Is it already a trading system and what time frame to choose?

“What time scale is best for me? Once I figure something out, I still jump from window to window and get lost. How do I get it under control? I have worked out a MM, I have 2-3 setups that I use. Can this be called a trading system yet?”

Is it a trading system - both yes and no. I personally would not call it a system yet. What’s more, I would limit the sets to one. The best one. And if you ask what frame to choose, it means that there is no system! If there was, there would also be an answer to this, because a trading system (that is a set of rules for analysis, entry, management and exit) should provide it at the very beginning of its development.

What is the recommendation here? Well, it needs to be refined. How? Here it all depends on what trading system we are trading :slight_smile:

For example, when we have a trend system - we first check what is the higher trend (from a higher TF). We enter the lower frames only when the trade is executed. The point is to enter as precisely as possible without trading against the trend (!) on the higher time frames, so as not to enter under some resistance, etc. You need to be aware of what is happening in the market, you need to have a perspective. Further, you can manage your position both from low frame and from higher ones.

So, which scale should you choose from the point of view of trading psychology?

There are those who feel comfortable with weekly or 4-hour scales, and there are those who prefer minute scales. Answering the questions can help in your choice:

  • What are your time capabilities (how much time and at what time of day).
  • The second criterion to consider: when do the signals occur in this system - if they occur during the day session, and you are working at that time, then this must necessarily be taken into account.
  • The third thing - are you able to withstand a position on the market for many hours? For many it is a nightmare (for me too :), because nothing happens there (e.g. 18 hours in consolidation)! On the low TFs everything happens faster, but here in turn requires a greater tolerance for stress and risk.

To sum up - this “system” requires refinement. What and where we analyze, what information is needed to make a decision. You need to prepare a “checklist” and a book of plays. You need to know what you are doing and when. Without this it will be very difficult to develop a trading system.
The mind does not tolerate uncertainty, especially when money is on the market. The mental pressure is enormous and the possibility of making a mistake increases.

“I have a probably trivial question, but for me very important. I try to trade on candlestick patterns based on 15-week averages, oscillator, % SL and TP. I’m coming out on top. But can this be called a trading system?”

I wouldn’t call it a system. Write down all the rules for yourself. Do historical simulations, a minimum of 40-50 signals backwards on the instruments you will be playing. See what and how it works, test it. This is extremely important! The more sweat on the training ground, the less blood in battle :slight_smile: The more familiar you are with the system, the less stress, volatility and uncertainty in the market. Why experience UNNECESSARY pressure?

You need to test, have a “cheat sheet”, a book of trades, written down the rules of entry, management, exit, what kind of analysis you need to do. You also need to go through a number of trades. All this so that when you enter the market, you do not have doubts and hesitation.

Now you will say “but you don’t know which way the market will go, so doubts are normal”. Yes and no, because if you understand what the market and the trading system are about, there should be no doubts. In each situation you should know how to react. And a good system should answer this.

What is the point of trading if doubts come from not knowing how the system works or if it works at all? A well-tested system is a matter of statistics, or probability.

Doubts with an untested system are natural and even desirable, because they protect against stupid things. Only doubt with a proven system is something to work on.

This is the way to get rid of emotions in the market. This is the fastest way to profitability. Good foundations are essential.

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Good useful information

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Very interesting questions! :blush: Are these from some of your students? :open_mouth: Cause I feel like a lot of newbies could really relate to them. Haha. :blush:

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Sort of. I learned the problems from beginner traders and found the solutions from the professional traders I worked with.