The series from novice to expert is divided into ten chapters. You can find all the content you want to read here, including the appearance of short-term market patterns and the subsequent high-probability trend. If you want to learn, I can only teach you. How much you can understand after the ten chapters depends on your own understanding [Chuishou]
1. Selecting a trading strategy to enter the trading system is the most difficult step. As mentioned before, there are thousands of strategies in the world. Which ones should we choose? Which ones should we not choose? After being screened by "quantitative thinking", the remaining indicators and strategies with quantitative standards are still numerous. We need to trace back so many indicators and strategies to the market conditions of the past few decades, and finally we can conclude the advantages and disadvantages of the indicator and whether it can be added to the system. The workload is amazing.
2. Is there any shortcut to this huge amount of back-testing statistics? Unfortunately, there is none! At most, some indicators and strategies can be run with software, but more of them still need to be counted manually. In my past investment career, a lot of time was spent on this. The world is fair, and there is no success without reason. If you are not willing to spend time on research, you have to keep spending tuition in the market.
3. In economics, there is an "impossible triangle": monetary autonomy, exchange rate stability, and free capital flow; in investment, there is an "impossible triangle": high returns, low risks, and high liquidity. In the field of trading systems, I have also created an "impossible triangle of indicators": high profit expectations, high success rate, and high trigger frequency. In other words, there is no indicator or strategy in the market that meets these three conditions at the same time. People have three highs, but indicators do not.
4. The first criterion for choosing a trading strategy is: profit expectation. As mentioned above, the first purpose of establishing a trading system is to make money steadily and make big money. However, if a certain indicator is triggered and only makes a small profit every time it succeeds, even though it does not lose much every time it fails, then it cannot be considered an excellent indicator and strategy, at least it cannot be regarded as the most important indicator and strategy in the system.
5. In other words, I think the most important indicators and strategies in a trading system are the ones that can make a lot of money if they succeed. Of course, if you can find indicators and strategies that make very little profit each time but have a very high success rate and are triggered very frequently, that's great too. Unfortunately, I haven't found them for many years. The success rate and trigger frequency are difficult to be compatible. But someone has found them, and that's Simons' gecko investment.
6. Therefore, there are always some geniuses that make people gnash their teeth with envy, but we have to admit that we are just ordinary people. Since for 99.99% of people, the success rate and trigger frequency are incompatible, there is only one way left: let "profit expectation" become the dominant factor, and find ways to make up for the remaining genetic defects through other strategies. At this point, everyone should understand that those who claim to have a unique trick to win the world in the trading market are 99.99% talking nonsense. $BTC
