If you want to be successful, it is very important to find a trading system that suits you. It must be in line with your own personality. It is very important to have perfect trading ideas, detailed market analysis, and overall operation plan. What is a trading system? The following introduces the relevant basic knowledge of futures.
The trading system is a complete system of trading rules. First of all, it needs to be well designed, and can make corresponding clear regulations on all relevant links in the investment decision-making. These regulations must also be objective and unique. In addition, it needs to meet the psychological characteristics of users, and can provide statistical characteristics and risk characteristics of investment funds for investment objects.
The trading system is characterized by completeness and objectivity. It ensures the repeatability of trading system results. That is to say, in theory, if the conditions of use are exactly the same, even for different users, the operation results are exactly the same. The repeatability of the system shows the scientific nature of the method, and the system trading method is a scientific investment and trading method.
Most investors often focus their decision-making on market analysis and judgment. In fact, this view is very biased. Because, in order to become a successful investor, not only need to carry out correct market analysis, but also need to carry out correct risk management and correct psychological control. Among the three, the most important is psychological control, then risk management, and then analytical skills, which is the so-called 3M (Mind, Money, Market) system.
For example, if the judgment of the market accounts for only one percent of the importance of investment behavior, what is ignored by most investors is the decisive factor in investment behavior. Market analysis is the premise of management. Only correct market analysis can establish a trading system with positive expectations. Risk management can only exert its maximum effectiveness under a trading system with positive expectations. Psychological control is the bridge and link between the two . If the psychological quality is not good, it will often deviate from the correct market analysis method and the basic principles of risk management.
If you want to obtain sustainable and stable profits in an efficient market, you must successfully solve the following problems:
1. How to find non-random parts in highly random price fluctuations;
2. How to effectively control your own psychological weaknesses and make your rationality Decisions are not affected.
Many practices have proved that the trading system is a powerful assistant for investors in the above two aspects.
When entering the market, most investors do not have a systematic understanding of the market. Many people unilaterally admit or deny a trading idea based on a certain understanding of the market. In fact, in order to objectively evaluate a trading method, it is necessary to confirm the effectiveness of the method in the sense of statistical probability. Regardless of whether it is random or non-random price fluctuations, the part that is not statistically valid can only give investors a chance to win locally, but there is no possibility of long-term stable winning.
The design and evaluation methods of the trading system can help investors overcome the blindness and one-sidedness of the method understanding.
The trading system can also effectively control risks. It is difficult to control risks accurately and systematically without using a trading system. Without using the trading system as a guide, it is difficult to quantitatively evaluate the risk of entering the market, and it is difficult to evaluate the significance of the risk of a single transaction in the overall risk. The trading system can clearly define the expected profit rate, expected maximum loss, expected loss amount, expected number of consecutive profits, expected number of consecutive losses, etc. for each transaction.
The biggest function of the trading system is to help investors effectively overcome their psychological weaknesses and make the process of trading decisions more procedural, open, and rational.
The trading system has several core connotations
1. Core mentality
The trading system does not propose a tradable period, and the mentality must be corrected to achieve unity of action and heart. If you have a good trading system, but you are impatient, you can’t bear short positions, or you think that those who continue to soar but don’t know how to control the risk are reasonable and forcefully intervene, the failure caused by this can only be blamed on yourself, not on the trading system . Therefore, mentality is the most important thing, which 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, doubling every year, the transaction order is the same, but for an individual who has 1 million, he reduces the income target to 50% per year, and his income is much higher than 30,000 times. Its psychological requirements and technical requirements will be greatly reduced. Therefore, resulting in different trading system properties, one million individuals are likely to value the mid-line trading system, and 30,000 individuals are likely to value short-term trading.
3. Technical core
There are only 3 profit models in the market, oversold rebound, high selling and low buying, and strong chasing high.
To rebound from an oversold, we need to understand, to what extent will it rebound, and to what extent will it fall?
To sell high and buy low, you need to understand, how high is high? How low is low? Is it one or more times?
To chase highs strongly, you need to know when you can chase them? When can't it be chased? How high can it be chased?
Different people have different analysis base points, and historical statistics can be used to define this standard.
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