In contract trading, it is almost impossible to completely avoid losses, but we can try to make small losses and big profits. The following are some ways I have personally summarized to avoid large losses, hoping to provide some reference for novice friends.
First of all, we need to be wary of going against the trend.
Counter-trend operation is the most common mistake made by novice traders, which usually stems from inaccurate grasp of the position and stop loss, as well as immaturity of mentality. Counter-trend operation often attempts to pick the bottom and touch the top, which is a low winning rate and high profit and loss ratio. However, due to the low winning rate, we must resolutely implement the stop loss strategy, and once the counter-trend operation fails, we must stop the loss in time. But many times, even if we copy the bottom or the top, due to the lack of mentality and technology, many investors will rush to close the position after a small profit, resulting in a low winning rate and low profit and loss ratio in the end. Therefore, we need to stay calm and not violate the original intention of the strategy of picking the bottom and touching the top.
Avoid situations where you have a heavy position but are unclear about the price.
In my opinion, there are only two clear points for heavy position operation: three buys and three sells. These two points are the definite positions of the trend reversal turning points, which are suitable for heavy position operation. However, any technical points in the trend are uncertain and only suitable for light position operation. Because the callback and rebound in the trend are large, if the heavy position operation stops loss, the market is likely to return to the opening point. Therefore, after the trend has been going on for a while, you can follow the trend and control the position at about one-third at ordinary times. In this way, you can seize some opportunities without suffering too much loss due to heavy position stop loss.
What cannot be ignored is the handling fee.
Handling fees are a source of loss that is easily overlooked in contract trading. Taking contract trading as an example, the handling fees for taking orders and supporting orders are different, and taking orders are usually more. Even if one opening and one closing is counted as one supporting and one taking, a certain handling fee is required from opening to closing an order. If operations are frequent or the position is large, the handling fee will become a considerable expense. Therefore, during the trading process, it is necessary to always pay attention to the impact of handling fees and arrange trading strategies and position management reasonably.
In short, in contract trading, we need to always be vigilant against the risk of operating against the trend, taking a large position with the trend but with unclear positions, and handling fees. Through reasonable trading strategies and position management, we can minimize losses and strive for more profit opportunities.
