To be honest, futures trading, don't believe those flashy things.
To say something from the heart, when I first started trading futures, I would stare at the charts every day, listening to those analysts talk about 'head and shoulders patterns must drop' and 'buy quickly when a golden cross appears'. Looking back now, those things have no credibility even down to the punctuation!
Trading is just like Brother Wang downstairs selling vegetables. Brother Wang never believes the buyers when they say 'I’ll take everything if it’s cheaper'. He just focuses on the cost price and market price to calculate profits. If you think it’s too expensive and don’t buy, there are plenty of people who will.
Trading futures is the same; figure out your stop loss and take profit points clearly, and hitting the key levels is better than anything else.
A while ago, crude oil was hovering between 70 and 75. A "master" told me, "This wave will definitely break 76, so hurry up and buy." I ignored him at all.
I just keep an eye on the support level of 72. If it breaks, I will go short. If it doesn’t, I will wait.
As a result, within three days, crude oil price plummeted to 68, and I made 400 points from this short position alone.
Do you think the so-called "support and resistance" are important?
When the market doesn't follow the routine, it's all nonsense!
My neighbor Xiao Li is even funnier. He made 20% profit last year by taking advantage of the volatile coal market and boasted everywhere that he was a "conservative". However, this year the coal market opened directly at a lower price, and he stubbornly held on to his long orders, and lost 50% in less than half a month.
This is just like those people who proclaim themselves to be "stock gods" after making some money. It's all due to the luck given by the market. If they encounter a counter-trend, their true colors will be exposed immediately.
When I first entered the market, I suffered countless losses from false breakouts. Take rebar, for example. I saw it had broken through 4,000 points, so I rushed to buy. However, the market pulled back as soon as I entered. As soon as I cut my stop loss, the market went up again.
Later I realized that this was the market testing you. Just like when you go to buy clothes, the boss will first quote a high price, and then slowly lower the price when he sees that you are hesitant. It's actually all a routine.
Remember, any signal on the market is a bait to make you place an order.
It will make you afraid of missing out, and you can't help but enter the market even though you are not sure;
It will make you greedy, and you will want to make more after making a little profit, but end up giving back the profit;
It will also make you feel lucky, and you always think that the money will go back up after a loss, but in the end you will lose more and more.
This is just like those who sell health supplements. They specifically target the things you care about and don't care about the effects.
I now have one principle when doing transactions:
Stay firm in your strategy, no matter how the market fluctuates.
Just like the breakfast stall downstairs from me, no matter how many people there are, it opens at a fixed time every day and sells buns at a fixed price, but its business is getting better and better.
The same applies to futures trading. Don’t be confused by false signals. The most important thing is to find your own rhythm.
Finally, let me tell you the truth, profits in the market are like squeezing toothpaste. As long as you find the right method, you can always squeeze it out by squeezing it slowly.
But the prerequisite is that you must first see clearly whether there is real toothpaste in the toothpaste tube or it is just an empty shell!
There is no silent trader who will lose money if he executes the strategy!
In this market, when you have sufficient funds in your account and can withstand the stop-loss, no false breakthroughs or inducements to buy or sell will affect you.
But if you suffer several losses in a row and your position becomes light, all the strange problems in the market will start to appear and you will make mistakes no matter how you operate.
You and I both know that if you don’t trade frequently, you won’t lose money.
The hemp rope of the market always breaks when you have a heavy position and are in a confused state of mind.
This is not accidental, it is inevitable.
The "jackals" in the market are staring at panicked retail investors like you. After all, even veterans who dare to confront the main players are afraid of being bitten back.
What value investing, what trend is king, are of no help to you who are now losing your temper due to losses.
When you make money, all kinds of "teachers" will come to win you over, saying that they will help you catch the big market.
When you can't bear the losses and leave the market, they will turn around and use your loss case as a teaching material to attract the next newbie.
Some so-called "trading ideas" are the least trustworthy.
The market, especially the volatile market, is the most unpredictable!
The highs and lows of a fluctuation are harder to guess than a needle in the sea.
How many retail investors chase the rising and falling prices, get cut into a hornet's nest back and forth, and still think that they are just unlucky!
In the trading industry, the rule is - don’t enter the market without a signal!
No matter how tempting it is, you cannot move the mouse until the opening point you set is reached. If you do, you will be giving away money.
Don’t think that those who make stable profits are so smart. You can also see the K-lines and indicators they look at.
They just exploit human weaknesses—greed and fear—better than you do.
It is not the continuous stop-loss that is cruel. When you clearly see the right direction, but do not enter the market due to hesitation, and watch the market run away, the sentence "I knew it would be like this" is the heaviest blow!
Don't use those clever tricks to make transactions, such as "picking the bottom and selling the top" and "betting on a reversal", which are not acceptable.
How can there be so much luck in the market?
If you want to rely on luck to escape the net, sooner or later you will be swallowed up by the market without leaving a bone!
This is the cruelty of futures. What you think is a "smart operation" will not even give you a chance to correct your mistakes in the face of absolute trends and funds!
"Others laugh at me for being too crazy, I laugh at them for not seeing through me!"
I think I have a clear understanding of the market situation.
Those who can maintain stable profits base their "confidence" on their own trading systems, and their trading systems have always been based on real review and risk control capabilities.
Take the simplest "swing trading" as an example. Don't always think about catching the big market from beginning to end.
First look at the daily line to determine the direction. If the daily line is in an upward trend, wait for the 60-minute line to return to the key support level, such as the previous low or the 20-day moving average.
At this time, look at the trading volume again. If the volume shrinks when the price pulls back, it means that the selling pressure is light, which is a good entry signal.
After entering the market, set the stop loss slightly below the support level. Don't be greedy. Sell half of your profits when they reach the previous high. Use a moving stop loss to keep the rest. Even if the market reverses, you can still keep some profits.
Don’t think this strategy is complicated, the key is execution.
Many people are afraid to enter the market even after seeing the right signal, and cannot hold on to the market after entering. They either run away when they make a little profit, or hold on to the market when they lose money. In the end, they turn a good strategy into a tool to lose capital.
The market will not pity anyone. If you are weak, it will bully you. If you are strong, it will give way to you.
Instead of complaining about the bad market every day, it is better to calm down and polish your trading system and engrave the discipline of stop loss and take profit in your mind.
When you can really do "don't take action until there is a signal, and don't hesitate when the stop loss is reached", you will find that those monsters and demons in the past were actually illusions created when your mentality was unstable.
I remember when I first started trading futures, I lost a lot of money for a period of time. The 30,000 yuan principal in my account was reduced to less than 5,000 yuan.
At that time, I always felt that I had to find a "great god" to guide me, or learn a "magic strategy" in order to turn things around.
I hang out in various trading groups every day, watching others post their profitable orders, listening to so-called "experts" talk about the market, and following their orders, but ended up losing even more.
Until I met an old man who was doing futures trading. After a drink, he said to me: "Don't stare at other people's orders. First figure out how much money you can make and how much you can lose."
Just this one sentence made me stunned for a long time. Looking back on my previous actions, I realized that they were all blind guesses.
I chase when the price goes up and panic when it goes down. I run away when I make 50 yuan and hold on when I lose 200 yuan. I never think about which market conditions are suitable for me, nor do I set a stop loss for each transaction.
The older brother said that he had made rebar in his early years and lost all his savings of 50,000 yuan the first time.
At that time, he was just like me. He bought whatever variety that was rising according to others. As a result, the market reversed. He held on to the idea that "it will definitely rebound" and was finally forced to liquidate his position.
Later he realized that in trading, it is more important to think about "how much should be lost" first and then "how much can be earned" than anything else.
He showed me his trading notes. There was a stop-loss level for every order. Some were set 3 points below the previous low, and some were calculated based on volatility. There was never any ambiguity.
I tried what he said and set a rule for myself first: only follow the trends that I can understand, such as the market where the moving averages converge and then break through.
Before entering each order, draw the stop loss point on the K-line first. When the point is reached, no matter how panicked you are, you must cut it without dragging your feet.
It was also uncomfortable at the beginning. After several stop-loss orders, the market came back and I cursed myself for being stupid.
But Big Brother said: "Stop loss is not a loss, it is an insurance for your account. It doesn't matter if you miss it once. It's better than a margin call."
Gradually, I found that I didn’t lose much money anymore, and I could even make a little money occasionally.
I used to worry about the small fluctuations of the 5-minute K-line and missed a lot of big market trends.
The elder brother also told me: "Don't miss the big picture first, then make small fluctuations."
When he trades crude oil, he always looks at whether the weekly trend is bullish or bearish first, and then uses the daily trend to find an entry point. He never fights with the small 5-minute fluctuations.
I followed his example and switched the screen to weekly and daily charts. I first saw that the general trend of palm oil was upward, and then waited for it to pull back to the support level before entering the market. I made 8,000 yuan that time, which was the first "big money" I made since I started doing futures.
Now that I think about it, there is no such thing as "golden words of enlightenment". It's just that someone has pointed out the most practical truth.
I used to think I had to learn complex indicators and listen to “inside information” in order to make a profit.
Later I realized that the most useful thing in futures trading is to have a solid understanding of "how much to lose" and "grasping the general direction".
There is no need to compare yourself with others, no need to chase the market, figure out your own trading logic, stick to the stop loss, and the money you deserve to earn will come naturally.
I still remember that sentence. It is not a profound theory, but it is more effective than all the "master strategies" - trading is not about who earns more, but who lives longer. First, protect the principal, then talk about profit.
I still remember when I first started trading futures, I was like a person walking in the dark.
Staring at the K-line that fills the screen, the red and green make people dizzy, but they have no idea what those lines are "saying" at all.
When I heard someone in the group shouting "Buy quickly when the moving average forms a golden cross", I followed suit and clicked the mouse; when I saw someone say "Stop loss when it falls below the support level", I closed my position in a panic.
The result is predictable. The price drops after buying and rises after selling. The money in the account leaks out like a pocket with a hole in it.
Until one ordinary afternoon, I was staring at the palm oil market, and just as I was about to press the stop-loss button, my hand suddenly stopped.
Palm oil opened two points lower that day. I was panicking and wanted to cut my losses and leave the market quickly, but I caught a glimpse of the trading volume next to it - it was more than half of the previous day.
At that moment, I seemed to suddenly penetrate the screen: the price was falling, but not much funds were actually being sold. This was not a real fall, but the main force was "scare people".
I gritted my teeth, didn't stop loss, and just stared at the market and waited.
Half an hour later, the price really climbed up slowly, and finally closed with a bullish candlestick with a long lower shadow.
The money I made that day was not much, but it made me more excited than any previous profit - not because I made money, but because I seemed to "understand" the market for the first time.
It’s just like watching magic tricks in the past. I just thought it was magical, but suddenly one day I saw through the magician’s method of hiding the props. That feeling of clarity was more satisfying than winning a small prize.
Since then, my enthusiasm for looking at the market has changed.
Looking at the K-line of soybeans again, we no longer worry about whether a single negative line is "over", but instead look at its distance from the 20-day moving average: as long as the price is still above the moving average, the short-term decline is more like a "breathing" rather than a real reversal.
When looking at crude oil market, people no longer blindly remember the rigid rule that “inventories rise and prices fall”. Instead, they will ask one more question: Inventories have indeed risen, but winter, the peak season for oil consumption, is coming soon. Which of these two has a more real impact?
Once I looked at iron ore, it fell for two consecutive days, and there were voices in the group shouting "enter the market with short orders".
But I noticed that the trading volume on the second day was much less than that on the first day, and the price just fell to the support level that had not been broken several times before.
I didn't follow the trend and short, but instead tried a long order with a small position.
As a result, the next day, iron ore opened higher and slowly rebounded, and I earned 10 points - this is the confidence of "understanding" the details, which is more useful than listening to a hundred "expert suggestions".
I used to think that in order to make money in futures trading, I needed to have some "inside information" and learn some complex quantitative models.
Later I realized that the most useful skill is to understand the basics: Is volume truly moving in sync with price movements? Is the moving average pointing up or down? Is there actually capital defending support levels?
These seemingly simple indicators hide the true temperament of the market, just like when you look at people in life, don’t just listen to what they say, but watch what they do and look at the “details” when they do things.
Now when I trade, I only keep three things on the screen: K-line, trading volume, and 20-day moving average.
I no longer blindly listen to the news in the group, and no longer follow other people's orders. I just focus on these three things, and I am becoming more and more stable.
The "sudden understanding" I had when I first started trading futures was not a miracle caused by a burst of luck. It was the "insight" that was slowly accumulated after spending countless afternoons and suffering countless losses.
In the futures business, no one can make money right away, but as long as you are willing to calm down and slowly "read" the tricks behind the K-lines and indicators, one day, the market will actively "tell" you what to do.
And that day was the turning point from losing money to making money.
In fact, when it comes to futures trading, all you need to turn a loss into a profit is just two sentences and a "unpopular trick".
I still remember that when I first started trading futures, I was just a pure "gambler".
Looking at the K-line is like reading a book written in heaven, but I dare to place orders based on my feelings.
When the stock price goes up, I feel proud and think I am a stock god.
When the market drops, people start cursing, saying the market is deliberately cheating them.
In less than half a year, 70% of the principal was lost.
At that time, I thought it was a joke when I heard people say "stop loss".
“I’ve already stopped my losses, how can I make money?”
What's the result?
Take on one order, from floating loss to margin call.
I deleted the software, smashed my phone, and vowed never to touch it again.
But within three days, he secretly put it back.
It’s not that I’m unwilling to accept it, it’s that I don’t know where I went wrong.
Later I started to learn technology, drawing trend lines and looking at MACD.
I thought I could make money if I understood these.
What's the result?
It is clearly an upward trend, but it falls as soon as you follow it.
It is clearly a downward trend, but short selling will cause a rebound.
The loss is even greater.
It was then that I realized that it was useless to just understand the technology, you need to have a real way to put it into practice.
I was drinking with an old man who also traded stocks and futures. He didn't say anything profound, just a few words and an old-fashioned "unpopular trick":
“Buy on the negative line above the line and sell on the positive line below the line;
Leave at the appointed time, don't waste time.
Add a cross-filter of the 20-day moving average + the 5-day moving average to avoid half the pitfalls. "
I was stunned at the time. This "moving average crossover filter" sounded familiar, but few people around me who were doing business really used it.
They all say it is too “slow” and they can’t grasp the market trends.
Later I tried it and found out that what feels slow is actually fast.
For example, when trading soybean oil, first draw an upward trend line, which is the general direction.
But having a trend line alone is not enough. Several times in the past, I entered the market before the trend was stable, and ended up being washed out by the volatility.
Added another step:
Wait for the 5-day moving average to cross the 20-day moving average from bottom to top (golden cross) to confirm that the short-term trend follows the general direction.
Then wait for the market to return to the trend line and form a negative line, then go long.
The stop loss is set slightly below the trend line and the 20-day moving average as a double insurance.
The first time I did this, soybean oil rose by 300 points. I closed the position when it reached the target price and didn’t get greedy.
The second time I encountered a volatile market, the 5-day moving average did not form a golden cross, so I did not take any action and avoided the pitfall of being swept back and forth.
I gradually discovered that the most deceptive thing about futures is not the market conditions, but the "urgency".
In a hurry to enter the market, in a hurry to make money, in a hurry to prove that you are right.
If you don’t use this filter in the early stage and want to enter when you see the trend line, six out of ten times it will be a false signal.
After that, add the confirmation of "5-day crossing 20-day", although you will miss some newly started market trends, you can avoid most of the traps.
Minimizing losses means making profits. I now believe this to my core.
At that time, someone asked me, can you make money with just these two sentences plus the old-fashioned moving average crossover?
I said yes.
It’s not that this method is so magical, it’s that I finally had the patience to “wait for the signal”.
I used to think that if I “waited” I would miss opportunities, but later I realized that what the market lacks the least is opportunities, but what it lacks are people who can seize them firmly.
Those strategies that seem “fast” and exciting are actually traps;
This "half-beat" filtering may look stupid, but it can help you survive longer in the market.
There’s really no such thing as too much fancy work when it comes to turning a loss into a profit.
The core is three points:
First look at the trend line to determine the direction, then wait for the 5-day line to cross the 20-day line for confirmation, and finally find the online negative line/offline positive line to enter the market, and leave when the time comes.
Sticking to this method is more effective than any mysterious system claiming to have a "90% winning rate" -
The market does not reward intelligence, it only rewards "honest people" who can follow the rules.
Many years later, until now, what I most approve of is the "card point system". It is simple and easy to execute, and has a very high winning rate. So far, I have not seen any other trading strategy that can eliminate it.
I'm Fanfan, a dedicated cryptocurrency expert for years, sharing my valuable and diverse expertise. If money doesn't guide you, who will? Follow Fanfan, and she'll help you unlock the secrets of the cryptocurrency world and demystify the murky crypto market. I hope our encounter will be filled with friendship and reward!