CIO — Joanne Held in Official Group
Throughout 2016 2017 2018, with the hype of ICOs, there are many myths of coins. But after 2018 and 2019, the bubble burst and the entire market gradually became rational. Regulation is also escalating, so speculative opportunities for the entire spot market will diminish. In 2020, more opportunities for the cryptocurrency market will be in the financial derivatives market.
At the 2nd anniversary of the platform, Finn also mentioned in the community that we talked about gradually transforming into a comprehensive financial service platform to expand financial derivatives business. We have successively launched mortgage lending, fixed income wealth management and the currently launched delivery futures. All are in layout, and you’ll get more surprise in the future.
The survival rate of novices in the futures trading market is very low-but to understand that the danger is not the futures itself, but the lack of risk management ability of the novice. For traders with strong money management capabilities, the futures market is very attractive and of huge opportunities, but high yields require iron-clad discipline. Many people have a deep misunderstanding of the contract and believe that contract trading is gambling. I will tell you today about my own experience in futures trading, hoping to give some people interested in the contract some inspiration.
The beta version of the new function of DragonEx — Futures is available now. DragonEx CIO — Joanne did an AMA in the official WeChat group. And we will synchronize it in our telegram group. The AMA is mainly divided into three parts. The first part is interviews and quizzes, the second part is about how to build your own trading system, and the third part is the characteristics of DragonEx Futures and Q&A.
Interview Q & A
1. Why do you trade futures in cryptocurrency ? What attracts you most in the future market?
Jo:
Why choose cryptocurrency:
Although stocks, foreign exchange, and cryptocurrency futures are all transactions, the knowledge involved is very different. For stocks, we need to study the companies, industries, policies, and financial environment behind them. Cryptocurrency is simple, mainstream tokens are few in number, and related news is also within reach. Most importantly, I have long been optimistic about the development potential of blockchain technology of cryptocurrency and the great investment hedged potential of cryptocurrency in today’s turbulent international market.
Why choose future trading market?
Whether it is the traditional stock and foreign exchange market or the cryptocurrency future market, it is difficult to succeed and the most challenging area. It needs to overcome the weakness of human nature, be more patient, be more rational, but it is also a place full of opportunities. I remember when I was trading, I was often too cautious to judge the right direction and didn’t dare to place an order, which led me to regret having missed an opportunity. At that time, my guide told me that there would always be opportunities in the financial market. It turns out to be true, the charm of the financial market lies in the cyclical market fluctuations, and the opportunity is always there. Anyone who knows the commodity futures market knows that the futures market has a very important economic function, that is, commercial producers and consumers can hedge the price risk of commodities, that is, hedging. So is the cryptocurrency future market. For people who are mining, before the advent of the future, they are betting that the future price is higher than the current mining cost, and the emergence of the future makes mining an investment. Future trading can also hedge risk for those who invest in a large amount of cash.
For example, if you hold a large amount of spot, you can open short in the future market. If the price rises, the increase in the spot price can make up for the loss of short money in the future market. If the price is down, the profit in the future market can make up for the losses caused by the decline in the spot market price. vice versa.
2. There are many users who often lose money in trading. What do you think is the main reason?
I once heard that Loss is the result of insufficient professional knowledge and greed, and know I believe it makes sense If you don’t understand the investment yourself, even if you happen to bet a few times to make money, it is good luck, and losing money is definitely the norm. Every time you place an order, be sure to ask yourself why and what the basis of judgment is, whether you can convince yourself. If the judgment is wrong, it needs to be summarized to avoid the same mistake. If the judgment is correct, then you have verified your original judgment. Each order is a process of trial and error, in the process, your own stable and profitable trading system will gradually be formed. Think of trading as your own business, and do it with your heart, instead of treating it as gambling. Stable profits should be the goal of trading.
3. Years of trading experience, what is your secret to win? Can you share it with us
There are no things as inevitable and certain in the market, only possible and high probability. So never use a gambling mentality to trade. I think position management is the most important basis for determining whether a person is a mature trader. “The secret to making money is never to lose money.” I used to think that those who said this were silly, but now think about it, never to be eliminated from the market because of losing money is indeed the secret to making money. Always do a good job of position management and reserve funds to prepare for ammunition for an excellent opportunity.
4. For those who want to learn about future trading, what basic entry-level books or legends in the trading field do you recommend?
I recommend two books and two people to you.
The first is the autobiography of “How to trade in Stocks”, Jessie Livermore, Baidu Encyclopedia has his introduction, the living legend of the Wall Street stock market. At the age of 14, he made a $ 5 entry to the market . At the age of 15, he earned his first thousand dollars, at the age of 21 he earned his first $ 10,000, at the age of 24 he earned $ 50,000. At the age of 30, he made it to three million. When he is 52, 100 million US dollars was made. He has committed suicide after going through 4 times ups and downs in his life. Those who are interested in “The Stock Trader” can read this book to know his life. Peter Lynch also commented on him: “He can trade after primary school graduation. He started at $ 5 and was worth more than 100 million, which is an unparalleled legend in Wall Street history.” You can compare the GDP of the era with the current dollar. The value of $ 100 million at that time may be equivalent to tens of billions of dollars now.
The second book is Alexander Elder’s “Trading for a Living” series, borrowing the reader’s evaluation “This book is comprehensive and summarizes many aspects such as graphic analysis, technical indicators, psychological factors, etc. The methods and techniques are presented to the readers. I think this book is very suitable for beginners. It allows you to have a comprehensive understanding of securities operations, and teaches you how to use graphics, indicators and other tools to judge trends, analyze the market, choose stocks, and grasp the timing. “
The second person I want to introduce is James Simons
This person may be strange to many people. Let me mention two people that you are familiar with. Soros, a prestigious fund crocodile, earned $ 1.1 billion in 2008, while the average global hedge fund manager’s income for that year was only $ 464 million. Buffett, a recognized investment master, has achieved an average return rate of 20% over the past 20 years. His valuable investment book and glorious “share god” halo have been talked about.
And James Simmons, the father of quantitative trading, has an average annual return of 35% for the medallion funds he led; Revenue in 2008 was as high as $ 2.5 billion, ranking first in “Alpha” magazine’s “Eighth Global Hedge Fund Manager Revenue. Maybe someone has heard of his Renaissance Technologies.
Unlike Buffett’s “value investment”, Simmons relies on mathematical models and computers to manage his huge funds, use mathematical models to capture market opportunities, and make trading decisions by computers. He calls himself “Mr. Model” and believes that models can effectively reduce risk compared to personal investment.
The medal fund led by James Simmons has been exceptionally strong in several financial crises. From its establishment in 1988 to December 1999, the Medal Fund received a total net return of 2478.6%, which was the first place in the same period and doubled the Soros Quantum Fund. The S & P Index over the same period had a 9.6% increase. Even in 2007, when the subprime crisis broke out in full, the fund’s return rate was as high as 85%, and his personal annual income was US $ 1.7 billion.
His trading method is quantitative trading. Quantitative investment in this industry has a high level of science and technology, making it not only recruit a large number of doctors of mathematics, physics, and computer to take advantage of the most advanced technologies and scientific models in other disciplines. Nurturing other traditional industries. The most obvious is the rapid development of graphics cards and GPUs, driven in part by the huge computing power demand of high-frequency transactions. A large part of the world’s supercomputers, in addition to staying in physics labs, are still in hedge funds.
But ordinary traders are still some distance away from quantitative trading, so in the second section below, I will tell you how semi-automated or manual traders can set up their own “quantified” trading system, analyze and judge according to quantitative indicators and execute ( (Not necessarily programmatic). That is to say, during the trading process, a repeatable trading model is found to achieve a stable and realistic expected income, rather than expecting unrealistic excess returns.
How to build your own trading system
Some people say that future trading are gambling. Let’s talk about why gambling is bound to lose money.
If the conditions are very fair, the odds of winning at the casino are 51% and your odds of winning are 49%, then you may think that if you become that lucky 49%, you can win money. But anyone who knows mathematics well or knows the probability, as long as you participate enough times, your probability of winning is 0%, not 49%. Because every gambling is a Bernoulli experiment, the unequal advantages are enough to let you lose all your money.
Let me draw you a capital curve modeled by computer based on the 51/49 odds ratio, that is, when the number of participations is enough, and eventually the principal will be completely lost — the expected curve is calculated. (Picture)
The relationship between ordinary traders and professional traders is actually like the relationship between gamblers and casino owners. The biggest difference between them is the difference in the expectation curve. The former fund expectation curve is downward, while the latter fund expectation curve is rising steadily.
Most of the market is oscillating, that is, it may be profitable to sell high and buy low under volatile markets, but when the unilateral trend market arrives, it often allows you to sell high and then no longer have the opportunity to cover the position and will always go up. In the market, most situations are oscillating, and less time for trending. The simplest concussion strategy is to set the parameters, use the DragonEx’s Grid Genius, and simply do T-arbitrage repeatedly. But remember to change the parameters in time when the trend is about to form, or even pause your grid.
There are two commonly used trend trading strategies-moving average strategy and channel strategy.
Moving average strategy-short moving averages are used as opening signals, and long moving averages are used as closing signals to avoid frequent stop loss.
The 7-day moving average is above the 14-day moving average. The current price crosses the 7-day moving average. vice versa. Channel strategy-Bollinger. If it breaks the high, go long. If it breaks the low, go short. Set a take profit and stop loss. (Picture)
The trend strategy may actually retreat most of the time, and a small part of it will be profitable. Because the market fluctuates in most cases and trends in a few cases, but the profit of a few trend markets can make up for the losses of the fluctuating market. The best performance of a trending strategy in a shock market is no loss or less loss, and the best performance of a fluctuating strategy in a trend market is also the same.
Stop Loss and Take Profit.
Everyone has their own risk appetite, different take-profit and stop-loss strategies. Some people have a forward pyramid shape, and some have a reverse pyramid shape. Of course, it can also be equal. Any position management system is likely to burst, so take profit and stop loss are very necessary. Our goal is to maximize profit while minimizing risk, rather than minimizing risk and maximizing profit. Risk and profit are an effective boundary issue, and there is no balance between low risk and high profit. If your advantage is fixed and the total profit / loss is a fixed value, you don’t need to be afraid of risk. The “same profit and loss”, the core secret of the trend strategy to profit is to replace the profit with risk. The setting of stop loss and take profit should be positively related. It is not recommended to set a particularly small stop loss parameter, otherwise it will repeatedly charge the stop loss.
Achieving positive expectations is to find a way to achieve a win rate * breakeven ratio greater than 1. That is to find a trading strategy that can achieve stable profitability.
For example, if the winning ratio of a trend trading strategy is 30% and the profit-loss ratio is 3: 1, then the positive expectation is (30% / 70%) * (3/1) = 1.28, which is a profitable strategy. After understanding this concept, we know that if we want to improve the performance of a trading strategy, we must either increase the winning ratio or increase the profit-loss ratio. The two are mutually destructive. We cannot pursue “double heights” but look for an optimal value.
Regarding parameter settings,
Regarding parameter settings, some people look at many indicator lines when trading, such as MACD, Boll, Volume, RIS CCI KDJ, etc. My suggestion is to keep the parameters as small as possible, and to continuously optimize after each trade profit or loss Own parameters. After gradually exploring a set of mature manual trading strategies, you can try to transform trading thinking strategies into a computer-readable programming language and execute the strategies by programs, which greatly reduces the impact of investor sentiment fluctuations. Avoid making irrational investment decisions when the market is extremely fanatical or pessimistic, and gradually turn your mature trading strategy into a semi-automatic or fully automatic one.
Let ’s move on to the third part, let me briefly talk about the future of DragonEx
The future of DragonEx
Highlights come first,
“Highlight one, the transaction depth comes to a higher level, no need to worry anymore, sell and buy at any amount you want.
Highlight two: Lower transaction fee for you
Highlight three: APP side and WEB side will be launched at the same time, you can do it on your phone now
Highlight four: K-line indicator parameter settings can be saved, and the system will remember your indicator parameter preferences.
Highlight 5 is also the brightest, multi-currency margin form of delivery future. Not only USDT, DT can also be used as BTC future trading margin! DragonEx will always innovate!!! Innovation is the soul. “
