Trading Act Key Summary and Principles: The ‘Low Volatility Long Position’ Strategy

Trading Act Key Summary and Principles: The ‘Low Volatility Long Position’ Strategy

Hello, I’ve been steadily sharing information about trading through my Facebook posts, but I’ve received the most questions from people who are curious about the overall trading method. This article is a clear summary of the trading principles I have established over my long experience and the thinking process that led to them.

1. Investment Philosophy: A Combination of Leverage and Volatility
   My buying and selling method was inspired by the principle of real estate investment. The fundamental reason real estate can make a big return is the combination of ‘low volatility’ and ‘high leverage’.

The same is true of the futures market. Futures already have inherently high leverage. So, to safely leverage this high leverage, you must only participate in the market when there is low volatility.

Dangerous Combinations: High Leverage + High Volatility
This combination gives rise to a “super jackpot” or a “crop,” but the more you repeat it, the more likely it will end up being a statistical “crop.” Maintaining a position in a large unpredictable movement inevitably exposes you to liquidation risks.

Safe Combination: High Leverage + Low Volatility
It aims for stable profits by selling only in less volatile sections.

2. Exclusion of “Short Position” and reason for preferring “Long.”
   When analyzing market movements, short positions tend to show greater volatility than long positions.

Long position (buy): It’s a relatively low, stable, and profitable section due to a lot of slow, little increasing sections.

Short Position (Sold): The sharp drop is much more volatile than the modest gains in long positions.

Thus, in order to minimize volatility in a high leveraged environment, short positions are excluded in principle, and trading only with a buy (long) focus.

3. Summary of Key Conclusions and Trading Principles
   My trading law determines whether to enter the market based on only one key indicator of “variability,” and the whole thought process is compressed into one conclusion and four principles.

Conclusion:
Only long positions when the VIX index is low.

Four major trading principles:

1. Long Only: Short positions are not traded in principle.
2. VIX Index Criteria (Volatility Filter): Enter the buy position only when the VIX index is below 16. (Wait-and-see if it exceeds 16)
3. Event Avoidance: On the day of economic data release or corporate earnings release, the trading is completely off as it becomes highly volatile.
4. Sizing Control: Transact as few as five based on Nasdaq Mini (NQ) to thoroughly limit and manage position sizes.

These principles contain my firm commitment to only select and participate in low-viscosity market conditions in order to operate high-leverage products safely like the “magic of welfare.”