The typical example of "death" in the futures market
People's lives will ultimately end in death. The only thing we can do is to live a fulfilling life without regrets. In this world, there is only one kind of success, which is to live your life in a way that you enjoy.
The futures market is often compared to a magnifying glass that amplifies human weaknesses, including ignorance, greed, fear, etc. After trading futures for a long time, one may become numb to the ups and downs of trading, and accustomed to the inevitability of seeing many people leave empty-handed and exit the market due to margin calls. Like many speculative markets, the way the futures market tells the truth to most people is through "death." No matter what method is used, most people leave the market this way. Let me give you some examples:
1.Death by heavy position Many people have read "Reminiscences of a Stock Operator". Livermore's trading ability was better than most people and he had made a lot of profits from trading, but he still went bankrupt in the end, penniless. The reason is simple: he took on too much risk with heavy positions. This is the most common way to "die" in the futures market.
Futures trading is about exchanging risk for returns. If you want to make big returns, you need to be prepared for losses, but people may not be mentally prepared for this. In this situation, one needs to remember one thing: it may take thousands of times to turn 10,000 into 1 million, but it may only take one time to turn 1 million into zero.
In the trading world, survival is more important than profit. Only by putting good fund management and risk control first can one avoid the same fate as Livermore. If you cannot obtain more profit because your funds are insufficient, it can only mean that the additional profit that could be obtained is not what you should get at the moment. Do not rush to take extra risks due to excessive greed.
2.Death by going against the trend Sometimes, most commodities in the futures market rise rapidly, even reaching new highs of the year, and the prices of basic commodities rise so much that many people begin to doubt life. However, the bears still persist, thinking that the price is too high and must come down?! The formation of a rising trend is a natural result of the long and short game, and the idea that the price will fall in the short term is generally unfounded and just a subjective conjecture. Many people cannot distinguish between reality and idealism.
In futures trading, following objective reality is everything. Trading should avoid being emotional or filled with fantasy, otherwise, these people will be eliminated in large numbers every year. If you cannot overcome this flaw, you may not be suitable for futures trading at all.
3.Death by cutting positions Successful traders are generally recognized as "slick". This "slickness" has profound implications, including persistence and flexibility, which are easy to say but hard to do.
Traders tend to slide towards two extremes, and the lack of their own judgment is more likely to slide towards one end. They often blindly follow the market, without their own thinking, and only follow the basic principle of cutting losses if wrong. However, the market trend may not be wrong, and if the trend is not followed, it may lead to the wrong decision of cutting positions. It takes a long time and experience to become a slick trader.
Although knowledge is boring, it is useful. The market changes rapidly, so keep rational and calm judgment at all times.
The futures market is often compared to a magnifying glass that amplifies human weaknesses, including ignorance, greed, fear, etc. After trading futures for a long time, one may become numb to the ups and downs of trading, and accustomed to the inevitability of seeing many people leave empty-handed and exit the market due to margin calls. Like many speculative markets, the way the futures market tells the truth to most people is through "death." No matter what method is used, most people leave the market this way. Let me give you some examples:
1.Death by heavy position Many people have read "Reminiscences of a Stock Operator". Livermore's trading ability was better than most people and he had made a lot of profits from trading, but he still went bankrupt in the end, penniless. The reason is simple: he took on too much risk with heavy positions. This is the most common way to "die" in the futures market.
Futures trading is about exchanging risk for returns. If you want to make big returns, you need to be prepared for losses, but people may not be mentally prepared for this. In this situation, one needs to remember one thing: it may take thousands of times to turn 10,000 into 1 million, but it may only take one time to turn 1 million into zero.
In the trading world, survival is more important than profit. Only by putting good fund management and risk control first can one avoid the same fate as Livermore. If you cannot obtain more profit because your funds are insufficient, it can only mean that the additional profit that could be obtained is not what you should get at the moment. Do not rush to take extra risks due to excessive greed.
2.Death by going against the trend Sometimes, most commodities in the futures market rise rapidly, even reaching new highs of the year, and the prices of basic commodities rise so much that many people begin to doubt life. However, the bears still persist, thinking that the price is too high and must come down?! The formation of a rising trend is a natural result of the long and short game, and the idea that the price will fall in the short term is generally unfounded and just a subjective conjecture. Many people cannot distinguish between reality and idealism.
In futures trading, following objective reality is everything. Trading should avoid being emotional or filled with fantasy, otherwise, these people will be eliminated in large numbers every year. If you cannot overcome this flaw, you may not be suitable for futures trading at all.
3.Death by cutting positions Successful traders are generally recognized as "slick". This "slickness" has profound implications, including persistence and flexibility, which are easy to say but hard to do.
Traders tend to slide towards two extremes, and the lack of their own judgment is more likely to slide towards one end. They often blindly follow the market, without their own thinking, and only follow the basic principle of cutting losses if wrong. However, the market trend may not be wrong, and if the trend is not followed, it may lead to the wrong decision of cutting positions. It takes a long time and experience to become a slick trader.
Although knowledge is boring, it is useful. The market changes rapidly, so keep rational and calm judgment at all times.
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