Even large-scale opposing funds need to align with basic supply and demand relations, especially in today’s globalized context. Building a ship in isolation will no longer lead to a successful margin call; otherwise, the brutal reality of spot delivery is right in front of you.
Do you remember the peak confrontations of large opposing funds in 2005 and 2008 in Jinrui Futures? Just the openly exposed pure opposing funds were all above 2 billion, making them the strongest opposing party. The result was two failures, which were extremely tragic.
The facts show that opposing funds that do not align with basic supply and demand or the overall market forces will also suffer a tragic defeat. Therefore, based on this point, whoever aligns with the market is the proactive party, while whoever opposes the market is the passive party.
Another feeling I have is: regardless of whether it’s our side or the opposing side, whether the funds are large or small, and no matter how fierce or slow the methods are, one must follow the trend. Those who follow will thrive, while those who oppose will perish; this has been verified countless times in history.
Even Soros's attack on the pound was based on detailed analysis concluding that the pound's fundamentals would inevitably trend toward depreciation, allowing him to intensify conflicts and burst asset bubbles, which merely aligned with the main trend rather than reversing it.
The market is almost fair to any investor (we all know that achieving absolute fairness in China is difficult). As you mentioned, back in the day when Zhejiang confronted Shanghai, if Shanghai had timely aligned with the trend and accepted losses to exit, the tragedy of a margin call would not have occurred.
Losses are only limited. No one can unilaterally provoke confrontation; both sides are needed for conflict. A war without an opponent will yield no results, no matter what.
As the old saying goes, classic saying: those who follow will thrive, while those who oppose will perish. If you are on the side that aligns with the historical trend, continue to stand firm and appropriately assist the trend. If you are on the opposing side of the trend, quickly recognize your mistake and leave, immediately repositioning yourself to align with the trend.
I often quietly observe the stubborn individuals in the market through my technical means, and the data I summarize shows this characteristic: investors with smaller capital are better able to withstand losses, while those with larger capital are better at holding onto profits. Assume a scenario of 10 trading days, investors with smaller capital only have profits on at most 3 trading days, and the profits are minimal, while those with larger capital have nearly 7 trading days of profits, with a profit-to-loss ratio of 12:1. Here, the size of capital refers to the intersection of investors, not the union. The average daily loss for retail investors is about 1% to 4%. I witness such hunting battles every day and feel deeply enlightened.
I have a deep feeling that before trading, I conducted in-depth research, focusing on historical facts of each variety. Being informed is a rare quality.
Additionally, every trade you make should have a strategy; there should be a corresponding strategy to respond to each situation, which is very rational. This also reflects the comprehensiveness, systematization, and strategic nature of thinking.
My advice from my experience is to reduce the number of varieties you operate on, and do your best to select the varieties you are most familiar with and capable of trading, ideally around three varieties. As the saying goes, one should specialize in their field; you cannot be good at every area, but you can certainly be an expert in a few fields. A strategy allocation for three varieties is sufficient to help you share risks and share profits.
Fix your time zones, fix your volatility, fix your capital allocation, and fix your win-loss ratio. Like an equation, you must first determine the unknown values, know where you want to go, and then think about how to get there.
A relatively fixed range of values can significantly reduce your breakthrough difficulty during the early technical breakthrough, increasing your chances of leaping forward.
It’s not about the number of people; it’s about effectiveness. Large institutions can lose the same amount for making mistakes, while individuals can profit from being right. Behind futures trading is capital, and behind capital is people, whose behaviors are governed by habits.
When it comes to life-and-death struggles, it’s a competition of who has the least human weaknesses. A playful mindset will not lead to victory.
One still needs to take it seriously, conduct objective analysis, and gradually enhance their rationality on the left side to overcome their emotional tendencies on the right side.
To put it bluntly but effectively: it’s about who is more inhumane, who is less human-like, and who has the coldness of machines and the absolute objectivity of data to snatch money from others’ pockets, which requires skill. If you’re just looking to 'play with 100,000 or 80,000', then you are absolutely the target for the rational, experienced players.
1. My personal experience, along with other relatively successful experiences, is: in the exploratory phase, use extremely light positions or simulated capital. The base position is the initial position; you can test trades, and only after profit does it prove that you gradually gain the initiative, allowing you to increase positions. The initial position should not exceed 10%.
2. General principle for stop-loss: the shorter the time, the better; the smaller the range, the better. The more resolute the attitude towards stop-loss, the better. The facts prove that for a correct trade, the time spent in floating profits is far greater than the time spent in floating losses.
Wrong trades often continuously generate losses, while correct trades consistently generate profits. There’s also a detail: particularly proactive trades, high-scoring trades often see profits expand continuously, while ordinary proactive trades often take a long time to gradually open up profit margins.
You need to define levels based on objective facts, and then control positions according to those levels. In short, the more proactive you are, the more aggressive you should be; the more passive you are, the more you should hold back.
The story that has impacted me the most and brought me the greatest benefit is actually a small story. The protagonist of this story is a foreign futures master whose name has blurred. After he fell into adversity and went bankrupt multiple times, he established a basic capital management rule for himself: regardless of the methods and strategies used, if he loses $500 in a day, he must leave the market and go home to rest. I felt deeply about this in the initial 1-2 years.
It is precisely the education from this story that has prevented me from experiencing significant losses in the most challenging years. Surviving is the only way to possibly thrive. I hope we always remember this story and this saying. Let’s encourage each other.
The essence of trading is: cut losses when wrong, hold on when right, small losses, large gains, and make big profits and losses. Specifically for each core link:
1. Follow the trend: Find a simple moving average to distinguish between long and short; only go long above it and only go short below it.
2. Test positions: Follow the trend, align with the larger trend while countering the smaller trend. When entering a position, consider a sufficiently large risk-reward ratio; if you enter at this position and are wrong, the stop loss should be small, but if you are right, the profit can be significant. Generally, this is at the trend bottom or the early stage of a trend.
3. Test position stop-loss: If a key point is breached, a stop-loss must be executed, with no room for luck. If the price comes back, you can find an opportunity to enter again. Don’t have a lucky mindset thinking that resisting might bring it back; you must not average down your losses.
4. Add positions in the trend: add positions when floating profits arise. Increasing positions is the key to making big money; after the price rises as expected and then pulls back, add positions at the support level or when breaking previous highs—align with the larger trend while countering the smaller trend.
5. Set stop-loss for trend positions: for newly added trend positions, move the stop-loss to the new key point. The base position is already safe; only the added position's stop-loss risk remains. If it fails, stop-loss for the added position and wait for the next opportunity. If it continues to rise, hold firmly and wait to add positions on the next pullback, continuing to move the stop-loss. Until the last movement is stopped out or a top signal for taking profit appears.
6. Take profit: Never easily take profits at any time; this is the key to making big money. Exiting can be done in batches or all at once, preferably all at once, as it allows you to wait for the highest probability top signals. If it’s a right-side trade, floating profits will definitely retract, and you must accept this in your mind. Don’t think about selling at the highest point, or feel like you’ve lost if you didn’t sell at the highest point and have to wait for it to return to that point. As long as you can master and adhere to these principles in practice, maintaining discipline and consistency, you will find that making money is a natural outcome.
These days, I am preparing for the launch of a divine order!!!
Comment 168 on board!!!
The impermanent brings the impermanent, brings the impermanent!!!
Important things should be said three times!!!