Don't doubt it; from a psychological perspective, patiently watching and waiting for opportunities is the true secret to a trader's wealth.
Now analyze whether your previous trading methods were based on feeling; feeling that prices will rise or fall is all about feeling. Instead, have the patience to see effective signals at reversal points before entering.
If you don't have the patience to wait and enter directly, it can only be said that this market is not suitable for you to trade.
1. The Ever-Changing Landscape of the Contract Market
The market is like a turbulent sea, with price fluctuations resembling endless waves. The market is influenced by numerous factors, including global economic conditions, political situations, natural disasters, etc. These factors intertwine and interact, making the price trends in the futures market extremely complex and difficult to predict.
In such a market environment, traders can easily be confused by short-term price fluctuations, blindly following the trend and frequently entering and exiting the market. However, this shortsighted behavior often leads traders to lose their direction amidst market ups and downs, ultimately suffering losses.
2. Being Good at Waiting: Capturing the Best Timing
In-Depth Research and Analysis
Traders who are good at waiting will first spend a lot of time and energy on in-depth research and analysis. They will pay attention to macroeconomic data, industry trends, supply and demand relationships, and other aspects of information. Through comprehensive analysis of this information, they attempt to predict future market trends and find potential trading opportunities.
For example, a trader focusing on agricultural futures will closely monitor the impact of weather changes on crop yields, as well as the global supply and demand situation for agricultural products. When he discovers that a certain region is experiencing severe drought, which may lead to reduced crop yields, he will not immediately enter the market but will continue to observe the market's reactions and other changing factors, waiting for the best entry opportunity.
Waiting for Market Signals
In addition to in-depth research, traders who are good at waiting will also patiently wait for the market to issue clear signals. These signals may include price breaking through key resistance or support levels, significant changes in trading volume, and technical indicators showing crossovers. They understand that blindly entering the market when signals are not clear is like groping in the dark, with high risks.
Taking gold futures as an example, if a trader finds that gold prices have been fluctuating within a range for some time, and when prices break above this range accompanied by increased trading volume, this could be a buy signal. However, the trader will not rush to enter simply because of a price breakout; they will wait for the price to retrace and confirm the validity of the breakout before making a decision.
Overcoming Psychological Impulses
Waiting is not easy, especially when facing the temptations of the market. In the futures market, there are seemingly attractive trading opportunities every day, but many of them are traps. Traders who are good at waiting can overcome their inner impulses and not be deceived by short-term gains.
They understand that frequent trading not only increases trading costs but also reduces the success rate of trades. In contrast, patiently waiting for high-quality trading opportunities can significantly increase the likelihood of profit. This restraint and self-discipline are key to their survival and development in the futures market.
3. Patient Holding: Harvesting Substantial Profits
Firm Belief
Once traders enter the market after careful consideration, patient holding becomes the key to realizing profits. Behind patient holding is the trader's firm belief in their trading strategy. They trust their analysis and judgment, believing that the market will eventually develop in the direction they expect.
For example, a trader believes that the price of a certain commodity will rise in the future based on fundamental analysis. He buys the futures contract at an appropriate price, and during market fluctuations, he firmly believes in his judgment and is not swayed by short-term pullbacks. Even when some unfavorable news appears in the market, he can remain calm and continue to hold his contracts.
Courage to Endure Fluctuations
Market price fluctuations are inevitable, and sometimes the amplitude can be quite large. Traders who are patient in holding need to have enough courage to endure these fluctuations. They do not panic and stop-loss due to temporary losses, nor do they rush to take profits due to temporary gains.
In market fluctuations, they will pay attention to the reasons for price movements, determining whether there has been a significant change in fundamentals. If it is merely a short-term emotional fluctuation in the market, they will choose to continue holding. This courage to endure fluctuations is not blind risk-taking, but is built on a deep understanding of the market and confidence in their trading strategy.
Long-term Vision Patient holding also requires traders to have a long-term vision. They will not be swayed by short-term price fluctuations but will focus on longer-term goals. They understand that the price trends in the futures market are the result of multiple factors working together, and short-term fluctuations cannot change the long-term trend.
4. The Integration of Being Good at Waiting and Patient Holding
Being good at waiting and patient holding are complementary; both are essential. Only by organically combining waiting and holding can traders achieve success in the futures market.
Waiting provides the prerequisite for patient holding. If a trader blindly enters the market without sufficient preparation and market signals, then no matter how patient they are, it will be difficult to achieve profitability. In contrast, by patiently waiting, traders can enter at the right moment, thereby increasing the success rate and likelihood of profit.
Patient holding is a continuation and elevation of waiting. Once traders successfully enter the market, patient holding allows them to fully enjoy the profits brought by market rises. At the same time, patient holding also enables traders to remain calm in the face of market fluctuations and not easily give up their positions.
For example, a trader conducts in-depth research on rebar futures and discovers that due to the recovery of the real estate market, the demand for rebar will increase, and prices are expected to rise. He patiently waits for the market to adjust to an appropriate price level before decisively entering and buying rebar futures contracts. During the holding period, the market experiences some fluctuations, but he firmly believes in his judgment and patiently holds on. Eventually, the price of rebar rises as he expected, and he makes substantial profits.
5. Cultivating the Quality of Being Good at Waiting and Patient Holding
Accumulation of Knowledge and Experience
To become a futures trader who is good at waiting and patient holding, one must continuously accumulate knowledge and experience. Traders need to learn the basic principles of the contract market, trading rules, technical analysis methods, and other foundational knowledge. Additionally, they need to improve their trading skills through practical trading, continually summarizing experiences and lessons.
In the process of accumulating knowledge and experience, traders can learn from successful traders, read related books and articles, and participate in professional training courses. Through continuous learning and practice, traders can gradually improve their analytical skills and judgment levels, thereby better seizing market opportunities.
Adjustment of Mindset
A good mindset is an important guarantee for being good at waiting and patient holding. The fluctuations in the futures market can easily trigger emotional changes in traders, such as greed, fear, and anxiety. Traders need to learn to adjust their mindset and overcome the influence of these negative emotions.
One effective method is to practice meditation and deep breathing exercises. Through meditation, traders can calm their minds and enhance their concentration and self-control. Deep breathing exercises can help traders alleviate tension and anxiety, maintaining calmness and rationality.
In addition, traders need to establish the correct trading concept, not to overly pursue short-term high returns, but to focus on long-term stable profits. Only by maintaining a calm mindset can traders remain patient and composed in the market.
Execution of Discipline
In futures trading, the execution of discipline is crucial. Traders need to establish a strict trading plan and execute it rigorously. The trading plan should include key elements such as entry points, stop-loss points, profit points, and response strategies for different market situations.
When the market trend aligns with the trader's expectations, they should patiently hold their positions according to the plan; when the market trend does not match expectations, they should decisively stop-loss to prevent losses from further expanding. At the same time, traders should also avoid casually changing their trading plans and should not violate discipline due to momentary impulses.
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