Several core connotations of the trading system

1: Mental core

When the trading system does not propose a tradable period, how to correct the mentality and achieve the unity of line and heart is the first condition for the trading system to be able to play the system trading. If a good trading system is anxious and cannot tolerate short positions or regards those who continue to soar but do not know how to control the risk as reasonable and forcibly intervene, then the failure caused by leaving the control of the trading system cannot be blamed on the failure of the trading system program. It is the failure of the mentality that leads to the failure of the transaction. Therefore, I believe that the mentality is the most important and determines the success or failure of the trading system.

2: Gain and lose the core

Different starting points of funds, there are different gains and losses. Such as 1 million and 30,000, doubling the year, the order of transactions is the same, but the individual who masters the 1 million reduces the income target to 50%, and the income is much higher than 30,000, and its psychological requirements and technical requirements will be greatly reduced. Therefore, resulting in different trading system properties, 1 million individuals are likely to value the mid-line trading system, and 30,000 individuals are likely to value the short-term trading system.

3: Technical core

There are three profit models in the market, oversold rebound, high selling and low buying, and strong chasing.

1 "Oversold rebound, super, to what extent will it reverse? Bounce, to what extent will it fall?

2 "High throw low suck, high, high to what extent is high? low, low to what extent is low? Suck, suck once or multiple times?

3 "Strong chasing high, strong, when can you chase, what period can you not chase? Chase, how high can you chase?

Oversold rebound

Different people have different analytical basis points, so the definition of this super can be achieved using historical statistics. For example, if the high point decreases by more than 60%, and the pattern, volume distribution and other techniques are reached appropriately, then this super is the definition that must be reversed. Historical statistics should have a very high success rate. If it is still very low, then this is not a super.

Throw high and suck low

In my opinion, in form, it should be the product of some kind of channel, reaching the upper track of the channel, throwing, reaching the lower track of the channel, low suction (in your system you use Bollinger Bands for operation, but you must analyze what the whole trend is in. If you are in a consolidation trend, it is a very feasible technical analysis indicator, but if you are obviously in an upward or downward trend, then it is wise to use trend lines and channel lines - of course, it also applies in consolidation trends, so as to avoid vague or wrong signals from swing indices such as Bollinger Bands). The lower track of the channel is always below the K line, and the small probability of occurrence is above, which should be a bottom fishing system signal. The upper track of the channel is always above the K line, and the small probability is below, which should be the signal of the top escape system. - It has the same curve as the Bollinger line.

Strong chase

When the index forms an intermediate market, it only chases higher, which is relatively safe. You can also chase higher in the downward channel, but this depends on historical statistics. In fact, strong chasing is an irrational operation. In the period of chasing higher, you can be sure that you have funds in your hands, the market is rising, and this part of the funds is on the short side. Then, if there are the above two trading systems, there is no short side. There is only a difference in speed.

4: Control the core

In the period when there is a signal in the trading system, because there must be uncertainty, capital management is required to reduce the uncertainty (even called risk) to the maximum controllable level. This is not the content of a technical trading system. Suppose that a technical trading system that can achieve a 70% success rate can be increased to 80% if capital management is added, then the success rate of this technical trading system is 80%, not 70%.

5: Track the core

During the period when the trading system shows a signal, and the trade intervenes. Whether the market trend tracking system has the possibility of turning the market, if it exists, it will immediately stop winning. Therefore, a good trading system should also have a supporting good trend tracking system to determine the end of the trend, so that profits can run.

6: Empty core

When the trading system has no signal, whether it can achieve the psychological quality required for short positions is also a major issue for the success or failure of the trading system.

From this, it is clear that the technical trading system is only a part of the trading system, not the whole. When the technical trading system signals, it is not the system that is making decisions, but actually people who are making comprehensive behavioral decisions. A good trading system includes mentality, technology, requirements, patience, control, and so on. Therefore, the trading system is a comprehensive analysis system. A decision-making system to solve the right time, choose the right object, and perform the right behavior.