Category: Money tips Release Date: 2006-10-24
Right and wrong often means that the relationship between truth and falsehood, extended to the market means that profits are correct, the error means a loss. Therefore, investors in the transaction or even the correct worship and longing, while the error, even if it is a minor mistakes to the minimum. Hence, the number of transactions on the proportion of right and wrong to evaluate the level of trading in the futures market point of view is very popular, but I believe that this understanding of right and wrong of the transaction is meaningless, and it is very wrong. Correct understanding of right and wrong should be considered in the following aspects:
First, the characteristics of right and wrong
1. Relativity
In the transaction, we often see a loss of positions have been held by many investors to profit position but moved very quickly, this phenomenon is very common, but it is not the investors do not rationally, but he was unable to determine right and wrong, he does not have a very clear criteria for judging right and wrong. However, there is no right or wrong to judge why he had standards? Because in the trading market, right and wrong with the other does not have the characteristics of any market, namely: right and wrong in the trading market, the conversion of very fast, too fast too late to even respond, one minute before a deal could be profitable , while a minute later it may become a loss; also be profitable today, the second day they turned into a loss position, this rapid conversion is right or wrong market unique, and it is trading market with other markets, an essential difference between .
It is right and wrong of this rapid transformation to enable investors to proceed from instinct, while avoiding disadvantages, the error will have on the psychological expectation, looking forward to the error will be quickly converted into the right, which has held the loss list, while the opponents earnings list it for fear of losses will be quickly converted into open positions as soon as possible to form a small loss big win situation in which profit Retention losses to close out the rights and wrongs characteristics of the market caused by the instinctive reaction of investors . Correct understanding of right and wrong should first be clear right and wrong of this rapid transformation, meaning that highly relative.
2. Time -
Right and wrong apart from being a highly relative nature of things, but also highly time-sensitive. Any transaction, whether profit or loss have a valid timing, over this time period is right and wrong would be reversed, which manifested itself in the stock market still obvious, investors once the quilt, because look forward to the psychological unwilling to stop, but was forced to hold a long time to wait for the next cycle, the emergence of a profit. However, in the futures market, due to margin system and delivery restrictions, investors are not long-held position, often can not wait until the arrival of profitability during the forced loss of appearance.
Right and wrong on the timeliness of the market produced a time-cycle studies, and the formation of a special cycle theory, thereby enabling investors to seize the market, not only from the price up, but up from time to seize the market, so that the transaction will advance to a level of . The importance of time period can be compared and the importance of the price. We can study to determine the right time is in a bear market or a bull market in the state or whether the state coming to an end, and so reverse. Of course, the time period may be long or short, depending on whether they are investors to do more large-scale transactions, what level of transactions. For the short-term trading is concerned, certainly a short period, while the long-term inevitable a long cycle. For investors concerned, through the analysis of time, you can determine what state the current market, so as to establish their own trading direction, and to judge their own right or wrong or not.
3. Continuity and indivisibility of
Win loss from the transaction itself composed of the composition from the right or wrong, is not only the profit or loss transactions. In the transaction, right and wrong is continuous, indivisible, this continuity was not referring to a continuous profit or loss, but right and wrong are alternating, and never will be, a continuous one. Meanwhile, the indivisible nature of right and wrong, like a piece of paper, like positive and negative integral, who can not have profits or losses, who can not bring profit and loss splitting them up. You can only really understand the potential for loss is a normal phenomenon and an inevitable phenomenon, your transactions in order to maintain a calm state of mind in order to create fear does not impinge on the market can not be according to the proposed transaction.
