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Abstract:Loss teaches traders the first lesson in the futures market, no kidding. Following is the interpretation of these words.
WikiFX Strategies (3 Mar.) - Loss teaches traders the first lesson in the futures market, no kidding. Following is the interpretation of these words.
1. Identify reasons for loss
Many people who are ignorant about the market start trading without any stop-loss or risk management, thus ending in losses. To identify why you lose is to recognize the risks. Preset affordable loss in your plan, that is, if the market reverses, decide at which price you will close the position and how much you are willing to lose at the time. As long as your fund is preserved, profits in future tradings are possible.
2. Adopt a reasonable win-loss ratio
Your risk-reward ratio should be reasonable. For example: You plan to go liquidation if the market goes against your position and takes you a toll of 30,000 at most. But if the market turns to be a bullish one, a profit of 3,000 at least is acceptable before the price moves to the next resistance or support. Is it a good reason to enter the market? Definitely not. The loss ratio is ten times more than the profit ratio, and you might get more kicks than halfpence.
3. Ignore petty advantages
Never take high risks to gain petty advantages. Instead, make sure your every single profit is large enough to make up for previous losses. The precondition for trading is a profit several times greater than the risk.
4. Wisdom alone is not enough
Your operation is also crucial, such as the analysis on how transaction volume changes with the market trends, the win-loss ratio preset before trading, etc.
5. Never go short around limit up, nor go long around limit down
A price approaching the limit up indicates a powerful bull market. In this case, opening a short position against the trend will blow up your account.
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Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
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