Contract is not terrible, terrible is no discipline

Contract is not terrible, terrible is no discipline -- again on the importance of trading standards

BSV is the big star of yesterday, we can't prove the truth of the news, of course, there is no need, because it is a woven story, really lifted the veil is meaningless. Let's discuss the risks of the contract on a case-by-case basis. From a screenshot of everyone in the community, said that some people get rich overnight, do a BSV contract, ten minutes to earn a million, when we envy, and someone screenshot said, the king burst. The argument that followed was that contracts were too dangerous. In fact, in the past year, we have seen and heard too much discussion on this issue. From the insertion of ok pins to the uncorking of bitcoin, the market has never stopped talking about cutting leeks in the contract transaction. And I also once wrote an article, analyzing the logic of unplugging. Without further elaboration, we are not going to discuss the issue of the integrity of the exchange. From a normal point of view, we cannot make the inference of guilt first, otherwise it will be meaningless.  

But put aside the problem of the exchange not to say, only said in the contract trades the bursting position question, whether can avoid. What is the point of a contract deal?  

First of all, in the past month, there has been a lot of discussion in my own community. People have been wondering about my idea of spot hedging. Since I am long, why not make long orders? I don't think it's a problem because it's just financial common sense. When you hold the spot, if the price goes up, you can make a safe profit, if the price goes down, the hedge can avoid the risk. But what if you hold more than one order at a time, the price goes up by a factor of two and the price goes down by a factor of two? Losses. Some people say is not long? Yes, it's right to be long, but the analysis is based on a prediction of market factors, and since there is a prediction error rate, do you think that when your risk is magnified by 10 times or even 100 times, the original 1% error rate, what will happen?  

Second, what is the point of hedging, since long, why hedging? The same logic, based on the probability of the problem, we can not guarantee that long will go up, even if the unilateral market, you may also cause losses, but this hedge is not short, can not be confused.  

Third, why short? We can choose to sell all of our COINS in the downside, but there are a lot of transaction costs and uncertainties. If you don't sell, you're taking a loss, so shorting is the best thing to do. If we control the position, even if the direction is wrong, but spot appreciation, can also hedge some of the loss of the contract. So shorting is the preferred form of commodity trading rather than going long.  

Going back to yesterday's implosion on the BSV, we discuss another issue, the importance of trading discipline.  

One of the questions I want to ask in our planet talk today is why we had a lot of losses in the past month and a lot of gains in April. Again, I'm providing analysis, what's the problem? I just concluded, because they felt at the beginning that my strategy was too conservative, that I was bearish 100 points, and then I went down 300 points, and I looked for a little rally, and then I had a big rally. So your conclusion is, my direction is ok, as long as I look short, let you hedge, then open a single empty, and here the problem is very clear. Your trading standard is my analysis +, not trading discipline. Actually in the planet, I repeatedly are trading discipline and gave each couple manual, let everybody again and again, but I'm sorry, someone is really lost the desire to learn, they think they have done just a few hundred or even tens of thousands of transactions, warehouse have experienced countless times, introduction to still need to learn what knowledge? Yes, it is the wild way for most people, not according to the basic rules of trading. Many people have probably never touched financial transactions before entering the bitcoin circle. In an era of speculation with mobile phones, it is hard to believe that most people can be familiar with the logic of trading. So when you execute my strategy the wrong way, the results are predictable.  

So I am also constantly strengthening, I gave so many trading standards, including various tactics, tactics, why? Is that we do not want to be superstitious, the analysis of the best will have mistakes, zhuge liang again god, ultimately also failed to play qishan. There is no such thing as foreboding, otherwise there is no value in market transactions. It is precisely because of uncertainty that the market is full of charm. But glamour is one thing; making money is another. Like a casino, you always hear about people getting rich overnight, but only a handful of people come out with money. This is where the importance of trading discipline becomes apparent. If you were in a conflict between my analysis and trading discipline, what would you choose? Discipline, of course!!! I repeatedly stressed this point in the novice handbook, also in the usual strategy of continuous strengthening, is to hope that we establish the logic of the transaction, develop good habits, discipline to make money.  

Whether yesterday's story will happen to me or not, I hope you can reflect on it. Also hope that everyone make good use of contract trading, to help themselves to avoid risk. If you have faith that bitcoin can go up to $100,000 +, then the best thing you can do is spot + hedge. I hope I can help everyone who loves bitcoin: the most regretful thing in life is that you once owned one bitcoin! But couldn't help the temptation, keep tossing, and finally lost him!