Short and Medium-term Trading Experience: Methods and Commandments of Wave Trading

If you really want to stay in the market, it's complicated and complicated, and it's simple and simple, because as long as you persevere in the following points, it's hard not to win。

01

First, always only look at the weekly and daily lines, don't look at the cycle below the daily line (do the middle line)；

Second, only use moving averages, trend lines, necklines, false swings, and retracements，Ignore anything else.

Third, the total position should not exceed 50%.，Do not exceed 30% of the single (commodity) position.；

Fourth, try to open a position, make a wrong stop loss, and add a position on the right.。

One more thing to add: it is better to trade in the original direction, and in the end, you will only be caught once, rather than grab a small rebound and be caught again and again。

02

In fact, it is not difficult to find a good opportunity in trading, but it is difficult to make good use of the opportunity。The warehouse is built right, but it cannot hold the warehouse. The reasons are as follows:

One is that the position is too large, and it cannot resist fluctuations, so it has to run away；

Second, there is no advantage in the opening point. As soon as the warehouse is opened, it encounters a rebound and is squeezed out.；

Third, there is no basis for setting position squaring, and every day, emotional running in and out;

Fourth, I can't see the direction, and I take it for granted to go in and out。

03

I suggest you leave only four moving averages on your chart: 300-day, 150-day, 75-day, and 30-day moving averages，Always trade only in the direction of the 30-day and 75-day moving averages。

As long as the direction of the moving average is clear, when the price is close to the 30 and 75-day moving average, the trend line and neckline of each band are broken before the position squaring; the position is always less than 30%; only when the trend line, neckline and moving average are broken and confirmed at the same time, then trade in another direction。

In addition,The warehouse should be built in batches. If it is wrong, escape in time. If it is right, increase the warehouse in increments.Patiently hold the position until the price breaks the trend line and neckline before positioning squaring。Also, don't worry about fundamentals and prices, just trade with the trend。

04

Let me give you a formula. If you understand it, you will definitely make a lot of money.

Investment profit and loss = opportunity success rate × opportunity position rate × position profit and loss rate。

Give an explanation:You always have to ensure that the success rate when you enter the market is greater than 50%, then you must take advantage of the trend + withdraw to build a positionYou must ensure that the position when making money is greater than the position when losing money, then you must make money to increase the position, and you must never increase the position when losing money; you must ensure that the profit margin is greater than the loss margin, then you must ensure that you can stop the loss in time and let the profit run。

05

A few commandments for investing and trading:

Quit irritability: do not move without reasonable conditions for building or positioning squaring;

Number one: Generally, when you can't see the direction -- that is, prices are in a convergent pattern.You should look at the weekly and monthly.Try to build a warehouse along the edge line of the shape in the original direction.。If the pattern breaks through, add to the position; if it breaks through in reverse, backhand。This is more organized and easier to operate.。Try not to operate in both directions, and finally get yourself exhausted. If you really break through, you dare not do it。

Point number two: Never assume that the direction has changed.。In other words, it is better to go in the original direction than to easily turn to trading。Because true reversals are actually rare, accounting for an estimated 20% of the earliest trading opportunities, the rest are homeopathic opportunities。Why should we give up the most likely opportunities and seize the less likely ones?

The third point: a good mindset is not something that comes out of thin air, it must be cultivated。This practice is not about chanting scriptures, but about practicing - constantly cultivating one's senses through trading, by summarizing positive and negative experiences。It takes two or three years.。When your approach becomes your habit and personality, your mindset will naturally improve。If your mindset has not become your habit and personality, and if you are still talking about the importance of mindset, then you can be sure that your mindset is not good。

06

A failed trade is ultimately a failure to respect the market。The details are as follows:

First, do not pay attention to the trend of the market price itself, but what positions they hold, and wishful thinking about where the market will go。When the market goes against itself, it not only fails to correct its mistakes, but also justifies itself with various ridiculous reasons。In fact, the market is always a possibility。Our establishment of a position is only a judgment of the possibility.。

If the judgment is wrong, it is time to leave, not to be stubborn。

I've made a lot of money on sugar。After the price retracement, too many long positions were also established。But when the market told me that the price had entered a volatile state, I was no longer stubborn in long or short positions, but resolutely closed long positions, lost a little money, and turned into a range-short trading idea。And that idea still works today.。

Second, do not pay attention to market trends, but trade in terms of what the main force, the bookmaker, etc。In fact, any behavior of the main force is reflected in the price, so why predict it? Even bring up something about Rogers。

You can think about it, no one's words are absolute truth; even if it is absolute truth, there is a question of how to operate it。Even a pullback in a big bull market can kill people。Still the same sentence: Whether it is the main force or Lao Luo, it has to go through the test of the market。The market moves faster and more realistically than Lao Luo, so why should we stay close to the distance and trust our ears instead of our eyes?

Third, the transaction is wrong, always justified by some long-term trend that has not changed。In fact, since futures are margin trading, the risk and return are magnified tenfold, so even if you see the long-term trend clearly,But if you don't shy away from short-term risks, then a pullback is dead. Why talk about the long-term?This is a bit like a saying in the stock market: short-term becomes long-term, long-term becomes contribution。The stock market can still leave you some money. If you play like that in futures, there will be nothing left.。

Fourth, they don't understand game principles。The essence of futures actually lies in losing small money when losing, winning big money when winning, and maximizing the proportion of profits。

No one, including Lao Luo, can do it right every time。Yes, to expand the fruits of victory; wrong, to run away quickly。But some people think that the person who can do futures must be right every time。My trading success rate is between 60 and 70%, but that doesn't stop me from making money。I was also wrong about sugar.。

It doesn't matter, just change it.。I am afraid that if I am wrong, I will die for face, and if I do not correct it, I will blindly call other breeds.。In fact, this approach can only deceive those who are not beginners. For those with a bit of professional quality, it just adds a little joke。

07

One more thing.Don't judge the market by price movements of a day or two。Some people tend to be silent when the price does not follow his idea. Once the price follows his direction one day, they yell and repeatedly emphasize their accuracy。In fact, the price often has a large reverse movement in a broad downward direction. We should always follow the general direction and intervene in every small rebound, thus occupying the commanding heights。

How can we determine the authenticity and effectiveness of price breakouts?

There are certain rules to follow in identifying false breakthroughs。Although the trajectory of price movement is always erratic and elusive, due to the role of various factors in the market, prices are often able to operate in a relatively clear trend at a specific stage。This makes the theories of trend lines, channels, patterns, etc. have relatively important technical analysis significance in investment operations。

In general, whether it is an upward trend or a downward trend, in a relatively flat operating trend, market opportunities are more difficult to grasp, and in the process of market mutation, more and greater market opportunities are bred。When the trend line is effectively broken down, the market will have a qualitative change, the market began to accelerate, this is a good opportunity to build up the ante，Investors who misjudge the market should also resolutely leave the market and try to operate in the opposite direction。

Objectively speaking, the mid-term opportunities brought about by the trend change and the short-term opportunities brought about by the price retraction trend line (or neckline) are both rare and most practical investment opportunities in the process of market change。

But the market also has its complex side, and it is often full of tricks in the effectiveness of breakthroughs, resulting in a variety of puzzling fraudulent practices。After the upper track of the channel is broken, people expect that the price will accelerate, and when the chasing market flocks in, the price will "fall" and form a long trap; likewise, there are often cases where the price breaks down the lower track of the channel to form a short trap。

08

How can we determine the authenticity and effectiveness of a breakthrough? Technical analysis theory holds that

The first is the closing price principle。That is, generally speaking, a closing price break is more reliable than just a temporary break in the intraday price。Secondly, the percentage principle。It requires the closing price to cross the reference price by 3% (of course, 3% is only in general, and different minimum price fluctuations can be selected for different varieties, but at least a 2% range is required)。

Finally, the principle of time。In order to confirm an effective breakout of the trend line, the market must maintain the closing price on the same side of the line for three consecutive days。Of course, some people think that the futures market only two days。

Although the above principles are reliable, they need to be confirmed for a long time. After the breakthrough is confirmed, the market has often gone a long way, and investors' entry costs are also higher at this time。The practical approach is still to learn to identify some deceptive practices。The author summarizes his personal practical experience as follows:

The first is to deviate from the general trend。In general, when the overall market trend is in the stage of adjustment, rebound or lateral consolidation, individual contracts are more likely to break through the volume of false breakthroughs; and when the general trend is relatively clear, individual contracts are more likely to break through the trend。Investors should make a comprehensive judgment based on fundamentals, historical capital involvement, current price position, and the operating habits of the main force。In particular, beware of downward breakouts in low-priced areas and upward breakouts in high-priced areas。

09

The second is the departure from quantitative energy。From the author's experience, when the price breaks through, the trading volume should increase accordingly in the direction of the market trend, which is an important clue to verify the completion of all price patterns。Any pattern should be accompanied by a significant increase in trading volume upon completion, but at the top of the pattern, early in the reversal process, trading volume is not so important。

Tips:

What is quantity-energy deviation? "Quantity-energy deviation" exactly refers to "volume-price deviation"。

Volume-price divergence is such a trading phenomenon that when a new peak appears in the market price, the trading volume not only does not increase but begins to decrease, that is, the market price and the trading volume are not proportional to the change。This often indicates that the majority of investors do not agree with this price, and selling shorts will appear quickly。

The volume-price deviation further indicates that the current volume-price relationship has changed from the previous volume-price relationship. Generally, the volume-price deviation will produce a new trend, or it may only be an adjustment in the rise or a rebound in the fall。

Once a bear market hits, markets get used to "falling on their own weight"。Investors would certainly like to see more trading activity as prices fall, but that doesn't matter during a decline。However, during a bottom reversal, a corresponding expansion in trading volume is absolutely necessary。If trading volumes do not show a significant increase when prices break upwards, then the reliability of the entire price pattern is questionable。

Again, a departure from the K-line form。Take the upward price breakthrough as an example: when the price breaks through in volume, the medium and large yang lines are often closed, but with the shrinking volume, the price will also stagnate, and the K line also appears in the form of Doji, small yin, and small yang; and when the volume shrinks rapidly, the price will be adjusted accordingly, and the K line appears in the medium yin line。

In this way, there are short-term peak K-line combination forms such as Dusk Star, Tower Top, and Covered Large Yin Line in the K-line form。Investors should combine the theory of spatiotemporal metrics.On the principle of short-term obedience to medium and long-term, small trends to large trends, and small patterns to large patternsIntegrate short-term trends into long-term trend patterns for compound analysis。

10

Finally, it deviates from other analytical tools such as the moving average system。Still taking the price upward break as an example: false breakouts often start to shrink sideways after the price breaks through a new high, causing investors to mistake it for a retraction confirmation after the break, but when the price falls below the 5-day moving average, and then falls below10daily average。

When 5 days and10When the daily moving average forms a dead fork, a false breakout can be confirmed。Investors should combine other technical analysis tools for three-dimensional analysis, paying particular attention to breakthroughs that show signs of reverse movement。Generally, the first breakthrough is mostly false breakthroughs。There are no gaps in the breakthrough process, and the withdrawal trend line is fast and powerful, which are also characteristics of false breakthroughs。