Good tools bring about an improvement in success rate: In terms of futures, institutional users try to use wind as much as possible. Wande has a large amount of data and research reports from various securities companies and futures companies, which are very useful for in-depth market analysis. The funds flow reports I provide to customers every day are extracted from them.
Retail investors, commonly used Wenhua, alternate game master.
securities, if it comes with Hong Kong, then Futu , a subsidiary of Tencent , is a good choice.
3. Information source and channel: WeChat has become a better source at present. The public accounts are following China Grain and Oil, Van Deyibiao, CME Group, Futures Daily, Zhan Hao, Poker Investor, Fu Peng 's global macro strategy hedging, bloody drink, NEO, Midland Federal Reserve, and pie will not fall from the sky.
Poker investors have detailed reports on each variety, which can also be used as a learning object to study carefully, but the real-time information is not as good as it can be.
The China Futures Association and the Securities Association themselves have training schools. Although it is boring, it is orthodox. It is worth it if you can pay less tuition in the market. It would be better if you test yourself.
4. Books to learn: try to learn as much as possible. In the financial market, the more you learn, the more you have, the more advantages you have than others, and can be directly converted into money, which also reflects fairness.
The broader the vision and the longer the vision, the more opportunities there will be in this world. And books are the ladder for us to climb high and look far.
Reading books written by successful people is an experience, such as the most important thing in Charlie’s Book, a dream for ten years, and investing.
and professional books. The fewer people who learn big things mean that you have fewer competitors and the greater the dividends.
For example, the options market in China, which is just starting now, contains excessive profit opportunities.
All process must revolve around the purpose and thus not deviate.
analyzes and considers the technical aspects, fundamentals, and market psychology, discovers market errors from the fundamentals, verify or counter-proof from the technical aspects, judges the price and timing of entry and exit from the market psychology and technical analysis, uses capital management to control risks, enter light positions and small amounts of funds, amplify the stop loss range to avoid market fluctuations, and wait for the market itself to discover errors and correct them.
This is my trading belief. Everyone should have their own unique system, just like there are no two fingerprints in the world.
technology serves for profit, deeply understand the selected indicators, know the reason and why, so that you can be able to be handy.
, but you cannot believe in indicators, because the role of any indicator is a reference, while the market itself will change its characteristics.
Any technology analyzes what has happened, and for the future, it is just a matter of probability.
insists on doing things with high probability for a long time, doing relatively stable trends, reasonable fault tolerance ranges, and giving up the clutter noise within the day in exchange for long-term stable returns.
technical indicators, I have now simplified to only use long-term moving averages and K-line combinations to help judge trends and entry opportunities.
fundamental research cannot be made clear, and don’t be too superstitious about balance tables. The recent hoarding of 6,000 tons of cobalt by Swiss Para Investment and China Chaos Investment is an example.
is enough to combine various analyses and finally get a vague high probability of the correct direction, so there is no need to be demanding.
If you only understand the economy but not politics, you will always be a lame one leg, and you can even see the whole story through the leopard.
. Whether the transaction logic of each transaction is clear and accurate is a very important point.
Why is it more important than what is it done. Why is doing it a strategic issue, and what is done is just a tactical detail.
Only by knowing why you made this transaction can you have the confidence to persevere in the entire market fluctuation process. What was done later and how to continue to do it is a matter of tactical deployment and adjustment.
is in the right direction, and it is not very important to get the price. Is accurate price that important? Compared with direction and timing? If the direction is wrong, you will lose money when you take any price. If the direction is right, you will eventually make a profit if you take any price.
Statement:
This article is for reference only and does not constitute operational advice. You are responsible for your own risks; the stock market is risky, so you should be cautious when investing.
If you want to learn more trading skills, can follow the author’s WeChat official account: Li Linglong (k63078), market hot spots, market analysis, trading strategies and daily limit copying tactics and other profit models, with continuous dry goods.
