Many contract traders believe that "don't put all your eggs in one basket," so they trade dozens of varieties at the same time, trying to reduce risks through diversification. However, the reality is that over-diversification can lead to scattered focus, with only a superficial understanding of the volatility patterns and fundamentals of each variety, ultimately resulting in a situation where one loses out by trying to do too much at once, akin to "casting a wide net but suffering comprehensive losses." The key to long-term profitability in contracts is not blind diversification but rather precise focus—focusing on a few familiar varieties, clear strategies, and distinct opportunities, establishing an information advantage through in-depth research.
Focusing on varieties is at the core of the focusing rule. The contract varieties in the market are diverse, with countless targets subdivided under major categories such as agricultural products, metals, and energy. The fluctuation logic of each variety is entirely different, and the extent to which it is influenced by macroeconomics and supply-demand relationships varies greatly. Even seasoned trader Wang Lu focuses her trading core on commodity options, prioritizing familiar trending varieties such as PTA and caustic soda. For retail investors, the best choice is to focus on 1-3 major contracts with good liquidity and clear trends, deeply studying their fluctuation patterns, key support and resistance levels, and even tracking the fundamental data of related industries. When your understanding of a variety far exceeds the market average, you can accurately grasp opportunities in fluctuations and avoid risks.
Focusing on strategies can make trading systems more certain. Many retail investors use trend-following strategies today, try oscillation strategies tomorrow, and then follow the trend to do arbitrage the day after. The chaos of strategies directly leads to uncontrolled trading behavior. In contrast, traders who focus on a single strategy can continuously optimize parameters through long-term practice and review, allowing the strategy to form a high degree of adaptability with market conditions. For example, trend followers can focus on clear signals such as moving average crossovers and breakout patterns, while oscillation traders focus on opportunities for rebounds at support levels and retracements at resistance levels. Wang Lu's trading system is centered on a selling strategy, deeply cultivating around three major dimensions: timing based on volatility, variety selection, and position gradient, ultimately forming a closed loop that combines profitability and safety.
Focusing on opportunities means giving up the 'anxiety of missing out'. The market has countless seemingly enticing trends every day, but the vast majority are 'pseudo-opportunities'; blindly chasing them will only increase trading costs and the probability of losses. Long-term profit earners understand that 'one should only earn the money they can understand.' They actively filter out opportunities that do not align with their strategies, and even if the market truly rises, they will not feel anxious about missing out. This focus on 'what to pursue and what to forgo' allows traders to maintain a calm mindset and avoid emotional trading. As trading philosophy says, accepting that 'missing out is the norm' enables one to have sufficient energy and funds to seize true opportunities when they arise.
From focusing on varieties to focusing on strategies, and then to focusing on opportunities, the essence of the contract profit focusing rule is essentially a form of 'subtraction thinking'. In a market overwhelmed with information and flooded with opportunities, learning to do subtraction and giving up those opportunities that do not belong to oneself is the only way to concentrate limited energy and funds on fields that can generate certain returns. This seemingly 'conservative' choice is precisely the core code for long-term profitability.
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