There are only two core points of trading. One is to trade with the trend; the other is to stop loss if you are wrong and take the order to magnify the profit if you are right. You can take profit when the profit retracement reaches the percentage you set.
1. Core Concept
1. Accuracy: It is the winning rate of placing orders.
2. Profit and loss ratio: the ratio of profit to loss
3. Position profit and loss ratio: When making money, always hold a heavy position, and when losing money, always hold a light position. (This is the most important point. How to achieve this is to never increase your position when you are losing money, and only increase your position when you are making a profit.)
4. Stop loss and exit: Stop loss is to control risk and prevent it from expanding again. There is a principle in Gann theory: cut losses and let profits run. Many investors like to hold orders when they lose money, but find it difficult to hold on when they make money. The result is often less profit and more loss.
5. Take profit and exit: After reaching a certain level, you should choose to take profit and not let the profit be lost.
2. Trading philosophy
1. Position management: Reasonable positions and diversified investments can help you control your emotions well.
2. The three main reasons for losing money: adding to positions when losing money, trading against the trend, and not stopping losses when holding a heavy position.
3. How to control your mentality: Open positions with a light position, increase positions with profit, and exit positions with profit in batches. These three factors are all good for investors. Light positions with loss are harmless to investors. Increase positions with profit, with profit as guarantee, the risk is controllable. Exiting positions with profit in batches can protect profits and maximize profits as much as possible.
3. Trading strategy
1. For medium and long term trading, the trend tracking system is used to track the trend of each product. Only trends above the daily level are followed. The resonance points are found by combining fundamental and technical analysis in order to minimize losses and maximize profits.
2. The medium and short term operations are basically based on the oscillation strategy. For cycles below the 1-hour level, enter and exit quickly. Both entry and exit should be decisive without hesitation.
IV. Some rules and methods for fund risk control
For many traders, they often encounter such situations: after making an order, they either only make a small profit and fail to grasp the big profit later, or the profit turns into a big loss, or they do not sell when the loss is relatively small, and almost blow up their account or suffer a big loss in the end. So how can we avoid these problems as much as possible?
1. About positions
Remember! If you lose 50% of your funds, you will need to double your funds to make back the original amount.
For example, the maximum position within the day is controlled within 50%. For trend positions, it is recommended to enter the market with a position of 20% for the first time. After the profit of the entry funds reaches 10%, you can increase the position in two times. The premise of the third increase must be that the second increase continues to make a profit. The maximum position is 50%. If the position is larger, it will be difficult to control the risk. Funds are your soldiers. You must take good care of them. Otherwise, how can you fight when there is a chance next time?
2. About stop loss
The first type: You can only lose a few percent of your principal at most every day. For example, if you have 1 million in capital, you can only lose 3% a day, and the maximum loss is 30,000 a day. This is the bottom line and must be strictly enforced to ensure that you will not suffer heavy losses when your operations are not smooth or you misjudge the direction, and to ensure the safety of your funds.
The second method: Set the stop loss point according to the percentage of entry funds. The range can be set between 5% and 15% according to activity.
3. About stop profit
Taking profit is the only way to ensure profitability. After the trading product reaches the technical pressure or support point, half of the position will be taken profit actively, and the remaining half of the position will be taken profit according to the profit retracement method.
The bigger the profit, the smaller the drawdown should be.
For example, if the entry capital is 100,000, the profit is 20%, which is 20,000. If the profit retreats to 14,000, the profit will be stopped. If the profit is 30%, it is 30,000. If the profit retreats to 24,000, the profit will be stopped.
