01Good trading system
The secret to trading is to find a trading system that works for you. This trading system is non-mechanical, suitable for your own personality, with perfect trading ideas, detailed market analysis and overall operation plan. Winners in the risk market have their own trading systems, so looking for a trading system that suits them and perfecting their own trading system is what professional traders do almost every day in their investment careers.
What is a trading system? The trading system is a complete system of trading rules. A well-designed trading system must make corresponding and clear regulations on all relevant links of investment decision-making. Such stipulations must be objective and unique, and no different interpretations are allowed. A well-designed trading system must conform to the psychological characteristics of users, the statistical characteristics of investment objects and the risk characteristics of investment funds.
The trading system is characterized by its integrity and objectivity. It guarantees the repeatability of trading system results. Theoretically, for any user, if the conditions of use are exactly the same, the operation results will be exactly the same. The repeatability of the system is the scientific nature of the method, and the systematic trading method belongs to the scientific investment and trading method.
The trading system can also help investors effectively control risks. Practice has proved that it is difficult for investors who do not use trading systems to control risks accurately and systematically.
Without the guidance of a trading system, it is difficult for investors to quantitatively evaluate the risk of each entry transaction, and it is difficult to evaluate the significance of the risk of a single transaction in the overall risk. The use of the trading system can clearly tell investors the expected profit rate, expected loss amount, expected maximum loss, expected number of consecutive profits, expected number of consecutive losses, etc. for each transaction. These are important parameters for investment risk management.
Helping investors to effectively overcome their psychological weaknesses may be the greatest function of the trading system. The trading system makes the process of trading decision-making more procedural, open and rational. Investors can transform from a selection process in a fuzzy state dominated by emotions to a quantitative and numerical selection process, that is, simply judging the reflection of the signal system and executing the decision represented by the signal.
02 Several core connotations of the trading system
1. The core of mentality
When the trading system does not have a tradable opportunity, how to adjust the mentality and achieve the unity of action and heart is the first condition to ensure that the trading system can play a role. If you have a good trading system, but you are impatient, unable to bear the temptation of short positions or unable to resist the temptation of trading opportunities that continue to soar but do not know how to control the risk, forcibly intervene, and finally get out of the control of the trading system, the failure caused by it cannot be attributed to the trading system Failure is the failure of the mentality that leads to the failure of the transaction. Therefore, the author believes that the mentality is the most important, and the mentality determines the success or failure of the trading system.
2. The core of gains and losses
Different capital starting points have different gains and losses. For example, 1 million and 30,000, the annual income is doubled, and the transaction order is the same. However, for an individual who has mastered 1 million, the income target is reduced to 50% per year, and his income is still much higher than 30,000; at this time, the requirements for his psychology and technology will be greatly reduced.
Therefore, different trading systems will show different properties. 1 million individuals are likely to value mid-line trading systems, and 30,000 individuals are likely to value short-term trading.
3. Technical core
There are three profit models in the market, oversold rebound, high selling and low buying, and strong chasing high.
1. Oversold and rebounded, oversold, to what extent will it be reversed? Bouncing, to what extent will it fall?
2. Sell high and buy low, high, how high is high? Low, how low is low? Suck, is it one time or many times?
3. Strong pursuit of high, strong, when can you chase, and when can't you chase? Chasing, how high can you still chase?
The author believes that it should be a product of a certain channel in form, reaching the upper track of the channel, throwing out, reaching the lower track of the channel, and absorbing low (the Bollinger Band can be used in the system to operate, but the whole trend must be analyzed In what state. If the Bollinger Band is in the finishing trend, it is a very feasible technical analysis indicator, but if it is obviously in an upward or downward trend, then it is a wise choice to use the trend line and channel line) .
4. Control core
During the signal period of the trading system, because there must be uncertainty, fund management is required to reduce the uncertainty (and risk) to the maximum controllable level, which is not the content of the technical trading system.
Assuming that a technical trading system that can achieve a 70% success rate can be increased to 80% if fund management is added, then the success rate of this technical trading system is 80%, not 70%.
5. Track the core
During the signal period of the trading system, the transaction intervenes. Whether there is a possibility of a market turn in the market outlook trend tracking system, and if so, stop winning immediately.
Therefore, a good trading system should also have a supporting trend tracking system to determine the end of the trend and allow profits to run.
6. Short position core
When the trading system has no signal, whether the psychological quality required for short positions can be achieved is also an important factor in determining the success or failure of the trading system.
From this, it can be clearly seen that the technical trading system is only a part of the trading system, not the whole. When there is a signal in the technical trading system, it is not the system making decisions, but people are actually making comprehensive behavioral decisions. A good trading system includes mentality, technology, requirements, patience, control and so on. Therefore, the trading system is a comprehensive analysis system to solve the decision-making system of choosing the right object and performing the right behavior at the right time.
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