Should traders follow their Trading system consistently

Beginner Questions
1

Do we have to always follow our trading system even if sometime it lags in creating current trading opportunities or sometimes diverge from it and take the trading opportunities we see?

Sometimes a clear formation appears in the charts and my trading strategy is lagging in giving me an entry signal and by the time it gives me a signal the price has already made a nice move.

After entering the market at that current price I start to notice some reversal patterns few moments later my stop gets triggered.

It does not happen like that most of the time but it does cost me because a trade that could have been a profitable trade is now a loss.

So sometimes should we just forget about the system we using and take advantage on what we see?

I’d like to hear your thoughts?

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2

Well, maybe that should be your strategy - or at least your process in identifying opportunities, as all indicators are lagging. Advanced traders, IMO, tend to rely on naked charts in the main, utilise support and resistance zones as their mainstay.

For example, I was shown just that when my norm would be to follow the existing trend. Whether the resistance level is broken through or a tracement occurs is an opportunity signal.

As chart patterns repeat themselves, but strength of waves differ, it takes years of experience to identify a ‘good’ probability of a winning trade.

GBP/CHF today at 12.30 BST on the Daily chart is a great example of whether the bullish trend will continue or is a forerunner to a major trend reversal - see also 4 hr chart for entry.

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3

Always follow your plan. If the plan indicates there are no opportunities right now, this is for a sound reason, so follow the plan.

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4

Backtest, backtest, backtest.

That’s what I say. But it must be with EVERY single entry signal. This way, you get an honest assessment of the strategy.

If your signals are coming in late often, and at the end of the month you’re in the negative, you gotta review your trades.

Go back and see where you entered, where you should have entered, overal what went wrong, and how you can improve.

Do that for as many losing trades as possible. You’ll probably notice a pattern.

This is where journaling is crucial.

Do you keep a journal?

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5

If it works, they can use it consistently

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6

That is exactly what I want to start doing I really like the fact that they provide good entry points and they don’t lag in giving signal.

7

Bear in mind, it’s not a complete solution, otherwise we’d all be millionaires. There are regular occasions where resistance lines are breached, and they then become the new support lines. Or price action just stays in a ranging zone for days, even weeks. Hence, indicators like RSI are not much use apart from confirming the trend.

The most profitable chart to read on possible S&R is the daily chart, then downtrack to the 4 hr to see if it is inline. Sometimes it won’t be.

best of luck.

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  1. Stick to Your Discipline.
  2. Lose the Crowd.
  3. Engage Your Trading Plan.
  4. Don’t Cut Corners.
  5. Avoid the Obvious.
  6. Don’t Break Your Rules.
  7. Avoid Market Gurus.
  8. Use Your Intuition