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How to control spot crude oil positions

The first type: the initial amount of funds entering the market is relatively small, and the position is relatively light when entering the market with about 10%. If the market moves in the opposite direction, the market outlook will gradually increase the position, thereby diluting the cost. The proportion of added positions is getting larger and larger. In this method, the position control is in a shape of small at the bottom and large at the top, much like a funnel. Therefore, it can be called a funnel-shaped position management method. The initial risk of this method is relatively small. Without liquidating the position, the higher the funnel, the more impressive the profit will be. However, if the direction is judged incorrectly, or the trend of the direction cannot exceed the total cost level, you will be in a situation where you cannot make a profit and exit.

Second Type: Rectangular position management method: This method requires investors to enter the market with a fixed proportion of total funds, which is about 20% of the position. If the market moves in the opposite direction, positions will be gradually added in the market outlook, and the proportion of positions added should be determined to a fixed value to reduce costs. The advantage of this method is that the funds and risks are all averaged out, and if the market outlook goes against the grain, considerable returns can be made. The disadvantage is that costs rise quickly, causing the situation to become passive and trapped. Once the direction changes, the position will gradually increase and eventually the position will be liquidated.

The third type: the initial amount of funds entering the market is relatively large. If the market moves in the opposite direction in the future, no more positions will be added. If the direction is the same, the position will be gradually added, and the proportion of added positions will become smaller and smaller. The position control is in the shape of a large one at the bottom and a small one at the top, like a pyramid, so it is called the pyramid-shaped position management method. This method controls the position according to the rate of return. The higher the winning rate, the higher the position will be used. Take advantage of the continuation of the crude oil price trend Increase the position through time. In the trend, you will get high returns and the risk rate is low, but in the volatile market, it is more difficult to get returns. The initial position is heavier, and the requirements for the first entry are relatively high.