Written by Hong Baoshan
XU Guohua, known as the 'Trading Doctor', once made a profit of five million during the stock market crash in August 2015, then invested nearly 20 million more. However, due to a miscalculation, he lost a large sum. He believes many investors misunderstand futures, which should be used as a risk-hedging tool rather than a high-risk investment.

Xu emphasizes that the leverage principle of futures allows investors to control large positions with small amounts of money, creating both risks and opportunities. Good returns require effective risk management, and investors need to change their perceptions about shorting and learn to judge market trends.

In addition to studying commodities, designing a solid risk management plan and understanding one's psychology are crucial for success. The art of stop-loss isn't just a strategy but a necessary psychological quality. In futures trading, knowing when to take a loss can open new opportunities and prevent losses from expanding.