What is a trading system?

What is a system?

System is:

1. a set of things working together as parts of a mechanism or an interconnecting network; a complex whole. 
2. a set of principles or procedures according to which something is done; an organized scheme or method.

So, it is getting a few things that you believe will work and make it work as a group with measurable and desirable outcome/goal.

But you may not know whether it will work or not, you simply testing your believe which derived from your knowledge/experience/believe.

So you try to create a system, it starts with a couple of questions, and you answer the questions by research, copy and paste, and try to follow others. Why? because it is easy, and people like easy, proven, quick.... but it is not yours, it may not suit you, you may not believe it truly because at the first step you don't even understand the logic/assumption behind other people's believe that you trying to copy.

So, don't copy paste. Continue to do research, study more about top traders characteristic, traits, advice for fun learning not money. You start to face yourself in a quiet room, asking yourself

• why you want to trade? in fact, there are million things you can do. What is the reason you want to become a trader?
• are you sure you know what you are doing? what do you have? do you know what you don't have? do you know that you may not aware what you don't have? e.g. knowledge gap. So how to get what is required? So you continue to do research, facing yourself honestly, and have relationship with those knowledge and you finally believe it may work.

There you go, you have your believe. Now is the time to create system.

Referring above, a system is getting a few things that you believe will work and make it work as a group with measurable and desirable outcome/goal.

What is your trading goals (at beginning stage)? is it all about money? pips? behave better in trading?

I don't know about you, i choose behave better in trading as first step, pips a second, and money as third in the beginning stage.

I choose behave better in trading because i want to manage risk and trade with confidence. This is a long haul, not a few trades and i can then retire young and rich.

As I choose life as a trader, I need a map. A map of 1) where I am, 2) where I want to be, and 3) how to get there.

In summary, a trader's map inclusive of trading philosophy (believe, knowledge, rules, mindfulness), trading system (a few tools and resources to get where you want to be), trading plan (how you get there).

• When you travel with a map, you naturally believe the map is trustable and you comfortable to believe the map will get where you want to go (Philosophy). 
• When you look at your map, you will think chronologically that beginning and the destination can be divided into a few steps and you will brainstorm about a few things required in each steps/stage orderly (e.g. walk, take a taxi, fly with aeroplane, then landing and take a train and etc.) - that is called trading system. 
• Once you have the system, you will draft the strategy to manage it at your favour to reach your destination/goal (e.g. review cost, risk involved, feasibility study, research, choosing options available, a few questions, advantages, disadvantages, evaluate your risk-reward ratio, edge of trading, and etc.) then you make decision. - That is called trading plan.

A trading system simply means having a map you believe and plan your journey, more importantly to take a step and action with confident no matter you are right or wrong, that's the miracle of uncertainty and learning progress, or a trading journey.

It is not about the money!

It's about the work 

It's about the consistency  

It's about the dedication 

It's about the perseverance 

It's about the homework, again! 

It's not about the money at all. 

It's how you do your homework 

It's how you manage your risk 

It's how you structure your trading plan 

It's how you journal and review your trades 

It's how you ensure you avoid the same mistake, again!

It's not just about the money on the table 

It's about following your trading plan 

It's about discipline in cutting losses 

It's about sticking to your trading plan 

It's about rules that above the trading plan 

It's about whether you treat trading as your business 

It's not about how much balances in your account 

It's pips that counts 

It's discipline that values 

It's attitude towards trading that matters 

It's the goal to become a better trader after each trade 

It's the job you really want to do even it does not paid 

It's the choice you make to become a great trader

There are many things above that, but you know surely it's not all about the money you will make when you decided to become a great trader. You will never regret!

What is a Good Trade and Bad Trade?

It's interesting to hear how people define success and failure when it comes to trading. 

What constitutes a well thought out disciplined trade? An ill conceived one?

What someone perceives as being a good trade. What someone perceives as being a bad one. 

Here are some guidelines that may help you along. But I want you to think about consistency. After all anyone can put their hard earned money on the table and come up with a winning trade every now and then.

Yet few can balance their wins and losses in a way that keeps them in the game over the longer term.

Key variables that come into play align psychology, attitude and ego. 

Combine these with risk management, position sizing and discipline. 

Which is all then packaged up into methodology, patience and managing your emotions.

So here is a small list of behaviors that are either going to keep you in the game over the longer term, or throw you onto the scrap heap with the majority of traders who have succumbed to the dark side rather than the embracing the light side.

# 1: Successful trades have a strict trading plan that is followed without fail. Unsuccessful trades are made on impulse, gut feel, opinion or ego.

# 2: Successful trades have an exact entry point with position sizing decided before the trade is placed. Unsuccessful trades are made without consideration that you may actually be wrong.

# 3: Successful trades have a predefined loss limit with upside potential unlimited. Unsuccessful trades have open risk parameters and conservative profit targets. 

# 4: Successful trades are taken when your strategy triggers the trade. Unsuccessful trades are made when the fear of missing out overrides everything else.

# 5: Successful trades follow your trading plan even during draw downs. Unsuccessful trades try to recover losses quickly.

And remember, price action is everything. 

It overrides feelings, financial need, personal opinions and inflated egos. 

And above all it overrides greed. 

At the end of the day the market owes you nothing!