There is nothing wrong with speculation, but bad speculation is a disaster.
Whether you can correctly grasp the ups and downs of the market and create long-term wealth is not a question of whether you have enough talent. In essence, this is an essential ability to work in the speculative industry.
Making one or two successful transactions does not mean that anyone can do it at any time. This is not an industry that gets rich by luck. The goal of speculation is to persist in doing the right thing, not to take the side road, not to be depressed by the recent losses, and not to get carried away by winning two transactions in a row. I'm more interested in the art of trading than one or two recent deals. Everyone will hammer a nail or two into the board, but that doesn't mean they will build a house. To build a good house, we should not only have skills and plans, but also have the confidence to carry out the plans and the ability to work every day, whether the weather is good or bad.
What is speculation?
Speculation is an art of discovering possible future trends. It is difficult for you to accurately predict or predict what will happen or how it will happen in the future. However, all investment forecasts involve three elements: the choice, timing and management of forecasts. It is not enough to master only one of the Tao. You must thoroughly understand and be familiar with these three elements, so let's study them one by one.
There are two aspects to the choice: one is to choose the market that is about to start to fluctuate; One is to choose a market where you can concentrate. Don't expect your favorite market to soar just because you trade in a certain market, so your purse will be full. Studying the line chart of stock or commodity futures can reveal an amazing secret and make you and me different from potential speculators. This secret tells us that the pattern of price fluctuation in a certain range usually tends to one side, thus vaguely showing a certain trend. There are only three or four opportunities a year, and the price changes greatly in an instant. You can take advantage of this opportunity to make a profit. If you try to look at the line chart, you will see and understand that there is no major price change every day. In fact, the possibility of a big price change is greater than its possibility? Great changes are exceptions, not exceptions.
That's why it is important. Would you rather fall into the quagmire of variety and disorientation? Will make you exhausted or completely out. But in either case, you have lost it, either money or time. Therefore, it is very important to know when the market conditions for soaring prices are ripe.
In this book, I have provided many considerations about the composition of market conditions, including monthly trading days, weekly trading days, holidays and internal market relations. In addition, there are some net positions and short positions of traders with the largest trading volume (also the smartest), and the inevitable wrong positions of the general investment public will even affect the important news of entering the market. Successful speculators know how to wait for him, but ordinary people can't stand it. They would rather go in and gamble, as soon as possible. At this time, speculators will wait patiently, because they know that only when the key finds the right door lock will it work, that is, there will be profits.
There is another reason why choice is important to profit. When I only trade in one or two markets, I always get the best performance. Excluding all other distracting markets, I can concentrate on studying the operation of the market I choose, which factors will affect them, or, more importantly, which factors will not affect them. If you don't put your skills, enthusiasm and actions into your career, you won't achieve great success, and this industry is no exception. The more you concentrate on your work, the more successful you will be.
This concept is very in line with the situation of this industry. Enthusiastic experts can earn more money than ordinary participants. In today's complex situation, specialization will be fruitful. Many years ago, I heard that a clever man made millions of dollars in the stock market. He lives in the mountains of northern California and calls his broker only three times a year to buy or sell the same stock. His agent told me that this guy really made a lot of money by focusing on this stock.
opportunity
If you focus on a specific commodity futures, and your new tools, technologies and dreams tell you that there is a fluctuation worth trading, but this is not the time to enter the market quickly. Choice is for things that will change; Timing is the second element of speculation, which involves when it will really change. The timing is to narrow the scope to a more certain point when the price has just begun to change. At this time, simple tools such as trend line, price fluctuation breakthrough and form can be used. The importance of timing is to let the market prove it and prepare for the explosive trend in the direction you choose.
What the hell does this mean? In the case of planning to do more, I can say this: the price decline does not mean that there will be an explosive upward trend? . On the contrary, falling prices may bring another wave of decline. This is what Newton's law says? The porter has been moving? Simple facts. Traders are always in conflict. We want to buy. According to traditional logic, you should buy at the lowest possible price, but trend experts say not to buy things that are falling! My advice is, don't buy at the cheapest time, wait until the outbreak trend begins. Even in this case, you may not be able to buy the lowest price, but it is better than a new low price to tie you up.
Control transaction
The third level of speculation is related to how you manage the funds for trading and investment. Traditional theory tells us not to do business that you start at a loss.
Maybe.
But think about it, if your mentality is: If these are toy stocks, I guarantee that you will definitely play and may lose. If these are real money, that is, money you can't afford to lose, you may be more careful and have a greater chance of winning. Necessity is not only the mother of invention, but also the mother of speculation.
Transaction management is more important than financial management, because it is related to how long you want to stay in the trading hall and how much money you want to earn. It is closely related to your mood, that is, you should not get carried away, over-trade, or under-trade. It means doing the right thing in the transaction and controlling your emotions.
Knowing how to trade does not mean knowing how to win money. The art of trading combines selection, entry skills and fund management, which is the basic principle to be achieved. But super traders know better that only management, that is, by controlling or using these skills, can maximize your profits.
Several points of speculative trading
Rich people don't make big bets.
Rich people are usually smart people, and they all know that you can't bet the whole farm. Only frustrated speculators will hold the mentality of getting rich when they come. They will be unfortunate victims, because they may trip and fall into the water in the process. Of course, you can drown once or twice in your life, but if you keep drowning, you will lose in gambling, and because you bet all your property, you will lose everything. That's why rich people don't make big bets.
They are too smart to know that investment decisions may be random, so they won't bet all their possessions on one investment. With their intelligence, they know that the future is unpredictable, so they bet in this way. Many years ago, I was a director of a small bank in Montana. Because of my position, I reviewed many loan applications. The application of an enterprise usually includes a loan use plan, that is, the enterprise proposes how to use the money and how to pay off the loan.
I have never seen a loan use plan that can realize its content. They are bound to go out of shape, and it is conceivable that the real situation of the enterprise does not make people believe that its prospects are as good as those written in the plan. A senior banker put it well: just as certificates of deposit do not bring good news, the plan is never correct. ?
Rich people properly identify one or two good investment opportunities and invest the right amount of money to make money. There's really no need to risk drowning in exchange for the excitement of diving. It's not worth it.
If you want to win a thousand, you must bet a thousand.
This is one of the favorite words of Las Vegas casino owners, and it is also a part of the note for the rich.
Although this is the favorite saying of Las Vegas casino makers, it is absolutely wrong. What is the following? Earn a thousand dollars? The right way.
There is not much difference between gambling and speculation. The biggest difference between the two is that gamblers can never influence the game, and they are always inferior (unless they can count cards). I've always been surprised that we still flock to the gambling table when the opportunity is unfavorable to us.
The reason why Las Vegas is open 24 hours a day is simple. Gamblers don't want to stop. You always want to find a bet that is good for you, especially if you can win a small one. The longer you play, the more sure you will win, so gamblers will not stop. For the casino, the longer you play, the gambler is a trickle of bank deposits every minute. Casinos also have problems with the banker's motto. Bankers should be regarded as the best gamblers. After all, they watch too much. But, to win a thousand, you have to bet a thousand? By experience? Instead, it will make you suffer a catastrophe.
Last year, my daughter started trading at RMB 654.38+00000, and later it was USD 654.38+065.438+00000. I bought a contract of USD 50000 at 654.38+0, and later it was USD 654.38+0000. We never make big bets. Our bet is very small, and we will never let the risk exceed 20% of the bet, but the return is beyond the scope.
If gambling is good for you (this is a necessary condition for speculators to bet), then you should play according to the rules of the money refuge created by Las Vegas, take a little risk and play all day.
? To win 1000, you have to bet 1000? The problem is that you may lose that thousand dollars soon. So why not find a strategy that can earn 1000 yuan with the natural progress of the game, instead of winning 1000 yuan this time and losing 1000 yuan by luck next time? Trading can make a lot of money, and the gambling of trading will not be closed soon, so learn how to make your profit mature with time instead of just throwing a dice.
In my 36 years of market fighting, I have seen more people go bankrupt than get rich. These losers and winners have the opposite style. They are ambitious and want to make a fortune through one or two transactions, while successful people create wealth by constantly doing the right thing. When you want to kill someone happily, the chance of being killed is often greater than the chance of being alive.
Rich people don't make big bets. People who are really rich and smart don't make big bets. First of all, they didn't run out to prove anything, they ran out to make money; Secondly, they know that the two pillars of risk management and speculation-choice and timing are equally important. This is the operation mode of commodity futures trading industry: selection, timing and risk management.
Speculation is only suitable for people who like to ride roller coasters.
You have to trust me. If you don't like the thrill of the roller coaster spinning up and down, put this book down and continue your monotonous life. The life of a speculator is like a double-track pulley. It is a continuous fluctuation, ups and downs, hoping that the lowest point will develop to a high point, but the actual situation is often that it hits a low point and then falls to a low point. Worst of all, so will the highest point.
Although many people are attracted by speculative life because they yearn for excitement, they do not think of the risks of ups and downs, but only think that this is the road to Rolls-Royce cars and a lot of money. This is not the case, but a series of unknown and unconventional cards. In this industry, stimulation can often kill a healthy person slowly.
Although psychologically, you must be a thrill seeker, but you can't let this mentality control your trading style. To tell the truth, if you can't learn to restrain and control your nature of seeking excitement, you will never become a successful speculator. Perhaps this is why it is so difficult to engage in this industry. It will let the thrill seekers speculate, but let the risk-averse people start their careers on the sidelines. If you want to get ahead in this field, you must learn to regulate and restrain yourself. You should know how to protect yourself on the roller coaster, or you will fly off the runway. My advice to those who want to be long-term winners of speculative games is: refrain from seeking excitement.
If you have no patience to wait, there is nothing to wait for.
This is one of the elements that you must learn to control and seek excitement. Stimulators, such as you and me (I count you in, because you haven't put down your book and are still reading it), love the thrill of quick action and enjoy it. Therefore, novice speculators often do not hesitate to buy and sell bets, and then make up their minds and then smash the money, because no matter whether they win or lose, they get the reward-the pleasure of making decisions.
What is the main problem for beginners in futures trading? Overtrading? . When traders disregard market profits for pleasure, what they usually do is to trade too many or too many contracts.
This does involve the issue of intensity: the more contracts you have, the greater the excitement you will experience. The more you buy and sell, the more endorphins are injected into your brain. Yes, too frequent trading or too much contract return will become your sworn enemies. Rich people don't gamble big or every day.
Patience will require you to have sufficient reasons when trading, enough to overwhelm the mentality of pursuing pleasure and go beyond the actions of speculators we imagine in our hearts. In my speculative world, the more frequency and intensity, the better. I must be selective, wait for the best opportunity and make the best attack. This is really not a shotgun industry. We must wait like hunters in the jungle until the prey completely appears and is close at hand. Then (and only then) can we shoot.
Impatient traders will run out of bullets, money and enthusiasm, and when it comes to selling, all the bullets are gone.
If a system or strategy cannot be implemented, what are the benefits of using it?
Some people, such as technical analysts, have been looking forward to developing a trading system that can completely outperform the market. In pursuit of profit, they invested countless time and money. That's a good thing to do. I have been doing it almost every day in my life, hoping to know more about the market.
But the difference is, when they find it? Main system? Then make one or two transactions, and then modify the trading system, or do not follow the advice of the trading system. Many years ago, my old friend Lin? Adrich said it best. If you don't want to implement it, why maintain a system and do all the hard work? ?
Be honest with yourself. If you don't want to follow your own rules, why make them? You should spend your time on other things. For speculation, the rules can't be broken unless you want to end up bankrupt. The existence value of speculative rules is to tell you when the best entry point and exit point are, and more importantly, rules are used to protect us from being hurt by ourselves.
Maybe you don't think this is a problem. Obeying the rules of the system is simple, but it is not.
Last year, nearly 52,000 people died in car accidents in the United States, with an average of 1000 deaths per week, because they all violated one or two simple traffic rules: no speeding, no drunk driving. These are simple rules, not complicated at all, and not as emotional as speculative rules. However, their families will be deeply hurt by not following a very simple set of rules. If you want to choose a legendary speculative career, believe me, your financial performance will face the same fate. It will definitely be a massacre, or it will ruin your speculative career prospects.
Christmas will not come until June 65438+February.
As commodity futures traders or speculators, the real headache for this business is that we never know and will never know whether we will make money this year.
The jewelry store owner knows that he can earn most of the money in a year on holidays or Christmas. This is true for most retailers, who know when money will roll in and can make preparations in advance.
However, there is nothing we can do about it. That's why I wrote this book and published an investment newsletter. I want to have some stable income in my life. After all, they are quite profitable. I may make money for 12 months in a row, or I may not make any money. In fact, I may have been losing money for the first six to seven months of a year, and then I suddenly won the grand prize. In the world of roller coasters, no one knows what will happen in the future.
This is why fund managers who specialize in commodity futures will draw a fixed percentage of commissions from the assets they manage. They usually take at least 20% of the profits, so that they can have a stable income to offset their usual expenses. They are no different from ordinary people, and they all need a fixed source of income.
In my opinion, you shouldn't quit your job to be a trader, no matter how bad your previous job was. Because it is your life guarantee after all, through this job, you can have a stable source of income, thus ensuring that you can enjoy Christmas. Yes, I know you didn't like your old job, but you know what? I don't like my job either. Because it is common practice to repair in the market for two or three months. It is even more unpleasant to make a failed recommendation in the investment newsletter, because everyone will see my mistake, my opponents will exaggerate it and my friends will laugh at me.
But none of this matters. In my world, you don't need to like it, just do it. This means that even if liquidation losses occur, the performance of the contract should follow the principles stipulated by the system. Even if you don't like it, you still have to go out when the price hits the stop loss point, and then tell yourself that Christmas may be late this year. A better budget plan must be made to save enough money for a possibly bad Christmas. With luck, Christmas will come in June or February this year, but I don't expect it to be Christmas every day. Because the road to heaven is not a straight line, my bank deposit will not rise in a straight line, but a bumpy road with frequent peaks and valleys. So I never know when Christmas will come. I only know that if I do the right thing, Santa will eventually find my chimney.
The longer you have an advantage in the game, the better your chances of winning.
If you know that you have some advantages in this game, you will know that at some point you will win the bet, and then Christmas is coming.
This is a very important concept for all speculators. According to this concept, we can build a belief system, but we don't just rely on faith to build this concept. Casinos are run not by faith, but by mathematics. They know the inevitable result of roulette or dice, so they keep roulette spinning. They don't care about waiting and won't stop. Casinos are open 24 hours a day for a reason. The longer you play, the more money they take from your pocket.
I think that's why I always think people who want to make casino money in Las Vegas are ridiculous. Casinos treat you and me as food to fill bank accounts, which can be judged from the big hotels and stock price performance in Las Vegas. They are always in the right column of the account book (note: capital account? Debit? ) increase the amount.
As traders, we should understand that time is our friend. It is essential to indicate time in a legal contract, which may be the case when performing a contract, but time is not the most important factor when doing business. Because, if you have an advantage in a certain game, the longer the time passes, the more sure you will win in the end.
There is another reason why casinos are not installed: gamblers don't want to stop. In our jargon: gamblers over-trade.
Although we are not a casino, we can certainly learn a lot from them. If we want to ensure that our method has a statistical advantage, we must test it to prove that our strategy is effective. You can't think that you will make money just because you are smart or handsome. Once the research proves that this approach is feasible, the remaining problem is to implement a system to support your beliefs.
To pursue victory, don't lose, and fight again and again.
This is the most important principle of speculation. Losers are just the opposite: when they lose, they tend to bet more, but when they win, they will bet less. When losers see someone lose all their money on slot machines, they will rush to grab their place. Winners will look for opportunities to win in succession and seize their own advantages. I clearly remember winning 18 transactions in the S&P 500 index. After winning three transactions in a row, 75% people will not execute the next transaction, and after winning six transactions in a row, no one will continue to do any transactions at all. This shows that people seem to be unable to bear success and prefer failure. Ordinary people are afraid that victory will turn into failure, but they obviously want to turn failure into victory, so they are willing to continue investing or speculating after failure.
But in fact, the so-called success is that a series of transactions can be profitable. You can't stop just because you succeed. Only by pursuing victory will you win the final victory. Failure is a series of trading losses. The most obvious indicator to confirm the failure of a trading system is that its failure record is unprecedented, which is exactly what ordinary speculators want to use. It is undeniable that it is an operational wisdom to use this system that has been proved profitable for a long time after short-term failure, but if it is only because? Too successful? And it's not smart to stop.
My friend, you should pursue victory, not fail and fight again and again.
Success kills wealth, and wealth is dangerous.
Although we must and must pursue victory, we must not let it go to our heads, because wealth will make people overconfident, which will lead us to stop following the law of success.
I have heard countless cases from traders who have followed my operation method and achieved good results. Some people earned $654.38 million+and then spit it back. What happened, the question is the same. After a certain success, these speculators began to gradually confuse whether they used an effective operating system or were too lucky. Therefore, self-awareness tends to override all rules.
They tell them in their self-awareness that they have achieved their goals, have enough money to take risks, no longer need basic rules, and can master and control everything. Is this one of them? Who cares about mines? Full speed ahead Enter mode. The stop loss point is not so important, but because they have established too many trading positions or invested too much in the market, once they accidentally touch the thunder, the explosive power will be amazing, even so big that you have no bones.
How can we save this situation? I always tell myself a simple idea: you should dance with the partner you take to dance, and don't change partners when you see other beautiful systems or trading methods. If you make money, don't change it. Use the same rules or logic. Don't fiddle around. I make money by trading not because of myself, but because I follow some tested and verified systems or methods. We tried to fly solo and inevitably suffered the fate of a plane crash. The more self-righteous you are, or the more you deviate from the rules of speculative operation, the faster and more tragic the crash will be.
Confidence, fear and positivity
Meek people will never become speculators, so they'd better inherit a fortune.
Speculators must learn the three characteristics of self-management, namely, self-confidence, fear and positivity. I will discuss the following in turn: