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What is a trading system?
The system is a complete set of rules that define all aspects of entering and exiting positions, as well as risk management. The system should generate a positive expectation. This means that you can earn more than you lose over a period that covers a lot of trades...
What is a trading system for?
The trading system is an incredibly powerful tool for making a profit on the market. Some of the most reliable systems can be used in several markets with small changes (which gives the trader a good opportunity to diversify the trade and a high profit potential)...
You will inevitably miss some of the best trading opportunities, because they are often the most risky. You will prematurely close excellent positions at the first sign of a reverse price movement and then see how the market is going in the direction you predicted. You will take profits too...
One of the main rules of trading is (or should be): don't trade when you can't afford to lose. The best way to make sure you lose is to trade with money that you can't afford to lose. If your trading capital is too important for you, you are doomed to a number of fatal mistakes.
One of the main rules of trading is (or should be): don't trade when you can't afford to lose. The best way to make sure you lose is to trade with money that you can't afford to lose. If your trading capital is too important for you, you are doomed to a number of fatal mistakes.
- Exit signal. This element determines when to close a trade or reduce the position size.
But in fact, there are 12 elements that need to be taken into account when building your own system. These include:
Human emotions are the main reason for mistakes and losses in trading. Trading on the system is effective, because the presence of rules allows you to remove emotions from the trading process and increase the consistency and profitability of decisions made.
A properly constructed system should be robust and provide the ability to constantly increase your trading account in the long term. But if the trading system is built incorrectly, the trader will constantly face losses.
There are many psychological factors that push a trader to break discipline. Some are unable to create a plan that was realistic and simple from the point of view of its implementation. Therefore, when something goes wrong, they depart from their own plan. Other traders simply do not have enough...
General recommendations for stress relief
The most important recommendation that any psychologist will give is not to be a workaholic and allow yourself to be distracted from business. Don't let your brain think about stock issues all the time. Relax more often, choosing useful forms of rest:
1 which occurs in specific alarming situations, such as when the market moves sharply
2️ permanent (permanent, chronic).
This condition leads to breakdowns, panic. Profits fall, as the trader often "lose their nerve", which leads to an early exit from a profitable deal. Money becomes less...