Trading in the fast-moving futures market is like driving on a highway, with the floating profits and losses of your account going straight up and down, sometimes so fast that you are overwhelmed. In such rapid fluctuations, human greed and fear are mercilessly magnified and punished by the market.
To cope with this market volatility and to survive in the futures market, investors need to establish their own "rules of the road" - trading rules - when engaging in futures speculation, just as they need to have traffic rules.
Trading rules for futures are a set of trading systems that have a theoretical possibility of absolute profitability and have been tested in practice. For example, in the trading rules, when the market appears what kind of conditions they will enter the transaction, what kind of conditions will appear to exit the wait and see; conditions are met, then decisive intervention, conditions do not meet the decisive exit.
If an investor violates the trading rules, it is like violating traffic rules in a car, you may get lucky this time, but you may not get lucky next time. If an investor gets lucky in the futures market and violates the rules, one fatal mistake can dismantle an account and sweep the investor out of the market. This is the cruelty of the futures market.
So the futures market is also the fairest of markets. Profits are the market's reward for those traders who are not greedy or fearful and who adhere to the rules of trading, while losses are the punishment for those who go along with human weaknesses - greed and fear - and have no rules. The punishment for those who trade with human weaknesses - greed and fear - without any rules.
Because of human weaknesses, it is very easy for investors to make bad trading decisions in the constantly fluctuating futures market because of their own greed and fear. Even if fatal mistakes do not occur, the number of general errors can be quite alarming as small losses accumulate and can drag an account into the abyss of ruin.
The role of trading rules is to restrain a trader's emotions, stifle his human weaknesses and regulate his trading behavior. Therefore, trading according to the rules will not only avoid fatal mistakes, but will also increase the winning rate of trading, so that the capital account can achieve stable growth under the premise of safety.
Trading rules are a talisman for survival in the futures market.