Female Mandarin Version

Dear friends in the futures circle, who is struggling in the trading market, doesn’t want to make more money? But many people always feel that as long as they make more trouble and trade in the market, they can seize more opportunities. But Mr. Charlie Munger had long said: "What you need is not a lot of action, but a lot of patience. Money is transferred from an insecure person to a patient's pocket." This sentence sounds mysterious at first glance, but in futures trading, it is a real truth! Today, let’s talk about how important patience is in buying and selling decisions of futures, and how to use this patience well.

1. Why is the more “diligent” you are, the more you lose money? Lack of patience is the root of the disease

Are there always people like this around us? Every day, I stare at the futures market when I open my eyes, buy and sell, and I am so busy that I can’t pay. As a result, I lose a lot of money when I settle the accounts in the last time. I have a friend Lao Zhou, who is a typical "trading madman". He always feels that as long as he is diligent enough and trades a few more times, he can always seize the opportunity to make money. As long as you see which variety fluctuates a little, no matter how many times you buy it first. Sometimes when I just finished buying it, I found that the trend was wrong, and I quickly sold it. As a result, I paid a lot of handling fees, but the principal was getting smaller and smaller.

Once, rebar futures suddenly rose, Lao Zhou's eyes lit up and he immediately chased in. But before he could be happy, the price began to pull back. Old Zhou was panicked and wanted to stop the loss as soon as possible. As soon as he sold it, the price rose again. He was unwilling to accept it, so he chased in again and went through it repeatedly. He traded seven or eight times in a day, but in the end he not only failed to make money, but also lost tens of thousands. What is Lao Zhou’s problem? I just were too impatient and couldn't hold back, and was led by the short-term fluctuations of the market, without considering trends and timing at all.

In the futures market, the market is like the waves of the ocean, and it is normal to have rises and falls. If you are not patient and always trade frequently in small fluctuations, it is like rowing a boat on the turbulent sea, and you will capsize sooner or later. Those impatient people, when they see the price rise a little, are afraid of missing the opportunity to make money and are eager to chase the rise; when they see the price fall, they are afraid of losing more, and they are in a hurry to sell the fall. What's the result? Buying at the high point and selling at the low point has become a "reverse indicator" in the market. And those patient traders will be like experienced fishermen, patiently waiting for the big fish to take the bait, only taking action when they are most confident.

2. Buying depends on patience: don’t take action blindly, just wait for the best time

In futures trading, when to buy is definitely a big question. Many people lose money because they blindly take action when they shouldn't buy it. In fact, true masters know how to wait patiently for the best buying time, just like cheetah hunting, it will lurk for a long time before taking action, observe the prey's every move, and not launch an attack until it is sure that everything is foolproof.

So how should I wait for this opportunity? First, learn to judge trends. Just like driving, you have to see the road, and doing futures, you have to see the general direction of the market clearly. If the market is in an upward trend overall, we will find those varieties that have been pulled back in place to buy; if it is a downward trend, then stop and don’t buy at the bottom easily. There are many ways to judge trends, such as looking at the moving average. When the short-term moving average crosses the long-term moving average from the bottom to the top to form a "golden cross", this is a signal of an upward trend; on the contrary, the short-term moving average crosses the long-term moving average from the top to the bottom, and a "dead cross" appears, which is a downward trend. However, these signals cannot be bought immediately as soon as they appear, and they must also be judged comprehensively based on other indicators and market conditions.

In addition to looking at the trend, we should also pay attention to key support and resistance levels. The support level is like the "floor" of the price. When the price falls to this position, it is likely to rebound; the resistance level is like the "ceiling", and when the price rises here, it is easy to encounter obstacles and fall back. For example, the price of soybean futures has stopped falling and rebounded around 5,000 yuan/ton many times, and 5,000 yuan/ton is an important support level. Patient traders will wait for the price to approach this support level and a stop-fall signal appears, such as closing the K-line with a longer lower shadow line before considering buying.

Also, before and after the release of major news, you have to calm down. For example, the Federal Reserve raises interest rates and the country introduces important industrial policies, these news will have a huge impact on the futures market. Before the news was announced, the market was often full of uncertainty and price fluctuations were drastically. If you are impatient and buy blindly at this time, it is easy to step on the wrong side. The clever way is to wait and see first, wait until the news is implemented, the market digests the impact, and the trend becomes clear, and then look for opportunities to enter.

3. Selling depends on patience: Don’t be greedy or panic, and put it accurately.

Learn to be patient and wait for the opportunity to buy, and you need to be more patient when selling. Many people are either too greedy or too panic when selling, but they always fail to sell well. They don’t make any money they should make, but they lose a lot of money they shouldn’t lose.

Let’s talk about the issue of greed first. Some friends' futures products that they hold have increased a little, and they began to fantasize about making more money. They have clearly achieved their stop-profit goal, but they are reluctant to sell them, thinking, "I will sell them if it goes up." But how could the market follow your ideas? The price may suddenly reverse, not only will the profit be lost, but it will also lose. An investor I know is that when he was trading crude oil futures, the market has risen all the way, and his account floating profit has reached 30%. According to the plan, he should take profit when he makes a profit of 20%, but he feels that the price of crude oil can still rise, so he keeps holding it. As a result, a sudden geopolitical incident caused crude oil prices to plummet. In the end, he not only failed to make money, but also lost a lot. This is the typical consequence of insufficient greed and lack of patience to put the bag in peace.

Let’s talk about panic selling. When the futures price of holding positions falls, many people feel panic, fearing that they will lose more, and are eager to cut their losses and stop losses. But sometimes, the price is just a normal pullback. If you are not patient and sell as soon as it falls, it is likely to sell at the lowest point. The correct way is to set the stop loss level before buying, and hold it patiently as long as the price does not fall to the stop loss level. If the stop loss is really triggered, don’t hesitate and execute decisively. But in this process, don’t scare yourself because of slight fluctuations in the price and sell it easily.

In addition, when selling, you must also combine the trend and market conditions. If the overall trend is still upward and the holding products are only adjusted in a short term, you can wait patiently, and maybe you can wait until the price rises again. But if the trend has reversed significantly, such as a top signal, you must sell decisively, regardless of whether the expected profit target is achieved or not.

4. Tips for cultivating patience to let you say goodbye to "ittingling hands"

Although patience has natural ingredients, it can also be cultivated through acquired cultivation. If you feel that you are always lacking in patience in futures trading, you can try these small methods:

Develop a detailed trading plan: Before each transaction, clearly state the buying conditions, selling conditions, stop loss and stop profit levels. Having a plan is like having an action guide. As long as the market does not have a situation that meets the plan, we will definitely not trade. This can help you overcome the problem of impulse trading.

Reduce the time to watch the market: The reason why many people trade frequently is because they stare at the market all day long and are affected by the slight fluctuations in prices. You can try to reduce the time to watch the market, check the market for a few time periods a day, and do other things at other times to divert attention. This not only avoids being disturbed by short-term fluctuations, but also keeps yourself calm.

Review and summary: After the transaction is over every day, take some time to review the transactions on that day and see which operations you make mistakes due to lack of patience. Analyze the reasons and summarize the experience and lessons. Through continuous review, you will have a clearer understanding of your trading behavior and gradually develop patience.

Set reasonable expectations: Don’t expect to get rich overnight in the futures market, set reasonable profit goals and risk tolerance for yourself. When you have a rational understanding of returns and risks, you will not lose patience because of rushing to achieve success.

Charlie Munger's words really reveal the secret of futures trading. In this market full of temptations and traps, patience is our best weapon. It can help us avoid unnecessary risks, seize real opportunities, and earn money steadily into our pockets. From today on, stop being that impatient "trading madman". Learn to be like a master, wait patiently and make calm decisions. I believe that it won’t take long to find that your trading results will change drastically!