Michael · Magas was the first to appear on the list of American speculative wizards, and he was the famous American futures master Bouchamps · Teacher of Gao Funa. After graduating from university in 1969, due to his excellent grades, he entered the university to pursue a doctorate in psychology. After obtaining his doctorate, he worked as an informant for a futures company, where he loved speculation, quit his high-paying position, worked as a listing representative for a short time, and finally was hired as a professional speculator to manage funds for the company. His fund's bottom profit has repeatedly exceeded the sum of the senleys of other fund managers in the company. Within 10 years, the funds in the accounts managed by Magas had grown 2,500-fold, miraculously from $30,000 to $80 million.
Investment Strategy and Theory: Michael · Magas's trading principle is trinity. First, the basic factor should be an imbalance between supply and demand, indicating that the market will have greater fluctuations. Second, chart analysis, the same signal must be sent. Third, the market tone should be coordinated with the trend of the market. For example, in the bull market, the bearish news can be ignored, and if it is slightly favorable to the rumors, it will rise slowly.
Specific approach: The market with all three factors in the "Trinity" can strike.
Opinion on investment instruments: Whether the market tone matches the market trend occupies an important position.
Quotes and Ideas:
· The battle of Sen Qian is not well utilized, and if the forest is exhausted, how can the profits be made to fill the lost money.
· There is no other way to ensure survival in the speculative market. When you feel that the road ahead is uncertain, the best way to deal with it is to temporarily leave the market for a holiday and rest until you recover inspiration and join the battle at any time. According to past experience, after a small break, the mind is clear, and most of the results have made good progress.
· The purchase and sale of their own deployment is full of confidence, before touching the stop loss plate, it is natural to stick to the end, and there is nothing to say if you lose, otherwise it is difficult to become a big thing.
Trading Principles – Trinity
Like other outstanding speculators, Michael Magas's early years were equally frustrating, with Magas losing money again and again, and his personal accounts all ending up in a big position. Thankfully, Magas found the cause of the error. He transformed himself into a professional killer in 1974 by a futures company, when it was popular to recruit PhD talents to work for the company's funds in exchange for money. Magas joined with bachelor's degree qualifications, relying on years of experience in data research and being appreciated for his record of winning the trend, and facts speak louder than words. Magas's record is impressive, the account began with $30,000 after several years, and then injected 100,000 yuan, a total of 130,000 funds, 10 years later the fund account rose to 80 million US dollars. Most of Magas's profits come from "Trinity" trading. His "Trinity" trading principles are:
1 ． The imbalance between supply and demand is the basic factor, indicating that the market will have greater fluctuations.
2 ． For chart analysis, the same signal must be issued.
3 ． The tone of the market should be in line with the trend of the market. For example, in the bull market, the bearish news can be ignored, and if it is slightly favorable to the rumors, it will rise out of the group.
Only when all three factors work together can you start to re-attack.
According to Magas, "the principle of the Trinity has remained unchanged for 50 years, and he still starts with chart analysis, fundamental analysis and market dynamics." When all the information is confirmed, he can attack, and he is convinced that any market transaction can be handled according to the above method.
Magas also believed that top speculators needed to rely on talent, the conditions given by God, that is, to be like a good musician. But to become a competitive speculator and make a living by speculation, he believes that by studying hard, he can also embark on a path to success. For speculators who often lose money and apprentices who are new to the industry, Magas gives valuable advice:
1 ． You can only lose 5% of your capital per trade, so you can allow 20 mistakes to be wiped out.
2 ． As long as the analysis is correct at the normal 50%, the profit will be profitable when there is wind.
3 ． A stop loss point must be set before entering the market. The stop loss point should be realistic, and there should be no stop loss in the heart of the self-deception, and there is no stop loss in the hand. The order to enter the market should be accompanied by a stop loss order to leave the market to ensure that the position is immediately closed at a price level. Even if it is only 5 minutes after entering the market, when you feel that there is danger, you must not hesitate to close the position, regardless of what others think.
4 ． Don't buy and sell too often, it's best to look at the right time to attack. The ability to wait for the opportunity to enter the market is the key to investor success.
Keep an eye out for the turnaround
Michael · Magas pays the most attention to the "Trinity" market entry conditions, in which whether the market tone and the market trend match occupy an important position.
For example, in the late 1970s, U.S. soybeans entered a bull market with severe shortages of stocks, and every week when the U.S. government announced the figures, it showed fairly strong export figures. In a word, when the supply shortage figures are announced, the price of soybeans is naturally inflated. At that time, Magas had a large number of good position contracts, and one day, the broker called Magas: Migao, first tell you a good news, the export figures hit a peak, soybeans rose, but at the same time to inform you of a bad news, you hold a good position did not collapse that is, did not increase the number of new positions. The market generally believes that the soybean contract will be suspended for 3 consecutive days, and Magas is deeply remorseful that he has not yet broken the position. The next day the soybeans did open with a limit board, after which the soybean contract appeared to be actively traded at the price of the limit board, and then, suddenly, the soybean contract turned back to fall, and Magas bought more soybean contracts as he wished, at which time Magas thought: Soybeans should be up and down board for 3 consecutive days to match the market news, strange! After a moment of contemplation, Magas thought that the market was unstable, and immediately notified the broker to throw out all the good position contracts of the seven, and backhanded the short, for a time Magas became a crazy big seller in the market, and the price of soybeans fell sharply, and Magas won a big victory. This battle fully proved that the news of good news came out, and the market trend could not make a corresponding upward trend, and it was safe to sell short.
When a futures expert asked Magas: "The good news is out, the market performance is not as strong as expected, so that you will give up all the soybean warehouses, turn to short selling, and win the full, is it unique." ”
Magas replied: "No, another case also occurred in the mid-70s, when almost all futures went straight up. One day, the upward trend was so strong that almost all commodity futures reached the limit board, and so did cotton. Curiously, cotton opened at a limit, then began to fall, and finally closed only a little higher than the previous day's closing, while other futures all closed with a limit. "The result was the highest price of cotton that day, and it will never be seen again."
That said, Magas pays close attention to the common ground between markets and markets, and if a market is performing very poorly, he will be careful to catch the opportunity to sell short.
Don't make a big deal out of it
Michael · An important precept of Magas is not to make a desperate bet. The lesson of excessive speculation impressed Magas. On the road to success in Magas, there was a Waterloo, and the profits from the small account have accumulated to $30,000 under the painstaking management. At that time, Magas thought that plant blight might reappear, which would cause Linmi to lose harvest. Wishful thinking bought the Linmi futures contract with all the money, and the result was that the army was completely destroyed.
In 1970, grain futures were once again on the move, when market rumors that plant wilt could once again hit the harvest of linmi, so Magas deployed properly. I believe other experts share the same view, in addition to the $30,000 won, Magas borrowed $20,000 from his mother and went all out.
At that time, he bought the highest number of contracts he could allow for $50,000, waiting for the rice and wheat to rise. At first, the ups and downs were small, until one day, the Wall Street Journal made the headline: "In the Chicago futures market, more plant blight can be found." "As a result, the price of Lin mi fell in a straight line after the opening of the market that day, and quickly fell to the stop board."
At that time, Magas was at the brokerage company. The $30,000 that came to the bottom was all gone, and the $20,000 borrowed from his mother was only $8,000.
The second similar lesson, Magas bought a timber futures contract with all his wealth, and due to the improper use of funds, the dream almost returned.
Due to the success of speculative splint trading, Magas believes that the shortage of goods will affect the timber market in the market where the shortage of goods rises, and in the case of victory, Magas forgets the lesson of speculative Linmi, and once again desperately bets, with the profit to buy the timber contract, he bought the timber contract at a price of $130. However, the U.S. government began to see the deviance of the splint market and decided not to let the history of the plywood rise and freeze the price repeat. The first of the timber contracts bought in Magas. The next day, government officials announced that they would severely punish speculators who speculated in high timber, the price of timber futures fell to $117, and the funds in the Magas account also plummeted to $4,000, and government officials repeated their determination to control prices for two consecutive weeks. While the funds in the Magas account can only maintain the minimum level of the position and the forced position to close the price is a line away, The Magas is restless, panicked, ready to give up the surrender at any time. While Magas was nervous, he regretted his stupid business. But in the end, the god of luck arrived, the government's perseverance to regulate prices failed to carry out, timber prices began to rise, and Magas received a profit of $24,000.
In the end, although it can survive safely, it will turn defeat into victory. But two important battles made Magas more careful to fight there, vowing never to repeat the mistakes of the past and never to make a desperate bet.
In the process of investing in futures, the use of funds is often more important. It is an important principle to divide the troops gradually and not to make a desperate bet.
Holding the psychology of gambling size into the futures market, not only will people ignore the basic factors behind the rise and fall of the market, so as to be lazy in analysis, resulting in analysis of the market by guessing, investment direction by inspiration, losing somehow, winning and not knowing why to win, the biggest harm of gambler psychology is to cause investors to use funds to make a desperate bet, and the desperate better may succeed even if occasionally, but in the end can not escape the fate of fiasco. This situation is common in futures trading. Because the desperate better will be greatly satisfied after the success of the first few times, he is more willing to continue to use the desperate method in the next transaction. And once the next transaction encounters bad luck, it is likely that the whole army will be destroyed, not only will the past cooking profits be spit out, even the initial old wood will be lost, and even more tragic will be due to the strong position and owe the futures brokerage company a sum of money.
To do futures trading, we must do what we can, not to bet desperately, and we cannot put all our life savings into it like a sticker. Because the market situation itself is not accurate, there is a possibility of large losses or even unable to extricate themselves. It is wise to invest 113% of the total amount first, and then increase investment when the market is clear and favorable. In times of market adversity, it is most necessary to prevent the emergence of a desperate mentality. As an investor, you should also set yourself a trading volume and self-discipline.
There is a wind to make the sails, and the winning money is won to the end
The most high meters. The lesson of Magas's heartache comes from a victorious battle. Due to the premature liquidation, Magas lost the opportunity to make huge profits in vain. Being bold enough to win is just as important as giving up a contract in a recent and early loss. Trying to take advantage of the opportunity to win huge profits and not rushing to cash out small profits is an important condition for long-term combat to win victory, and it can also avoid regret after the fact, resulting in a bad mood.
Magas said: "The battle of Sen Qian is not well used, if it is won to the end, how to make profits to fill the lost money."
In 1973, the United States announced that it was abandoning its price control program, the dollar exchange rate fell sharply, and the United States entered a period of crazy inflation. With an unprecedented upward trend, Magas speculatively entered the realm and became a constant general in the overall upward market situation. Magas inadvertently made a major mistake in a bullish futures market, not knowing how to sail when there is a wind, and the lesson is unforgettable. Soybean futures at the time, by 3 . At $25/bushel, Magas was in the middle of the rise, on impulse to close all the bulls, wishful thinking that soybeans would be bought again when there was a take-off, forgetting the teaching of Magas's master Xi Gundam that "unless it is confirmed that the market has reversed, you must not leave the market casually, and the winning money must be won to the end". After the liquidation, Magas witnessed the soybean for 12 consecutive days of up and down board stunned, overwhelmed, every day to the company, have to endure the master Tin Gundam continue to enjoy the profits of the soybean stop board, while he has to sit on the cold bench pain. The fact that going to work became an unbearable torture, gave Magas an unforgettable lesson. If you have a handicap in your hand, you can continue to ride the ride and enjoy the fun of winning money to the end.
There is a wind to make the sails, win money to win to the end! As the name suggests, there is a wind to make the sails, the original meaning is that when the ancient sailing ships sailed, when they encountered a tailwind, they had to raise their sails and move forward with all their might! When the wind is downwind, if you are not driving at full speed, what if you are not driving against the wind? In the same way, in the futures market, when the trend is warming up, when winning money, we must win and dare to hold all the way!
Indeed, when the city road is good, it is like pushing a boat along the water, if you can't let go, do you have to wait until the market is bleak and then stubbornly hold it? The reason for this is very simple, if the position of the profit is not well utilized, if it is exhausted, where is the profit to fill the operation of the loss?
Of course, it should be noted that there is a wind to make the sails, and the winning money is exhausted, not that the operation should be desperate!
There is a degree of progress
Since 1983, Michael · Magas found himself less brave than he had been and seemed to need to recharge.
He said guts are an indispensable condition. As a successful speculator, you must be brave, have the courage to experiment with new products, be able to accept setbacks, and even more need courage when things are adversity.
Magas believes that in order to understand their trading status, investors can draw daily charts of the profits of their accounts, observe the trend of profits, and understand their own advances and retreats, which is a feasible way. It is helpful for selling achievements, and the benefits are endless. When your profits are declining, nature constitutes a notable alarm sign. When you feel that the road ahead is uncertain and inconsistent, the best way to deal with it is to leave the market for a while and rest until you have regained your inspiration before joining the battle. According to past experience, there is no harm, and after a small break, the mind is clear, and most of the achievements have made good progress.
"Only by knowing how to rest can we understand work." Everyone understands this. When applied to the futures market, it is: don't roll in the market every day. The purpose of entering the market is to make money, the question is to soak in the market every day, can you make money every day?
Objectively speaking, the market is sometimes clear and sometimes unclear. When the market is rolling every day and the market is unclear, should you go long or short? From the perspective of effect, if you are buying and selling every day, if you have a sure battle to fight, and if you are not sure of the battle, you will end up gaining and losing equally, or even gaining more than you lose, becoming an empty busy and losing investment significance.
More importantly, there is the subjective level. Futures trading is a complex and onerous mental exercise that is first limited by a person's physical abilities. Man is not made of iron, and if he has labor, he will be tired. The human brain will not be so flexible, awake, and agile every day and all the time. In the state of fatigue, the brain will be numb, the accuracy of the judgment will be reduced, and the chance of making money will be reduced. If you are overly tired, your brain will become dull, confused, and prone to big mistakes. Rolling in the market every day is tantamount to "moths fighting fires and killing themselves".
As the saying goes: bystanders are clear, authorities are confused. Take a break at an appropriate time and observe the market trend from the side with the attitude of "no goods and one light body", which can not only relax the tight strings of your brain and recharge, but also objectively and calmly judge the situation and strategize the situation, so as to facilitate another battle. In this way, find the right time to make a deal once every three or five weeks, and you will not be physically and mentally happy!
Must be dictatorial
Michael · "The most common mistake most speculators make is to mistakenly believe that they can rely on the advice provided by experts to compete for the length of a day in a speculative market," Magas said.
"The most important thing for speculators is to have their own opinions, and consulting the opinions of other experts will only make them more and more rigid." In fact, many great speculators have special expertise, but they also have different weaknesses. Magas believes that by adopting too many people's opinions, the result will be a combination of personal shortcomings and shortcomings, and the consequences can be imagined.
Many experts themselves are not actually speculators who have actually entered the market, "sub-fish, anzhi fish music". Another disadvantage is that their self-confidence declines, and they form a fear of the end, so that their trading system can not be consistent, half-hearted, and eventually lose inexplicably.
Learn to be a minority in a down-to-earth manner. If your judgment of the market is correct, then . Most people's opinions will be at your behest. We must have our own opinions, and we must not be swayed by others, and the opinions of others can only be used as a reference. If you feel that the disk is showing that it is not good for your position, you can come out first and then observe. If a new position is opened, the position can be reduced appropriately.
The trading of futures is not guided by others, and the trend of commodities should form a long-term candlestick chart in their own minds. Without this "diamond diamond", don't take this "porcelain work". We must remember that trading in the futures market still depends on self-denial, and even the best opinions must have their own opinions, not blind. He is the general himself, and everyone else is just a staff officer.
In short, Magas believes that a point of hard work is a harvest. To get ahead in the speculative market, you must do your best, do your homework, and deploy carefully. There is no other shortcut to success.