Fix your trading setup

Fix your trading setup:

This is very important to remember: there is no need to waste years looking for a complicated formula or the next Holy Grail. Very simple setups are at your fingertips for you to use. Some of the best traders I know have been trading the same setup, using the same timeframe, focusing on the same market, for 20 years. They don't care about anything else and don't want to know about anything else. It works well for them, they are masters of this setup. They don't let anything else interfere with their focus. If a setup doesn't come up that day, they don't do the deal.

Once traders learn to trust themselves, they can free their minds to focus on the market opportunities that present themselves, rather than wallowing in fear, discouragement, and doubt. At this time, traders have transformed, jumped out of the first three stages, and began to have a real opportunity to earn a living by doing transactions.

The shift involves focusing on developing their own trading skills rather than focusing on money. The techniques are easy—keep things under control and have the discipline to follow the formula. Focus on developing your technique and executing those setups, the same way every time. Sounds pretty simple, but I've worked with enough successful traders to know that most of them can't do it consistently over the long term. They become impatient and don't want to miss out on market action, so they jump in and chase the market without using a clear setup. Once they have done so, they revert to the ranks of amateurs.

Most transactions involve waiting. First of all, it contains waiting patterns. Professional traders don't hesitate to act once a setup appears. The trick is to wait for it to develop and not give in to impulsive trades. Then, once in the setup, the trader must be disciplined and wait for the exit parameters to be knocked down rather than capitulating and giving up prematurely.

Waiting is the hardest thing for many traders to do, but it is the waiting that separates the winners from the losers. Even with intraday trading, it can be hours before a setup occurs or a parameter is knocked out. That's the whole point; just be patient and wait. A person who chases four rabbits cannot catch any of them.

It is also important to realize that professional traders do not participate in every move. It's okay for the market to leave the platform without you joining. It is impossible to catch every move, because chasing every move is the hallmark of an amateur, which is why it is necessary for traders to establish a set of rules that include entering and exiting the market to follow, rather than relying on their own instincts to manage position. Develop a set of guidelines and have the discipline to enforce them. They exist to protect you.

Finally, professional traders focus on limiting risk and protecting capital. Amateur traders are concerned with how much money they can make per trade. Professional traders make money off amateurs all the time. By simply stopping looking for the next great technical indicator, amateur traders start turning into professionals, and they start controlling their losses on every trade.

One of the secrets to successful trading is finding 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 find a trading system that suits you and perfect it. One's own trading system is something that professional traders do almost every day of their investment life.

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.

Most investors tend to focus their decision-making on the analysis and judgment of the market, which is actually very biased. Successful investment requires not only correct market analysis, but also correct risk management and correct psychological control. Among the three, psychological control is the most important, followed by risk management, and the third is analytical skills, the so-called 3M system (Mind, Money, Market).

If we use an analogy to describe it, the judgment of the market only accounts for 1% of the importance of investment behavior, and what is ignored by most investors is the decisive factor in investment behavior. Market analysis is the premise of management. Only by starting from correct market analysis can a trading system with positive expected value be established. Risk management can only play its greatest role under a trading system with positive expected value. Psychological control is the link between the two Bridges and ties. If a person's psychological quality is not good, he will often deviate from the correct market analysis method, replace objective analysis with subjective desire, and often deviate from the basic principles of risk management.

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 change from a fuzzy selection process 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.

1. Focus on actual combat training.

Just like fighting a war cannot be just talk on paper, trading must be proven and tempered in practice. No matter how much you learn, it is just like no matter how well the coach teaches on the shore, no matter how comprehensive your theoretical knowledge is, you will always have to jump into the water and swim twice before you can gain practical results. No, there is no doubt about it.

Therefore, even if it is a simulation, we have to practice and exercise frequently, prove what we have learned one by one, slowly find the operation method that suits us, and cultivate our own operation feeling!

Second, maintain strong energy.

A person who wants to be successful must have the energy to achieve success and maintain a mental state where he can do everything well at any time. Of course, it is a bit unrealistic to say this, because people will have emotions and mood swings. I don’t mean to teach you to look like a robot. It’s neither possible nor necessary. After all, the main body of this market is people, and it’s a human-centered game. It’s always people who make the final decision.

Develop good living habits, try to keep yourself in a healthy mental state; never operate when you find yourself emotionally or mentally unwell! In addition, the meaning of this energy also means that we have to have a way to put our knowledge, our Money, our guts applied together energy. We must have this kind of energy to manage these three well, so that we can make a profit. Energy is very important, without energy, nothing can be done.

3. Adhere to your own operation ideas.

There are some people in the market who watch the market trend without serious thinking and without their own views; when they see what others are doing, they follow suit. Often when he buys, I also buy, and when he sells, I also sell. Or rely too much on the analysis and comments of those so-called professional analysts, copying what others say, and completely lose their own thinking. Of course we can learn from other people's useful things, but we still have to judge for ourselves what is useful and what is useless. In the end, one must have one's own operating thinking in order to see the success of the project.