What is a trading system?
Trading without the Holy Grail, I once walked on the road to find the Holy Grail for a long time, always thinking about whether there is such an indicator that can beat the invincible hand all over the world, try the k line today, try the macd tomorrow, and finally find that there is no technical indicator that can make me profit all the time.
What exactly is a trading system? I've also struggled to get an answer. After slowly learning, I understood that the trading system contains three contents: trading strategy, risk control, and discipline.
The underlying logic of a trading strategy is win rate, profit-loss ratio and trading frequency. The core of risk control is position management and stop loss. Discipline is the most critical, to be able to firmly implement, can not be arbitrarily replaced. A good operating system must be excellent in all three aspects.
Buffett's value investment is actually a kind of trading system, he is based on the ultra-high win rate x ultra-high profit-loss ratio x very low operating frequency of the operation strategy, which is what he can do after seeing through the company, and it is also his circle of ability. That's not enough, risk control is key. One is all its own funds; the second is no leverage; the third is to control the total position and have a large amount of cash; the fourth is relatively concentrated and divided. Discipline is even more powerful for the old man, and the company held in a lifetime may not be as good as what our small retail investors hold in a year.
Futures are different from stocks, due to margin, leverage, and contract expiration issues, etc., the difficulty of trading is much greater than that of stocks. Therefore, it is also necessary to have a good trading system to succeed.
Let's constantly improve our awareness and walk on the road of building a trading system.
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