what is a trading system? can somebody explain me what a trading system is and how that works?
what are the parameters and what is a trading system supposed to do?
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Hi DE!
A trading system is a totally automated Bot that is designed to save one having to strain any brain cells whilst earning a consistent huge profit covering one’s villa, car, gambling, and other essential living expenses.
It is based on previous price movements and the assumption that the same patterns will continue ad infinitum whilst one gets on with the more important things in life.
There is only one minor problem, if one can even call it that, it doesn’t exist.
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Hi there. Think of it as your set of guidelines and principles in your trading that you adhere to ensure that you trade responsibly with limited risk of losing capital that ensures sustainable financial growth. It determines the financial instruments to trade, the type if market conditions and on which days to trade in, the duration of your open positions in the market, position sizing for each trade, trade expectancy projections, risk reward ratios, entry and exit rules, stop loss and take profit levels, risk management rules and record keeping of winning and losing trades and historical price observation so that you measure performance (journalling).
It is your memorandum of incorporation, your bible, your law on trading that keeps you goal driven and accountable to manage your capital as best you can whenever you trade. It has entrenched general rules that cannot be deviated from that is unique to your trading style and personality immune and independent to external interferences and opinions on the markets. It is your objective standard and lays the foundation for your trading decisions.
A stratyegy must ensure that you grow as a trader - sustainable growth to move you closer to becoming part of the 10% of successful retail and professional traders in the global markets.
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hello Manxx! thank you for your awesome reply!
so a trading system is some sort of unicorn? most beautiful horse that in truth doesnt exist? then why do i constantly hear “trading system” here and “trading system” there? everyone looking for some trading system of others or trying to develop their own trading system? people talking about their trading system which makes great profits if you copy it and they offer it for free?
thank you for your awesome reply ABF!
so once the rules have been set they cant be changed anymore? a fixed set of rules to a ever changing condition?
they say no market movement is like the other, the conditions are always unique. so a unchangable fixed way of doing things can help you in a ever changing environment?
You will never risk implementing fundamental changes to your system that causes consistent draw downs to your portfolio or account. Your trading plan may even have different strategy’s and rules for different market conditions. The idea is not to make major changes in hindsight and compromise the trade expentancy of your system. A long term win rate can turn into prolong losing streaks and consistent loss of capital. Look at the bigger picture and treat your trading like a business. Changes to any system should be for strategic reasons and not merely to rake profitable trades whenever you see opportunities but it should yield longer term high probability success trades.