Talk about high-frequency intraday trading: This is how top traders achieve high returns

Investors often say that the currency circle is the closest place to money.

The currency circle is accompanied by high capital dividends. Digital currency can be bought and sold on the same day, with long trading hours, 24-hour non-stop trading, and many trading opportunities. Digital currency aggregation trading platform 1Token onceresearchHowever, the intraday amplitude of most mainstream currencies exceeds 20%, and the trading volume of a single currency exceeds 5 billion. In the currency circle, 40% of intraday traders can achieve a monthly income of 50,000 yuan, and 70% of traders can achieve a monthly income of 20,000 yuan. .

On July 26, Odaily invited Gao Yu, an evangelist for intraday trading in the currency circle and a master of finance from Tongji University (net name "Bi Hanjiang"), and Yan Junjie, CMO of 1Token, to be guests in the Odaily Chaohua community to explain intraday high-frequency trading strategies. Escape the fate of "being cut".

First of all, I will take you to understand what intraday high-frequency trading is. Intraday high-frequency trading refers to the realization of T+0 trading targets, through technical judgments to buy low and sell high, to obtain price difference benefits within the day, and to maintain A trading strategy with a constant number of open positions. Intraday high-frequency trading can be divided into manual high-frequency ordering and quantitative high-frequency trading.

Intra-day high-frequency trading captures trading opportunities that can get rid of the cost of entering the market immediately after entering the market. If you cannot make a profit immediately after entering the market, you are ready to leave the market quickly. Because this trading method has a short market time, the risk of market fluctuations is relatively low.

Gao Yu's trading methods are mainly based on intraday ultra-short-term, combining volume and price, auxiliary bands and medium-to-long-term trends. Gao Yu has been engaged in intraday high-frequency trading since 2015. He has rich experience in intraday high-frequency trading of stocks, digital currencies and other targets, and is also responsible for building the intraday high-frequency trading team.

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The following is the record shared by the guests, organized by Odaily

Gao Yu took the lead in popularizing the professional terms and trading strategies that need to be understood for intraday high-frequency trading.

First, let me tell you about spot and futures trading and their differences.

Spot Trading

Spot TradingGenerally, you can only look at long positions and cannot short positions (one-way trading). There is no leverage, and no liquidation is involved. For example, stock trading is a spot transaction.

futuresIt can be short (two-way trading), margin system, leverage, risk of liquidation, and delivery date, such as commodity futures, stock index futures, and digital currency contracts.

The main differences between the two are: 1. Futures can be traded in two directions, and there is a possibility of profit when the target rises or falls. Spots generally only trade in one direction, and only gain profits when the target rises; 2. Futures generally have their own leverage, which will magnify losses and earnings.

lever

“leverliquidation

“liquidation"It means that due to the use of leverage, when the investment loses money, it first loses its own margin. When the loss reaches a certain level, the margin is all lost, and the position will be liquidated at this time. This is called "liquidation".

Taking the above as an example, the self-owned margin is 100,000 yuan, and the total investment amount of 5 times leverage is 500,000 yuan. When the loss reaches 10/50=20%, the self-owned margin of 100,000 yuan will be completely lost, and the position will be liquidated at this time . We can see that the relationship between the leverage multiple and the maximum loss rate of liquidation is: liquidation loss rate=100%/leverage multiple.

Of course, while leverage amplifies risks, it also amplifies benefits, which is a "double-edged sword".

Some basic knowledge of spot and futures will be shared so much first, and then I will add two knowledge points for you: K-line and handicap.

Let's take a look at the K-line first:

The K line is used to represent the summary of the intraday price trend of the target within a certain period.Any K-line contains four pieces of information about the target price: opening price, closing price, highest price, and lowest price. It is composed of solid part (cuboid) + upper and lower shadow lines.

The entity part represents the opening price and closing price of the target within a certain period. If the closing price is higher than the opening price, then the lower edge of the entity indicates the opening price and the upper edge indicates the closing price. And this stage is generally a price increase.

If the closing price is lower than the opening price, then the lower edge of the entity indicates the closing price, and the upper edge indicates the opening price, and the overall price decline at this stage.

The upper shadow line always represents the highest price in the period, and the lower shadow line represents the lowest price.

So as long as you know the opening price, closing price, highest price, and lowest price of the four information of the target price within a certain period, you can draw a candlestick chart based on this information.

As for the color of the K-line, generally domestic targets (A shares, futures) rise in red and fall in green. But U.S. stocks and digital currencies are just the opposite, green means rising and red means falling.

For example: the K-line for a period of time is drawn like this:

Then let's take a look at the handicap, the following picture is an example:

Handicap refers to the list of quotations formed by sorting order orders issued by buyers and sellers in the market according to their own prices and quantities according to certain rules. Handicap is generally composed of order (sell 2, buy 1...), price and quantity.

Therefore, all the orders that can be seen on the handicap are orders that have not been executed. They are the willing quotations of both buyers and sellers, waiting for the appearance of the counterparty to close their own orders.

And what are the rules for commissioned quotations?Prioritize price first, then time priority.

What is price priority? For example, in the handicap on the picture, why the seller’s first price (sell 1) is 26.20 is because this price is the most profitable for the seller’s other quotations, and it is the best for the counterparty buyer, so the priority is given to the price According to the rules, he ranks in the first gear of the seller, that is, he sells 1, and the selling price of 26.21 is not as good as 26.20, so he ranks in the second gear, and so on.

In the same way, the buyer's price of 26.19 is the best price for the buyer to make the most profit and at the same time the best price for the seller, so 26.19 is the buyer's first bid, that is, buy 1.

The time priority is very simple, that is to say, when the quotations of multiple people are equal, they will be sorted according to the time of the entrustment. However, this order is generally not directly observable on the handicap.

Regarding handicap, I will share with you a knowledge point,What is taker order transaction (also called taker) and pending order transaction (also called maker).

Still taking the previous market as an example, suppose you want to sell 41 lots at a price of 26.17, what should you do? You are the seller, so you need to see if there is an order in the buying order that matches the price in your heart. You will find that buying 4 lots at 26.19 and buying 37 lots at 26.18 is a more favorable selling price than your price in mind, so you will sell them without hesitation, and it happens that 4+37=41 lots are sold, the prices are respectively For 26.19 and 26.18. At this time, you have made a taker action, and you are taking the initiative to take the existing orders on the market. This active transaction method is called a taker transaction. And the buy 1 and buy 2 that were sold by you were passively traded by hanging on it before, so for the buy 1 and buy 2, the transaction method is called a pending order transaction (maker).

The reason for distinguishing taker orders from pending orders is that in digital currency transactions, the handling fees generated by the two different transaction methods are different. taker) to be cheaper.

Basic knowledge Finally, let me tell you that there is another very important rule in digital currency contract transactions called "Settlement currency standard”。

Currency standard refers to: 1. The margin required to make a contract is served in the contract currency. For example, for a BTC quarterly contract, the margin needs to be paid in BTC, not USDT or other currencies. 2. The income obtained by the exchange is settled in this currency. For example, the profit obtained from intraday trading of EOS contracts is expressed in EOS.

Due to the regulations of the currency standard, there will be a problem, that is, the profit and margin itself are digital currencies, and there is a risk of price fluctuations.

In order to avoid this price fluctuation risk, day traders generally adopt two methods:

1. Financing coins. Borrowing currency and repaying currency naturally does not need to bear the risk of currency price fluctuations, but there is a cost of financing interest

2. Use contract empty orders to offset the long positions of the margin to avoid the risk of price fluctuations. And this method is used more because of its convenient operation.

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Intra-day high-frequency trading refers to the trading strategy of buying low and selling high through technical judgment on the basis of being able to realize the T+0 trading target, obtaining price difference income within the day, and keeping the number of positions unchanged.

Key point 1: Pursue profit from price difference within the day, without generating overnight positions

Key point 2: After the transaction is completed, the number of bottom positions should be kept equal to that before the transaction.

For example, if the original bottom position is 10 BTC, if there is a transaction of buying 2 BTC today, there must be a pairing transaction of selling 2 BTC. The intraday transaction profit is the price difference income of these 2 BTC buying and selling, regardless of the risk of the original 10 BTC price fluctuation. Therefore, the general intraday profit and the bottom position profit are calculated separately. The bottom position profit and the intraday profit belong to two different strategies. This time we mainly discuss the intraday trading strategy.

knowledge development: Although the stock is a T+1 mechanism, the stock can also realize T+0 in a disguised form. For example, if you buy a stock bottom position on T0 day, although you cannot sell it on that day, you can sell the bottom position of the previous day on T1 day. With enough long funds, you can realize T+0 trading from T1 day. The disadvantage is that : 1. The number of shares that can be traded on T+0 is limited (the number of shares opened on T0 day), 2. The bottom position built on T0 will have the risk of price fluctuations

Since the digital currency itself is a T+0 trading mechanism, it is more suitable for intraday high-frequency trading.

There are four main characteristics of intraday high-frequency trading:

• Fast in and fast out of positions, short holding time, generally no more than 5 minutes

• Pursue price difference income in a short period of time, with a higher winning rate

• Able to stop profit and stop loss in time

• The number of transactions is large, and the daily transaction volume is large

Here I want to explain,High frequency ≠ frequent trading, but to highlight the short holding time, which can be understood as ultra-short-term.Since the high-frequency trading strategy has certain requirements for price fluctuations over a period of time, when the market volatility is insufficient, the high-frequency trading strategy within the day is often ineffective. Therefore, in daily trading, it is often necessary to keep short positions and wait for the opportunity to intervene.

Generally, the targets suitable for intraday trading need to meet the following three conditions:

• T+0 trading system

• Large amplitude (can cover transaction costs)

• Large trading volume (beneficial for timely stop profit and stop loss)

Let's talk about the specific trading strategy of intraday trading:

Any trading system is nothing more than three major parts: ① opening timing ② stop loss ③ stop profit.

The timing of opening a position is to decide when to enter the market, and the stop profit and stop loss is to decide when to exit the market. As long as these three pieces are clear, a trading system framework for intraday high-frequency trading strategies will be built, and then it will be tested in practice.

Let's first look at the basis for judging the entry point of intraday high-frequency trading. There are basically three methods:

• linkage method

• Convergence pattern & heavy volume breakthrough

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Method 1: linkage method

It refers to judging the trading direction of the target based on other targets that are related to the trend of the trading target and changed in advance, similar to "drawing a ladle by comparing the gourd". This method is simple and easy to use, but sometimes the reference target is not unique.

For example, many intraday traders trade OKEX’s EOS contracts, but their linked reference targets are generally based on:

1. BTC contract of OKEX

2. EOS spot on OKEX

3. Binance’s BTC spot

And practice has proved that the BTC spot price of Binance generally changes a little earlier.

But this method requires attention,Generally, this method is more effective in the sudden rise and fall of the market, and the usual unlimited random walk market should not be copied mechanically to cause unnecessary losses.

You can see a few examples:

Binance’s BTC spot price fell first at 7:02, and then 2 minutes later, the EOS quarterly contract fell along with the trend. If you refer to the linkage target, the EOS contract can open a short order in advance. field.

In the same way, the linkage strategy in the case of rising, the EOS contract follows the rise of the BTC spot.

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Method 2: form convergence, large-scale breakthrough

This strategy refers to the observation of the price trend pattern of the target, paying attention to the convergence pattern, entering the market quickly when the volume breaks through, and taking profit and leaving the market immediately after the volume can be released and a wave of rising ends. strategy out.

This strategy is applicable to most targets, but the convergence pattern is changeable, and the judgment of the pattern requires a long period of trading experience accumulation to better understand.

Points to note for breakout patterns:

• Generally, there will be a process of convergence and quantity energy accumulation

• The moment of breakthrough is generally accompanied by an increase in trading volume

• The breakout direction is the continuation of the original trend

• The purpose of mastering this pattern: to follow the trend and obtain greater profit margins

The picture above is a relatively standard method of convergence and breakthrough. The breakthrough at 1 takes a simple way of stepping back and then continues to break through. The breakthrough at 2 is a breakthrough after "box convergence", and the breakthrough at 3 is a "flag" Convergence" after the breakthrough. For novices, it is recommended to operate each wave separately. The entry point is the breakthrough point of the previous high, and the profit stop point is the end of a wave of rise. Try to "get one sum for one sum", and don't try to get the maximum profit by taking several waves of one sum in succession. Intraday high-frequency pays attention to high winning rate and low profit, and obtains considerable profits through the accumulation of trading times under the premise of ensuring high winning rate.

This picture is also a relatively standard platform convergence breakthrough. The entry point is the breakthrough point of each platform. As for how to accurately judge the breakthrough point, generally the breakthrough point will have obvious volume energy release, and the breakthrough can be accurately judged in combination with the handicap Point entry.

Next, I will show you a few time-sharing charts of digital currencies. You can simulate the entry and exit points according to the strategy of convergence and large-scale breakthrough.

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Method 3: Do reversal, commonly known as "bottoming out" and "blocking"

This method refers to the strategy of opening a counter-trend position after a wave of sudden drop or rise, and waiting for the price to rebound (bottom) or step back (cap) and quickly take profits.

Notes on this method:

• The sudden rise and fall must be large enough, and only when the step back and rebound can there be profit margins

• The essence is a kind of contrarian operation behavior, the profit margin is limited, you must not love to fight, fast in and fast out, and close when you see good results

• Try to use method 2 to do homeopathic trading first, this strategy is an alternative strategy.

• In case the entry point is not the "turning point", stop the loss first and then start again. It is not recommended to add positions with floating losses. The risk of adding positions with floating losses is extremely high in extreme market conditions.

The figure below lists some trend legends with relatively large reversal profit margins, but remember that such trends have a small probability, try to follow the trend as much as possible, and this trading method is assisted.

Stop loss strategy

Stop loss strategy

Let's first look at the importance of stop loss.

Why does the intraday high-frequency strategy have a high winning rate? It is precisely because of the existence of the stop loss strategy that the loss of each transaction is controlled within a certain range, and because the ultra-short-term strategy is more accurate than the long-term strategy, in the case of controlling the loss, only one transaction is required. Or a few correct trades can cover previous losses and allow the profit curve to rise steadily. Don’t take any chances about the stop loss: it is wrong to carry orders maliciously and earn more, and it is right to miss the stop loss.

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1. Absolute stop loss position

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2. handicap judgment

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How to take profit

The first method is to refer to the linkage target. If your entry basis is based on the changes of other targets, then when the reference target starts to reverse, your trading target should also take profit and leave the market immediately.

The second method is to refer to the market order. For example, if you are long positions, and the buyer’s advance order in the market order is increasing a little bit at this time, and the price is rising step by step and rising steadily, it means that the transaction is correct. But suddenly when you find that the price is at A certain position has repeatedly competed, and the buy orders have gradually decreased. This can be regarded as the end signal of the rising wave, and then take profit and leave the market. The interpretation of handicap is applicable regardless of stop profit and stop loss, and it is also a very important part of intraday trading.

And compared to stop loss, stop profit is less important. Although earning less and losing more are both losses, obviously earning less has a much smaller impact on traders' hearts than losing more. After all, earning less is also earning.

In this way, we have shared with you the timing of entry, stop profit, and stop loss. Finally, we will sort out the high-frequency trading ideas of digital currency within the day.

That is to say, the first step of the general intraday high-frequency trading idea is to first learn to judge what kind of market the current market belongs to, and then choose a trading strategy according to the current market price. Swiping orders is the main focus. At this time, the position should be light, and the profit expectation should be lowered. Maker-based order swiping should be used to save handling fees.

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The following is a free community Q&A session:

Q1: Can you systematically introduce what kind of software and services are needed for intraday high-frequency trading?

Yan Junjie:In my opinion, whether it is a novice or a professional trader, regardless of the trading strategy, the trading behavior can be divided into three stages: pre-trade, middle and post-trade.

Before the transaction, it is more about preparing for the transaction.

1. Channel service requires a platform like 1Token to provide accounts, transaction channels and preferential rate basis to help save handling fees.

2. Financial support, because whether it is currency trading or contract trading, there will be risks of currency price fluctuations. If third-party financing such as 1Token is used to finance currency, one is to avoid capital risks, but to reduce the pressure on capital costs.

3. Technical support, especially for investors who are not familiar with market rules, can provide simulated transactions before trading. Familiarity with trading rules in a simulated environment can help investors adapt to the market faster.

4. Information service. Only when traders know the market fluctuations at the first time, can they enter the market early and gain profits. Especially like the 24-hour trading in the currency circle, the market will come without knowing when it will come, and the market warning is particularly important. Whether it is through APP, trading software or telephone, traders must be notified at the first time, so as not to miss the market.

In trading, it is more of an aid to trading behavior.

Whether in terms of market liquidity, speed, or stability. Because of the high frequency within the manual day, traders are based on changes in market conditions and past trading experience to capture as many trading opportunities as possible, lightning trading, gaining price differences, and accumulating small amounts to achieve the goal of overall stable profit. A turnover of one million to ten million RMB. When the market is good, a professional trader on the 1Token platform can even trade 100-200 million RMB in a single day. Therefore, for the liquidity of the market, the speed and stability of the trading software are very high. For example, the delay of the market, the order and the transaction order should be low, and the shortcut key should be supported to place the order. The system performance should be stable. It can also help investors to place orders smoothly at any time.

After the transaction, the transaction review is also a part that cannot be ignored.

1. Review the previous market to gain a certain understanding of the market trend;

2. Review the trading behavior at that time, learn again, accumulate trading experience, and consolidate your own trading system. Through the review, if the same situation occurs again, it is your chance to make a profit. If you lose this time, you will do the opposite next time. When trading, you may not be able to see which transactions have been reversed, but you can see it clearly after the market. Restoration is very important. So a good software also needs to help traders to review the market intuitively and visually by combining K-line and entry and exit points.

Q2: For novices or novice users, how do you suggest them choose the software they need? What points should novice users pay attention to when choosing software?

Yan Junjie:For novices or beginners, there is no systematic trading system. So before trading, you need to choose a software or platform that can help you grasp a lot of information. Whether it is from an information platform, a community platform or a documentary platform, the core is to know which targets to focus on, and when to buy and when to sell , collectively referred to as investment advisory services. This is what novices and novices pay more attention to. They need to look for software or platforms that can integrate multiple product forms, whether it is information, semi-automatic trading tools, documentary communities, big V live broadcasts, order chat rooms, or project communities.

Secondly, it is necessary to judge whether the financial products of this software or platform are complete, whether the depth is large, and whether the cost is low enough. There are only 58 coins listed on the three first-tier exchanges of Huobi, Binance and OKEX at the same time, but there are nearly 2,000 coins listed on one of them or on quasi-first-tier/second-tier exchanges. If the currencies of overseas exchanges are added, the magnitude difference will be too great. Therefore, if a novice wants to make a certain new coin, but this software does not have it, it will not be able to achieve the purpose of convenience and cost saving.

Finally, I think the ease of operation of the software is also a consideration. Novices and Xiaobai are not deep in trading or currency circle transactions, so in addition to investment advisory services to make up for information asymmetry, software is also needed to be simple and easy to operate to help novice Xiaobai get started quickly.

Q3: Can you provide some easy-to-learn stop loss strategies?

high rain: The simplest stop loss strategy is like the absolute stop loss method I just mentioned, setting an acceptable maximum loss price or ratio by yourself.

For intraday high-frequency trading strategies, a more flexible stop loss method is to stop loss according to the language of the market.

To sum it up:

To sum it up:

1. The best result, the transaction is correct, no stop loss is involved at this time, but if the correction of a wave of upswing exceeds 1/3 of the wave's increase, you can consider taking profit and leaving the market.

2. Although the judgment of the direction is correct, if you encounter a false breakthrough and the floating profit has not been realized, then when the price returns to the breakthrough position again at this time, you should also decisively stop the loss

3. In the worst outcome, there is no stop profit when there is a floating profit, and no stop loss at the breakthrough position when the price returns to the breakthrough position. Luckily, the transaction has already incurred losses, so the last line of defense is the absolute stop loss position you set , this is a trading discipline that must be followed.

Q4: What is your opinion on the divergence of indicators?

andMACD、RSIandCCIThey allow investors to use the divergence function of these indicators to predict the risk at the head and the buying opportunity at the bottom, but the selected time parameters should be appropriately extended.

high rain: First of all, I would like to say that all indicators are actually lagging behind, and they can only provide a certain auxiliary effect. You must not rely solely on indicator signals to make trading decisions.

The indicator deviation signal is often the top or bottom of the prediction stage, but whether it is really confirmed the top or bottom often needs to be combined with more information to make a comprehensive judgment.

However, in general, the indicator information corresponding to a strategy with a longer period will be more reliable than that of a strategy with a short period. For example, the accuracy of deviation at the weekly level is often greater than that at the daily level.

And it is not recommended to refer to too many trading indicators. The information of different indicators often conflicts, making traders at a loss. Generally, it is good to use a few more classic indicators, such as MACD, KDJ and so on.

In short, the deviation of trading indicators does have certain reference significance, but it must not be completely relied on indicators.

Q5: What do you think is the most important thing in trading?

Gao Yu:From a technical perspective, the most important thing is to "follow the trend". Some traders like to speculate on the top and bottom. This is a very undesirable behavior. Trade according to the signal given by the market, and don't mix any subjective emotions in the transaction.

In addition to the technical level, character and mentality are also very important, especially the degree of compliance with trading discipline and the ability to adjust one's own mentality. In fact, mentality and disciplinary compliance complement each other. Generally, large losses caused by failure to abide by trading disciplines are caused by an imbalanced mentality.

There is also persistence and self-confidence. No matter how powerful a trader is, it will not be smooth sailing. Most successful traders have experienced the process from loss to profit.

But it is a pity that the vast majority of traders did not persist until the day when they honed their skills to make stable profits, they denied themselves halfway and gave up.

Q6: What are the similarities and differences between trend trading and intraday trading?

Gao Yu:Let’s talk about the similarities first. The similarities are basically the same trading logic, such as pursuing trend-following trading, and some trading techniques, such as breakthroughs, linkages, and forms, are all common.

As for the difference, there are two main points: First, the strategy cycle is different. Intraday trading focuses on ultra-short-term trading and has a higher winning rate, but the single profit is limited. Trend trading tends to hold positions for a long time, and the winning rate is relatively low, but the profit margin is greater.

The second is that the amount of information referred to in transaction execution is different. Since intraday trading is ultra-short-term, it basically only judges the trading direction based on indicators such as market opening, average price line, and time-sharing chart, which are relatively micro and have rapid feedback. However, since trend trading has a long holding time and wants to gain more profits in the future, it will refer to more macro information such as fundamentals and even the economic environment. From this point of view, trend trading is more difficult than intraday trading.

Q7: Can you explain how to manage positions in intraday high-frequency trading?

high rain: Position management should be judged according to market conditions. If the current trading stage is a shrinking and volatile market, then you should appropriately lower your position and focus on profiting from the price difference by swiping orders; if you encounter a swing market such as a breakthrough in heavy volume, due to better liquidity, it is more convenient to stop profit and stop loss, and If the volatility is large, you should decisively increase your position at this time to strive for more profits.

In fact, the position is also related to one's mental capacity, try not to let the size of the position affect one's intraday judgment.