Futures Trading资金管理方法和原则

Methods and Principles of Fund Management in Futures Trading
Investing 8000 into the crypto market, after a huge loss of 8 million due to Futures Trading liquidation, I re-entered the market with 200,000. In two years, I achieved 20 million again. The core wealth secret that enabled my comeback and wealth freedom in the crypto space is: "The methods and principles of fund management in trading." I will share it below, hoping it helps everyone on their trading journey!
Trading is like running a business, and capital management is a crucial factor that can determine survival. Stability is the first element you need to consider. Traditionally, capital management includes issues such as the profit and loss ratio of individual trades, the overall risk level of trading, and the issues of increasing positions and exiting during the trading process. We can summarize it into a few points: 1. Combination: Investment direction 2. Position: How much to invest 3. Timing: When to enter and exit.
Trading is like running a business, and capital management is a key factor that can determine survival. Stability is the first element you need to consider. Traditionally, capital management includes issues such as the profit and loss ratio of individual trades, the overall risk level of trading, and issues related to increasing positions and exiting during the trading process. We can summarize it into a few points:
Combination: Investment Direction
Position: How much to invest
Timing: When to enter and exit
Question 1: Is the lack of success in trading related to the small scale of funds?
Answer: The size of trading capital is not necessarily related to whether you are a successful trader or not. Many people can't even manage a small account well, so why would they think they can manage a large account? Accounts of different sizes require different strategies and methods of operation. Many people fail to manage small accounts mainly because of improper methods.
Large capital accounts: have a stronger ability to resist drawdowns, can set wider stop losses, and once the stop loss is triggered, the losses can be significant; the profit space is larger, and the return cycle is longer; more suitable for trend trading.
Small capital accounts: The ability to withstand drawdowns is relatively weak, and the space for setting stop losses is small, generally close to the current price, so the absolute loss is also relatively small, and the profit cycle is short. Quick returns can provide emotional satisfaction to traders. More suitable for swing trading.
In summary, based on the characteristics of large and small capital accounts, large capital is suitable for major trends, while small capital is suitable for swing trading.
Question 2: Most people have small capital accounts; could you introduce management methods that are more suitable for small capital accounts?
Answer: If you want a small capital account to grow rapidly in a short period of time, you may need to pay attention to the following issues:
1. Survival first. Regardless of the size of the account balance, this is the first principle.
2. Only engage in short-term fluctuations. The biggest drawback of small capital accounts is their very weak ability to resist drawdowns; even a slight larger drawdown can lead to liquidation. Therefore, it is best to only engage in intraday short trades.
3. Regardless of profit or loss, you should limit the number of trades you make each day. It is best not to exceed 3 trades on any trading day. If the first two trades result in losses, it is advisable to stop trading to avoid being influenced by your emotions. Furthermore, you should also take profits in a timely manner; do not continue trading just because you have made profits from all three trades that day.
4. Only trade one variety at a time. For small capital accounts, do not think about diversifying investments; it is unrealistic. Since the account funds are already limited, if you trade multiple varieties at the same time, it will only reduce your risk tolerance, and you may incur greater losses.
5. Be good at seizing big opportunities. Small accounts need to grow their funds, and if you only rely on making small profits every day, it will take a long time, just like the compound interest model mentioned earlier. Therefore, small accounts need to grow quickly, and you must be good at seizing opportunities, capturing a big opportunity every once in a while, and then patiently waiting for the next opportunity to arise. This can also be understood as winning by quality rather than by the number of trades.
6. Increase positions, be bold and careful. I've told you many times before, don't take heavy positions. But if you want to rely on a small amount of money to make huge profits in speculative trading, you still have to dare to take heavy positions. If you want to grow your account with small funds quickly, you have to increase your positions while seizing opportunities. At this time, don't be afraid of heavy positions, and don't equate heavy positions with liquidation. The core reason for most people's liquidation is never because the position is too heavy, but because it is easy to enter the market, frequent stop-loss or even no stop-loss.
Once a student asked me what is the most important thing in investing. I replied with four words - capital management. My answer surprised my students. As a person who studies trends and technical analysis, almost everyone would think I would say the most important thing in investing is to grasp the trend and go with the flow.
For a person to become an excellent investor, capital management is of utmost importance; I call it the lifeblood of investing.
1. The Importance of Capital Management
Many people are looking for secrets to profit in the market, thinking that by accurately judging the market direction, they can consistently win in the market over the long term. In fact, the most important thing for stable profits in the market is capital management.
Warren Buffett believes that safety is the first rule of investing: "The first rule is to preserve capital, the second rule is to preserve capital, and the third rule is to remember the first two."
George Soros said: I long to survive and am unwilling to take catastrophic risks. If we do not understand how to stop losses, we will head towards destruction.
Larry Williams said: Money management is the most important secret in my investment life, there is nothing more important than that.
Many investment masters and trading experts do not have a high success rate, yet they can continuously profit and make money. The reason is that they are better at grasping trends and managing funds. Effective fund management strategies allow investors to earn substantial profits in major trends and market movements without increasing their risks.
It can be said that all successful investors are those who manage their funds well, while those who perform poorly, even to the point of losing everything, ultimately do so because they did not manage their funds properly. Many outstanding individuals have failed due to a lack of attention to fund management.
Although financial trading carries significant risks, it is not impossible to take large or full positions; rather, it is essential to accumulate positions gradually as the market trend continues, all while controlling risk, until reaching a full position. Only in this way can one minimize risks and maximize profits. This is the essence of capital management.
2. The Concept of Capital Management
What is capital management? To put it simply, it means using a reasonable amount of capital investment and strict risk control to minimize the risk of funds, making investments stable and sustainable over time. This is what is called a good capital management model.
Under the excellent fund management model, the pursuit is long-term and stable income, the pursuit of happy investment, easy investment, happy investment, rather than short-term profits, because the pursuit of short-term profits, the corresponding risk is liquidation, as long as you have the idea of profiteering, you will definitely experience liquidation, you will experience fear and even nightmares, because things have both sides of yin and yang, what kind of yang corresponds to what kind of yin, windfall profits correspond to liquidation, a long-term investment model, It corresponds to long-term and stable and safe profits, because the long-term investment method is low-risk. In the high-risk, high-leverage investment field, first ensuring that you can survive for a long time is the real king and the real foundation.
3. Methods of Capital Management
1. Start with a light position and enter the market in batches;
2. Hold positions in the direction of the trend and increase profits;
3. Set a stop-loss level to limit losses;
4. Let profits grow sufficiently while keeping losses to a minimum;
5. Do not increase your position against the trend, buying more as the price drops in an attempt to lower your cost, etc.
4. Characteristics of Great Traders
First, the funds that these people use for investment must not be their life savings, but rather funds that, after losses, do not affect their daily lives. This can be considered the first step in fund management.
Second, when the trend is clear, add positions decisively to amplify profits. However, I must emphasize that the most important aspect of adding positions is the degree; one should add positions moderately and not violate the basic principles of capital management.
Thirdly, do not be greedy. Even when the trend is clear, even when increasing positions, you must fully consider the potential adverse impact on total funds if there is a sudden reversal; this point is very crucial.
The key to effective fund management is to overcome greed. Only by overcoming greed can one better avoid the ubiquitous risks and make rational choices. Operations should follow reason and wisdom, not desires or illusions. When desires burn and imagination flares, wisdom also turns to ashes, leaving no room for rationality.
I have previously guided many students in trading, and many of them started trading at the same time, using the same methods and plans. After a period of time, some still lost money while others made profits; the gap remains significant. The main difference lies in capital management: lighter positions when making money and heavier positions when losing; running fast when making money and running slow when losing, and other similar phenomena. Additionally, I often encounter people who hold onto their positions, refusing to admit mistakes after losses, stubbornly holding on until liquidation or significant losses.
I would like to remind you that when investing, you can't always fantasize about making huge profits, which is the most fatal flaw in the investment process, and it is also a mistake that many people are particularly prone to make. Follow the fantasy, rely on the fantasy, and invest with the fantasy, let's think about it, how terrible it would be for a general who led his troops to fight a war if he always fantasized about being knighted after a brilliant victory.
Therefore, we must stay away from illusions and think calmly. Think about what the competitors are thinking, what the market is thinking, what the big investors are thinking, what the average retail investor is thinking and doing? Whether you are doing industrial investment, doing leveraged currency circles and other investments, you must pay attention to these factors, and think from these aspects, especially to do leveraged foreign exchange, futures and other investments, these are zero-sum games, the money you lose is precisely other people's profits, and your profits are precisely other people's losses, every market participant wants to make money, in this case, you not only have to think about what you should do? You have to think more about what others will do, what kind of choices others will make, and your thinking must be serious, you must be in-depth, after seeing through the other party, after seeing through the market, you will act, so that you can be thoughtful and win.
The basic principles to follow for capital management.
The first principle: control your position.
Always use a light position and never a heavy position, especially in leveraged markets. You must have a scientific position management plan and strictly adhere to this plan.
My fund management method includes volatility, such as the "buying units" and "average volatility" I provided in the morning analysis, where the calculated units take into account the normal volatility range of the variety, strictly operating according to its quantity, and generally there will be no erroneous stop-loss.
The second principle: Manage risk well.
1. Start from opening positions and control risks at the source.
2. Reduce positions or even go to cash before major risk events.
3. Prioritize capital, and if the capital retraces to a certain percentage, liquidate without conditions.
Many people do not truly understand what investment is. What exactly is investment? Investment is actually a game of avoiding traps and searching for treasures. The premise of treasure hunting is to avoid traps; only by effectively avoiding traps can one successfully find treasures. More than 95% of investors fail to grasp this principle, focusing solely on the treasures while ignoring the pitfalls, and thus perish on the road to finding treasures.
Everyone must always remember a principle: the importance of survival is always greater than the importance of profit. In other words, those who can ensure their own safety and greatly enhance their survival capability will ultimately see very considerable returns on their investments.
For those who engage in high-leverage investments, you should at least give yourself 10-20 chances to withstand significant risks, which means having the ability to sustain 10-20 losses without liquidation. Therefore, divide your capital into 10-20 parts, only using one part for investment, while the remaining funds should be allocated entirely to risk preparation capital, that is, risk control funds. Even if you have divided the capital into several parts, you must only enter when the trend is particularly clear and there is a significant market movement.
By integrating this into our investments and dividing the funds into 10-20 parts, it also means that your short-term profit potential may decrease. However, due to the significantly reduced risk, you will have the ability to achieve long-term profitability.
Giving roses to others leaves a lingering fragrance on your hands. Thank you for your likes, follows, and shares! Wishing everyone financial freedom by 2025! Feel free to 【主页看看】 for the latest cryptocurrency news and trading tips.