1. Contracts are essentially just a tool.
Before I started engaging with contracts, I heard various opinions; some thought contracts were like a flood beast, while others viewed them as a machine for making wealthy people.
But in reality, it is merely a tool; the key is how to use it. Typically, large funds use it for asset hedging, that is, for protection, yet many people treat it as a path to sudden wealth (I initially had this thought too).
This is a zero-sum market; if someone profits, someone must lose. Coupled with the trading platform's cut and potential market manipulation by large players, retail investors are in a difficult position; saying contracts are like a meat grinder is not an exaggeration.
If you want to survive in this field, you must master the survival rules; only the fittest can survive.
2. When opening a position, be sure to set a stop loss (please repeat it three times in your mind).
The range of stop losses can be between 1 to 100 points, and it should be determined based on the holding ratio.
3. The so-called 'ever-profitable method.'
Set stop losses at the original price, first use one-tenth of the position for a trial position; if the trend judgment is correct, continue to add positions, then take profits during the pullback.
It sounds beautiful, but reality is very cruel. First of all, judging trends is extremely difficult; the market primarily moves in a choppy manner, and the opportunities to catch a one-sided market are very few.
Secondly, even if the judgment is correct, continuing to add positions will raise the original opening price, and once a slight pullback occurs, it may trigger the original stop loss; the transaction fees from frequent operations can also be astonishingly high.
Although making a correct trade can multiply your capital several times or even hundreds or thousands of times, doing so in the long run simply means working for the trading platform, and there is no sustainability unless you earn a sum and leave immediately.
4. Newcomers often do not like to set stop losses.
I have also gone through this stage; once the emotion of loss aversion is magnified, it can make people crazy to place orders, thereby infinitely amplifying risks. Once the capital chain is broken, you can only watch helplessly as you get liquidated, and often this happens before you even realize it. Initially, you only wanted to earn one-tenth of the profit, but ended up losing all your capital.
5. There are methods to earn forever in contracts, but they definitely cannot be mastered by newcomers just entering this field.
Many people participate in contract trading to earn big money with small funds, and to make big money, there are only two paths: one is to win by position, that is, heavy positions; the other is to win by amplitude, such as in the big drop market like 312, 519, or in the big rise market like going from 10K to 60K.
If you want to seize such amplitude movements, any analysis may be useless; there is only one method: do not take profits.
The most skillful way to take profit is not to take profit, but this is extremely counterintuitive; 100 times or even 90 times could be losses or break-even situations, and I also cannot do it.
With a small position, even if the amplitude is large, you can't make big money; with a large position, a small amplitude is also useless, and it is even easier to get liquidated.
All those who make big money are masters at balancing positions and amplitudes.
6. The market is ever-changing, just like the situation of soldiers is never constant, and water has no fixed form.
The market always develops in the direction of least resistance; betting on trends and guessing sizes are essentially the same, and no matter how much technical analysis you learn, it may still be useless.
Knowing how to read K-lines and some basic things is basically enough.
Technical analysis is actually not difficult; just remember this sentence: if the trend is upward, it will continue to rise; if the trend is downward, it will continue to fall; if it has risen a lot but pulled back little, it will rise even higher; if it has fallen a lot but only rebounded a little, it will continue to fall.
The larger the cycle, the more effective this rule becomes.
Understanding these also means mastering the core rules of technical analysis.
7. The real way to make big money is definitely in the trend.
Conducting rolling operations in trends is fine, but using small positions back and forth in choppy markets is not a problem, but if you develop this trading habit, it will be very difficult to have hopes of getting rich in this lifetime.
Short-term trading may bring quick money, but losses can also be swift; over time, you may earn less than the transaction fees paid.
If you think you are the chosen one, then go ahead and try, but know that losing money often starts from winning money.
8. The timing of entering the market is very important; many operations that lead to losses are caused by the fear of missing out.
When there is no position, during the decline, wait for a rebound before opening a short position; remember not to chase the decline; the same goes for rising, wait for a pullback before entering, don’t chase the rise.
Doing this might cause you to miss some strong trending markets, but most of the time, it will be safer.
However, many people only see profits and not risks, and in the end, they blame others for letting them miss out.
9. Do not be afraid.
Many people have lost so much in the futures market that they are afraid to open positions again, becoming hesitant and indecisive when they trade again.
Losses can lead to an overly strong purpose in doing things, a desperate desire for results, constantly thinking about making profits, wanting to avoid losses, and always wanting to do it right; this mindset is impossible to be profitable.
The ancients said, 'Do not rejoice at gains, nor grieve at losses.' In the trading field, this can be understood as: do not be happy for profits, nor sad for losses.
When your heart is calm enough, you will achieve something. Approach opening positions with the enthusiasm and passion you had on your first day trading futures; do not fear the wolf behind you or the tiger in front of you; if you are wrong, stop loss; if you are right, hold on.
Don't rush to get off before the trend reverses, or else you will miss out.
10. Enthusiasm.
No matter what you experience, maintain enthusiasm and passion, holding onto a beautiful longing for life. Be as full of fighting spirit as you were in your first job, and love boldly like you did in your first relationship.
Many things in life are like this, whether in career or love, there may not necessarily be a result, and the probability is that there will be no result.
But if you don't work hard and don't put in effort, then the outcome will certainly be nothing. Just focus on doing what you should do and don’t worry too much about the results.
11. Many people are constantly thinking about opening positions, even operating at full positions; for them, being in cash is more uncomfortable than losing money.
In fact, the duration of trending markets is often very short; controlling drawdowns is the most important. How to control drawdowns? Staying in cash is the best method.
Don’t always think about capturing every market movement; catching one or two opportunities in a year is enough. Missing out is a normal occurrence, so there’s no need to regret it.
As long as you are still in this market and live long enough, there will be plenty of opportunities in the future.
Time is the only chip for retail investors, so maintain a calm mindset, patiently wait, and making money is just a secondary matter; enjoying life is fundamental.
12. The mindset and insights of trading.
In trading, the mindset is more important; knowledge is like techniques, while mindset is the inner strength.
Just like Qiao Feng uses the Taizu Long Fist to defeat several Shaolin monks, it's because he has profound internal strength.
Being able to see clearly does not have much use; what matters is what to do after seeing clearly, what to do after seeing wrongly, how to maintain composure in holding positions, how to have a good mindset, how not to be afraid of missing out, and how not to be afraid of drawdowns... If you always hold a mindset of wanting to win and fearing loss, it is very difficult to make money in this market.
Some things newcomers may not grasp immediately, but as long as they spend enough time in this market, they will come to know that these are truths.
Mu Qing only does real trading; the team still has spots available for you to join.
