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For many newbie traders, futures trading often comes with high risks and emotional fluctuations. However, these challenges can be overcome by building a replicable, executable trading system with strong risk resistance. This article will introduce a six-step method of "Light Position + Trend Following" that has been validated by practice, helping you to progress steadily in the futures market.
Firstly, adopting a Light Position strategy is crucial. In the initial stage, it is recommended to trade with no more than 10% of the total funds, even if there is a strong judgment about the market direction, one should remain cautious and only make small exploratory trades. Remember, the essence of Futures Trading is to improve long-term win rates through effective risk management, rather than short-term speculation.
Secondly, a stop loss point should be set before each trade. The maximum loss for a single trade should not exceed 5% of the total account balance. Strictly adhering to stop loss discipline is more important than predicting market direction, as only traders who are willing to take losses can survive in the market in the long run.
Third, consider adding to your position in the direction of the trend after it is established. Each time you add to your position, it should be based on existing profits. Once signs of a reversal appear, take profit in a timely manner. Remember, the purpose of adding to your position is to increase profits, not to cover losses.
Fourth, resolutely avoid counter-trend averaging down. Many investors fall into the misconception of "buying more as prices drop," which ultimately leads to repeated depletion of funds. A mature trading strategy should involve adding to positions when an upward trend is confirmed, rather than blindly "catching a falling knife."
Fifth, regularly convert part of the profits into cash. It is recommended to withdraw 20%-30% of the profits every week, which can not only stabilize your mindset but also make subsequent operations more objective and rational.
Finally, adopt a compound interest strategy for fund management. Keep a portion of the profits in the account to continue operations, creating a compounding rolling effect. By persisting over the long term, even a small amount of capital has the opportunity to achieve stable growth.
This strategy may seem simple, but the real challenge lies in long-term persistence and strict execution. The core of Futures Trading is not in predicting market trends, but in effectively controlling risks, following the trend, and steadily accumulating profits.
For traders who aspire to achieve long-term success in the Futures Trading market, the primary task is not to bet everything on a single direction, but to learn how to survive in this challenging market. Only by mastering these fundamental principles can each of your trading days be filled with hope and anticipation.