What i learned after years of studying , backtesting ,trading and etc… is that yes in order to make CONSISTANT PROFIT OVER THE LONG-TERM you must have a really clear system with all the essential parameters such as entry point , sl , tp and etc… but the problem is that the majority of people think that it’s all about the technical analysis and indicators and how to combine them to make a profitable system! NO that’s Wrong! your system needs an Edge that helps you to survive in the market , which cannot be done using technical analysis alone.
what you need is to find ways not to only improve your entry point on the chart but to improve :
- Your Profit Factor
- Better Avg. Win than Avg. Loss
if your system cannot provide a profit factor above 1.5 then just stop trading and look for a better system.
- Sharpe Ratio