1. You need to form your own system.
In a trading system, there is no holy grail.
We can see that the long-term practical performance of short-term experts like Lam Williams, CIS, etc., is very good. The former's book has also sold a lot, but I haven't seen a second Williams because everyone's mindset and system change slightly, resulting in very different trading outcomes.
Therefore, if you want to wear the crown, you must bear its weight. Form your own trading system, enjoy its benefits, accept its shortcomings, continuously summarize market rules, and constantly adjust to succeed.
2. Understand the win-loss ratio.
In a trading system, the win-loss ratio is the most important content. The real profit formula: profit - loss - transaction fees > 0.
There are three basic models in trading, the first two are:
First is a high win-loss ratio + low win rate + low frequency. Trend following, medium to long term. For example, Ouyang Zhuai Bai opened long positions more than 3000 times and held on until being forcibly liquidated by OKEX, which lasted almost half a year. A 'fat house' Bitcoin trader used 100,000 capital to achieve a small target during the big bull market in 2021; they are also trend traders.
Second is low win-loss ratio + high win rate + high frequency. The short-term expert model, where the win-loss ratio is often even 1:1, is very poor. Only some legendary figures might achieve it, and I feel I can't do it. In this industry, there seems to be another group of people who engage in high-frequency trading to eat the exchange's transaction fee spread, which is quite advanced and generally will not teach others. Each exchange will also find one and ban one, so ordinary users do not need to understand this.
Third is a terrifying win-loss ratio + medium win rate + extremely low frequency. What I talk about in terms of a thousand times is a classification of my own, let's call it the third category, which is also a unique tool in the crypto circle.
Big data shows that the win rate of retail investors is about 33%.
From the perspective of comprehensive strategic tactics, high win rate low win-loss ratio systems and low win rate high win-loss ratio systems, as well as my system, can all succeed.
Therefore, there’s no need to dogmatically believe that there’s only one path of low win rate and high win-loss ratio; the win-loss ratio must be above 3:1. A 10% win rate or a 90% win rate can both create a successful trading system.
Since both high win rates and low win rates can succeed, there’s no need to struggle over whether to trade long-term or short-term, and one can even mix both. The important thing is to find a trading method that suits oneself under the condition of a good match of trading strategies and tactics.
A trading system is a weapon that can help you achieve stable profits.
It can help you mark key levels, discover entry signals, and find trading opportunities that can make you money.
So, to put it another way, as long as there is a stable trading system, just act on the opportunities that arise within the system. If you incur losses, just take revenge; do what you should do well and leave the rest to the market. After all, in the end, profits can always cover losses.
However, the biggest problem for 99% of people is that they do not have their own trading system, so they are afraid of losing money when trading because if they lose that money, they can't earn it back. Even if they get it back by luck, they will eventually lose it all through skill.
So how do you have a trading system?
1. Cycle consistency: Choose a trading cycle (intraday, swing, trend) that suits your funds, time, and personality, and maintain consistency in your trading cycle.
2. Establish trading rules to form a trading closed loop: This includes: opening standards, closing standards, stop-loss, and take-profit.
3. Risk controllability: The important task of trading is risk control. This includes: position size, capital management, stop-loss settings, etc., to ensure that risks are within controllable and bearable limits.
4. Testing and optimization: Use historical data and real-time calculation results to test and evaluate the effectiveness of the trading system, making necessary adjustments and optimizations.
5. Discipline and execution: Follow the trading system, strictly execute your trading rules, and maintain trading discipline.
The test of a bull market is not just the rise and fall of the market, but also a test of our mindset. In the face of account fluctuations, we must remain rational. Next, I will announce some potential coins that have not yet launched! Follow Di Ge for spot trading, timing layouts, strategies, and Wu Chang's announcements.
