POWERFUL TRADING SYSTEM – Every trader would want to have a strong trading system, in the sense that the system has a fairly high level of accuracy, so that hopefully it can still generate large profits. I don’t think there are traders who don’t want to make big profits from their trading activities. If not, players can use cards as a game. But also a player wants to win the game.
A strong trading system should not come from a trader with decades of experience. Of course, high flight hours help someone to act. Therefore, it is natural for a veteran to create a superior trading system. What I want to convey here is; New traders may have three or four years experience and can develop profitable trading strategies or profitable trading systems. You can become a member of the Youth Merchant Group.
A strong trading system is a trading system that can maximize trader profits. But don’t stop there.
I have made an article about the relationship between the trader’s character and the trading system he will use.
The strongest system in the hands of the dealer does not have to have the same effect when used by other traders because the system may not match the character of the trader who uses it.
Therefore, we can only use the trading system effectively if we use a trading system that truly reflects the nature of our trade.
Keywords are characters.
Thus, the complete definition of a high-performance trading system is a trading system that is tailored to the character of the trader so that it provides maximum benefits for traders.
Get to know and determine your trading style
Are you a daytrader?
Are you a scalper?
Or are you a long-term trader?
A POWERFUL TRADING SYSTEM This style definition is important because it must match your character again. If you are the type of person who is impatient, then it might not be a long-term trader. Conversely, you are less likely to choose brokers if you really don’t like wild swings. Determining this style also determines the next step.
Choose the analysis tool that you like and master
Remember these two keywords: like and master.
For example, technical indicators
You can like certain indicators when you know how to use them.
You also need to know where the strengths and weaknesses of the indicator are.
I don’t like any indicator just because you have seen someone use it well and profit.
Remember that you are acting here and it is your full responsibility to do what happens to the capital you manage.
Therefore, you really need to understand what you are going to do.
As I said before, each technical indicator has its strengths and weaknesses.
Therefore, you must master other indicators that can cover the weaknesses of the first indicator.
This second indicator must also have advantages that do not belong to the first indicator.
For example, stochastic, which can give a valid signal when market conditions tend to trend sideways but do not follow the market rally.
This weakness can be overcome, for example, by combining stochastic with moving averages, which are created to detect trends but do not have secondary market anticipation.
Analysis of test equipment with research and simulations
Tests and simulations can be carried out in two ways: alternating tests. Each method has advantages and disadvantages, but I recommend doing both.
The advantage of the backtest method is that you can see the records of the system being tested based on historical cost data.
You can use data for several years. Of course, data quality affects evaluation. Incomplete data produces less accurate results.
Use as much data as possible to estimate it. For example, data on price movements up to five years ago.
The advantage of the pre-testing method is that the trading system can be tested directly under real market conditions.
In this way, you immediately feel the effects of every decision you make. It is recommended that you use a demo account or demo account. However, please note that you still have to treat the demo account like a real account.
Do a forward test in a longer period of time. Don’t be satisfied with the results achieved after one or two months.
Some professional marketers recommend testing for at least six months, provided that dynamic market behavior usually fluctuates over a six-month period.
This will give you enough data to understand the weaknesses and strengths of your system under different conditions.
Combine money management and risk management
Such a sophisticated trading system does not work when combined with a good money and risk management system. Remember that discipline is also very important for your economic success.
Evaluate and “increase” these needs always
As mentioned in the third point, the market is very dynamic. It is possible that your system cannot keep up with market changes. Then you must assess the trading system.
Find out where vulnerabilities need to be fixed immediately and make the necessary improvements. After completing this fifth step, you must repeat the second step.