Before establishing a contract trading system, you must know these three points

If you are not clear about the following three points, you will not be able to establish your own trading system well:

First: Don’t think that having a profitable trading system can ensure that you can win every transaction. The essence of profit lies in the combination of small losses and large profits. Each trading system has its limitations, and losses are inevitable.

Take the trend tracking system as an example:

It does not pursue the winning rate of transactions, but seeks greater profit opportunities through continuous small stop losses. Therefore, traders who use this system need to be prepared to bear continuous small losses. However, if it is changed to a short-term system, it will focus more on pursuing a high winning rate.

Second: The reason why many traders fail is that they always want to make money from trends by watching the market, but they neither do short-term nor grasp the trend. Therefore, before establishing a trading system, you must clarify which strategy is more in line with your style. If you are a short-term trader, you need to pay close attention to every dynamic of the market. Market fluctuations are the source of their profits. Trend traders should avoid paying too much attention to the market, because this may undermine the overall judgment of the market trend. Market fluctuations may become the source of losses. So they only need to pay attention to whether the market trend has changed.

Third: If you always want to be one step ahead of the market, but ignore how the market is now? Then your trading is like dreaming, without a realistic basis. The role of the trading system is to deal with the current market situation, not to guess what the market will be like in the future? It operates according to trading signals, not to predict the market. Finally, everyone should know that the correct trading concept is always the key to the successful use of the trading system.

I am Brother Ming. I have been in the trading market for more than ten years. If you have any problems on the trading road, you can talk to Brother Ming!