Every trader involved in futures trading has likely experienced a period of ignorance and confusion. To put it in a popular internet slang, we have all had our moments of bewildering behavior in trading.

The essence of futures trading is to gain a lot with a little, but why is it that I always seem to "gain a little with a lot"?!!

In principle, the futures market is about risking a very small amount to potentially reap huge profits. Here's how to approach it:

1. Each small risk should be pre-planned and strictly executed as the market develops. The result of strictly adhering to discipline is that you never lose a lot of money. After the market moves against us, the cost we pay is something we can plan for in advance and control during the process. If we fail to take the initiative in pre-planning and in-process control, then there is only one thing left to passively accept, which is "regret after the fact."

2. Never losing a lot of money is not only reflected in the firm execution of each market movement but also should be implemented in the overall operational strategy. For example, when formulating an overall profit plan, the total risk taken should be a small part of the total capital. If you firmly adhere to the principle of not losing a lot of money, you have achieved half of the "gain a lot with a little," that is, the "little" part.

Like warfare, you must first protect yourself to effectively eliminate the enemy. Protecting yourself does not mean making no sacrifices, but rather minimizing them, or in other words, maximizing the ratio of victory to cost. If you can indeed execute according to the pre-planned strategy and control each loss to a minimum, then you have mastered a greater overall winning rate. Why do I say that?

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1. In the case of consecutive judgment errors, or when our judgments lack accuracy, the smaller our losses after each failed trade, the longer we will survive in the market, and the more opportunities we will have to turn things around.

2. In the case of a mix of right and wrong judgments, if each loss is less than the profit, then our accounts will definitely be in surplus. We stand on the side of victory. Moreover, the smaller the average loss and the greater the profit, the more profit we make. The greater the ratio of average profit to loss, the more profit we make.

3. In the case where correct judgments outnumber incorrect ones, if each loss is less than the profit, then we are definitely triumphant and overflowing with success.

 I am quite adept at stock trading, and it's no problem to operate with a full position; why do I always suffer losses in futures trading?

Stock trading and futures trading are really not the same thing. In futures trading, under normal circumstances, the funds used for each transaction are definitely less than one-third of the total funds, which means that there is always available capital on the account that accounts for more than two-thirds of the total funds.

However, I don't think these can be called idle funds, as they are equally important to my futures operations.

1. This part of the funds is also within my overall consideration. For example: if in a wave of the market, on an account with a total of 100,000, I buy forward contracts worth 30,000, then generally, based on the same overall thinking, on an account with a total of 200,000, I would buy forward contracts worth 60,000. The remaining 70,000 and 140,000 funds on the two accounts are also included in my overall strategy. They are also participants in the whole.

2. They are also the main force and the main body of the campaign, which is our strength reserve for waiting patiently for the decisive battle. An excellent general would never put the main force in a desperate situation. On the contrary, they are more often in a state of rest and standby, ready to play a decisive role in the decisive battle. The larger the corps, the more strategic the general. The time of combat for their troops is less than the non-combat time, and more time is spent on recuperation and preparation, more time is spent on planning, waiting, and choosing.

3. I always use these funds in a few key market trends, making the account close to full position or even 100% full position operation. Without the use of these funds, I would not be able to achieve a complete victory. My goal of doubling the total amount of funds not only includes them in the "total amount" but also needs their "full support" in the key market decisive battle.

Isn't futures trading just a matter of luck? Buy when it rises, sell when it falls! Why do you still need to learn skills?!

It is true that you can make a profit in the futures market by luck, and it is not wrong to say that you have made a profit. Because the market itself has only two directions - either up or down, and the possibility of going in the right direction with a single order is 50%. If you do one order every day and make a profit for three consecutive days, it is not too difficult. It is not more difficult than playing mahjong for three consecutive rounds, but you can't do it every time, you need a bit of luck.

For newcomers to the market, there are always more adaptation issues. It is commendable to be able to persist in the market for a month without getting hurt. In such a fiercely competitive market, if you can still make a profit after three consecutive months, it is extraordinary. I am sure you must have a unique insight. Maybe it is a keen intuition, an accurate judgment, or a more reasonable allocation of funds. In short, you are not fighting the market blindly or by instinct, you must have made some thinking and used some rational wisdom.

Why is technical analysis important? Listen to the famous technical analysis master John Murphy's evaluation in his book "Technical Analysis of Futures Markets", "Technical analysis is a summary of historical experience, and its effectiveness appears in the form of probability. The effectiveness of technical analysis can only be improved by combining it with fundamental analysis."South Korean renowned technical investment master Aikang Lao said, "I am a technician, and I regard it as the sharp sword for the success or failure of my investment. However, the premise is that I have already possessed a good psychological quality, reasonable capital allocation, and proficient investment skills. Without these conditions, even if my technical analysis succeeds 99 times, a single failure can easily knock me down." It can be seen that even the technical analysis ambassador, who made a fortune through technical analysis, is very cautious about technical analysis.

Many successful traders in the world use fundamental analysis to determine the direction of market trading, and use technical analysis to determine the timing of entering and exiting trades. This is the correct way to use technology!