Many people who learn to trade, including Mazhu himself, use various indicators and various skills as soon as they come up, and they are often blocked by clouds and fog. Someone gave an argument: the so-called trading is actually trading risk, risk is opportunity, and trading is to seize the opportunity. So how would we define risk? How to evaluate risk? How to trade with risk?
First think about what risk is. Many people think that risk means losing money, big risk means losing big money, and small risk means losing small money, which is actually wrong. If we let Mazhu define it, risk is actually the money that may be lost, and the money that has already been lost is a loss. Many trading opportunities with small risks or even zero risks can cause new traders to lose a lot of money, so risk does not mean losing money, but also Plus a possibility.
Then how to evaluate or judge the size of the risk? This is very simple. Those who may lose a lot of money are big risks, and those who may lose a small amount of money are small risks. But how to distinguish this possibility? After a long period of in-depth thinking, Mazhu came to some conclusions, and shared them with everyone.
First: related items of risk. That is, what affects the risk, there are the following four items:
1. Plan investment: It is positively related to risk, the greater the principal investment, the greater the system risk in the middle of the position month;
2. Estimated output: It is positively related to risk. The larger the expected profit space, the greater the possible loss, and the greater the system risk;
3. Estimated profit-loss ratio: It is negatively related to risk. The larger the estimated profit-loss ratio, the greater the difference between possible profit and possible loss, and the smaller the system risk;
4. Winning rate: negatively correlated with risk, the higher the winning rate, the smaller the system risk;
An ancient book said: "Propriety, righteousness, integrity and shame are the four dimensions of a country. If the four dimensions are not expanded, the country will perish." Risk trading also has these four dimensions. If these four dimensions are not expanded, traders will also perish. 1 and 2 belong to the category of fund management, mainly related to the amount of capital investment and the rate of return. 3 and 4 belong to the category of trading technology. The winning rate tests the trader's ability to judge the market trend. Grasp the timing of the field. For example, traders are very accurate in judging the market, but when the market has developed almost the same, the expected profit is very small. If the market reverses and the loss is larger, that is not a good deal. technology. Or for short-term traders, the choice of entry point is not good, resulting in the volatile market often exceeding the stop loss range, and they fall into the situation of either frequent stop loss or not stop loss.
Second: Mazhu made two pictures, which can visually show the trading risks that the four-dimensional trading can judge under different circumstances:
Third: Interpretation of this picture
1. Regarding fund management, there are four situations as follows:
(1) If you invest a lot of money and want to get super huge profits, you have to take the biggest risk;
(2) If you invest a small amount of money and only want a small profit, there is almost no risk;
(3) It is to invest a lot of money, just want to make a small profit, and there is a high probability that you will not lose too much, so the risk is small;
(4) If you invest a small amount of money and want to get a lot of sudden profits, there is a high probability that the small principal will be lost, so the risk is relatively high;
Summary: Looking at this picture, it is not how much you invest that determines the risk of fund management, but what is your expected trading profit. The more you want to make a lot of money, the greater the risk you take.
2. Regarding trading technology, there are four situations as follows:
(1) The profit-to-loss ratio is very small, that is, the legendary "run away when you see the profit", the winning rate is still very low, and the risk is the greatest;
(2) The profit-loss ratio is high, the winning rate is equally high, and the risk is minimal;
(3) The profit-to-loss ratio is very small, but the winning rate is very good, and the profit is sustained in a short period of time, and the loss is returned to before liberation, so it is risky;
(4) The profit-loss ratio is very high, but the winning rate is low, and you lose more than you win, but you win once and you lose many times. It is also possible to make a profit overall, so the risk is small.
Summary: The most important thing in technology is the profit-loss ratio, that is, the grasp of the timing of entry. In reality, there are many people who have judged the market correctly but can't make money, which can prove this.
3. If you look at these two graphs together, if you regard investment as money and trading technology as talent, you can also draw four situations:
(1) People who have no money and no talent do business, the risk is the greatest, and if there is a slight setback, they will have nothing to eat;
(2) People who have money but no talent do transactions, the risk is greater, because once the loss is not a decimal;
(3) People who have no money but are talented do transactions with less risk, because they can’t lose much if they lose;
(4) Those who are rich and talented do business with the least risk.
Summary: In trading, technology is the most important thing. It is not terrible to have no money, but the terrible thing is to have no brains.
Fourth: How to apply it
This picture is mainly to solve many things in the trading discussion, so that traders can arrange the various conditions encountered in the actual operation according to the order of importance, so as not to operate blindly. Or believe in a certain basis to trade. These two pictures can be named "Mazhao Risk Analysis Method", Mazhao's patent, welcome to use.
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