Why should we analyze the flow of funds? Because the author believes that through traditional technical analysis and fundamental analysis, traders will get a judgment on the market, but this is only their own judgment on the market, not the real direction of the market. Unless we are the main force of God or control the market, we must not manipulate the trend of the market. Therefore, if the market moves in the direction of our judgment, it just happens that the market "gives face" and our analysis is not careful. This is an accident and a case. If the market does not meet our judgment, it is inevitable and universal. On the contrary, we have two choices. Either, we find a "banker" and go undercover to be a "rat warehouse"; Otherwise, we analyze the flow of funds and don't even need to know who is the main force. We just need to know which direction the money is going and follow it.
In the global market, funds usually flow into four "pools"-government bonds, stock markets, commodities and foreign exchange markets. Liquidity has only two purposes-hedging or taking risks. Hedging is to preserve value, while taking risks is to obtain greater profits or even excess profits. So at the beginning of this book, I will talk about how to see whether the funds in the national debt market are safe. If not, then the funds will flow in the remaining three "pools". Then analyze which of these three "pools" funds are currently in. Because "Tracking Capital Flow-Judging the Trend of Gold and Silver Trading" focuses on the trading of precious metals, it takes a lot of space to explain how to judge whether funds have entered the precious metal market. But this method of analyzing capital flow can actually be used to analyze any variety, whether you are trading stocks, foreign exchange or commodities. When you find the capital flow, you can basically work out your general trading direction according to the industry characteristics of specific varieties. The rest is routine technical work, including the allocation of positions, the selection of appropriate entry and exit points, and the risk control scheme. If possible, we may have the opportunity to discuss with you how to find suitable trading opportunities through cross-market and cross-variety.
Trading indicators and programmatic trading
Some readers may have heard the author's lecture on Huitong. The previous com. What we are talking about is how to judge the price trend of precious metals from many angles before trading. We know that the price is formed before all technical indicators, and all technical indicators are lagging behind. And we mainly understand the underlying factors that constitute the price of precious metals by tracking the capital flow-trend judgment of gold and silver trading, that is, what factors led to the price change before the price formed the K line? If you have done some transactions, you will know that basically all technical indicators are lagging behind. For example, the most commonly used indicators such as MA and MA lag behind the price. Because the fastest is the price, there are also many people who work hard on the price, such as through candle drawing technology and graphic analysis. In addition, there are some disk information that reflects the market trend earlier than the price, such as volume. As many people know, price changes need the cooperation of trading volume, especially in the securities market. If quantity is matched, this price trend may be true. For example, investors are familiar with the saying: the volume of goods breaks through or falls, the amount of days is sky-high, and the amount of land is large. But we must understand that the trading volume and price are the same, and the price trend is ultimately the result of the game between long and short sides. So how do you know under what circumstances both sides are playing this game? Where will the final main funds flow? This is the most important problem to be solved in our book, and this is the first aspect.
The second is that besides knowing what the price of precious metals is made of, what its evolution trend may be, it may not guarantee that your transaction will be successful. Because the transaction is a comprehensive transaction result, in addition to analysis, you also need to operate the successful transaction of the real offer, and finally you can get a better result. Therefore, it is far from enough to analyze the formation of precious metal prices. After introducing these methods, in the second half of this book, we want to share more with you how to grasp the whole trading process and how to build a trading system that really suits us. In addition to these methods (so-called "technology"), your trading system needs something unique, no matter what "technology" it is. What is unique is that you closely combine your personality with your trading system, which is your real trading system. I have also seen many trading systems, and the domestic futures industry is very popular now. I know this is also very popular internationally. I have written dozens of trading procedures myself, but I have always been skeptical about programmed trading.
Of course, my personal experience is limited. I just share my feelings. I have tried to quantify my trading ideas and to program trading. Later, in 2009, I went to Hangzhou to attend the first procedural trading forum in China. At that time, there were programmed traders in Beijing, Shanghai and Shenzhen, some people from investment companies and futures companies, Chen Jianling, the "pioneer of trading", and a programmed trader who came back from the United States. One of the organizers is Pan Jin Investment Company of Mr. Hang Guoqiang, and the other is nanhua futures Research Institute. Nanhua is a futures company at the forefront of research. After that meeting, we made some programs, some of which achieved good results, but in the end, we found that no matter how we optimized them, there were always loopholes in the programs. In other words, it will provide us with a good result for a period of time, but after a period of time, or we change the trading varieties, it may not be applicable, which is why many programmers, including traders, and even many old traders, have been repeatedly modifying their own systems. Usually I often communicate with some old traders, who generally have more than 20 years of trading experience. Generally speaking, many of them are still perfecting their trading system. At that time, I was thinking, why do I need to improve my trading system after 20 years? Is the transaction really that complicated?
Or can we find another way and look at the problem from another angle? That is to say, my trading system is flawed, and I accept that there are loopholes. I think I can't find a perfect system, just as we can't have a perfect life ourselves. There is an old saying in China: 36,000 days in a hundred years, you will get sick if you don't worry. Of course, this sentence seems a bit negative, but what do you think about it? How many happy things are there? So if we want to have a perfect trading system, for example, if you want to own a dragon sword, maybe there is. The question is, if this dragon slaying sword is really built, where is the dragon? Can you find this dragon? I think it is more practical for ordinary people to have a kitchen knife than a dragon slayer. Therefore, if we have been looking for a perfect trading system, or a perfect trading index, or a perfect trading method, I think the probability of success will be very low. If we stand on the opposite side of the above ideas from another angle, we will admit that I can't be perfect and I can't find a perfect trading system. I'm not a perfect trader either. I admit that I have all kinds of defects. Maybe this trading world will open another door for us. In fact, irregularity and imperfection are also a kind of beauty, perhaps the most normal beauty. Then let's go and see the market in this state. I think the first thing is that, regardless of the outcome of the transaction, our mentality will be more peaceful and relaxed than in our pursuit of perfection. Then we know that when people relax, they are often in a good state. Perhaps this state is the ideal state of the kind of transaction that we miss so much, but it is realized when we accept imperfections.