A trading system is a set of rules and strategies designed to help traders identify entry and exit points in the market. The purpose of a trading system is to generate profits by identifying potential trading opportunities and minimizing risks, with the most important outcome being profitability.
A good trading system typically includes the following elements:
Entry rules: Determine when to open a trading position and when to stay out to observe and wait. This requires patience and the ability to spot opportunities, considering all possible scenarios and situations to always be ready for risks and to timely capture a good position.
Exit rules: Determine when to close a position to take profit or cut losses. This requires strict adherence without room for emotions; all actions must be carried out with absolute discipline.
Capital management: Regulations on capital allocation and risk management. (You can see more in the comments below the article)
Psychological control: Helps traders maintain discipline and avoid emotional decisions. Control the ego, review whether you are being influenced by anything (environment, family, financial pressure, etc.).
Do you have your own trading system? If so, you can share more about it so I can help you improve it.
