Second, understand the links included in the trading system.
Third, master the verification method of trading system.
The purpose of system check is to determine whether the method that was most suitable for you in the past was really the most effective. In doing so, we must remember that a system that worked well in the past hypothesis testing may not work well in the future.
Therefore, the perfect day trading strategy points out that a complete inspection of the trading system should at least include the following information:
1. Annual analysis: When considering the inspection time, you must have your own opinions. Many system developers only check the historical data of 10 years.
2. Number of transactions analyzed: If your system can generate enough historical transactions, I suggest checking at least 100 transactions. The more tests, the better. However, in testing, when you find that the data does not support your system, you always tend to test fewer transactions.
3. Maximum floating loss: This is the most important factor in the trading system. Too much floating loss is obviously a big negative factor, because it makes you quit the futures market too quickly before the trading system has time to make money. Therefore, we can think about some reasons for floating losses by examining the transactions with the biggest losses. If most of the losses occur in only one transaction, it is better than experiencing a series of losses.
4. Maximum number of consecutive losses: This variable is more of a psychological factor. An excellent trading system may also lose money in consecutive transactions. Not many traders can stick to their trading principles after four or more consecutive trading losses. So we need to know whether we will lose money more than ten times in a row.
5. Maximum single loss amount: This important indicator gives the maximum loss amount of compensation transaction. It allows you to re-check the system by adjusting the initial stop loss amount to see what the average loss amount of all loss-making transactions is.
6. Maximum single profit: This is more important than the maximum single loss. If your profit depends on only one transaction, then your system is very doubtful.
7. Percentage of profitable transactions: few systematic profitable transactions account for more than 65%, and the more transaction statistics, the lower the proportion. Some trading systems with only 30% profitable trading time can also be good trading systems, and some systems with 80% profitable trading time can also be bad trading systems. Obviously, even if the percentage of profitable transactions is high, if the average loss of loss-making transactions is large and the average profit of profitable transactions is small, this is obviously a bad system.
8. Average trading profit: This indicator will tell you what the hypothetical average trading will be like. You must make sure that when you check your trading system, you deduct the friction loss and commission from the average profit of the transaction. When evaluating the average profit of a transaction, we must also pay attention to the largest single profit transaction and the largest single loss transaction.
Fourth, how to make the trading system work?
5. What are the obstacles to following the trading system?
Sixth, rethink the trading system.
Seven, learn the thoughts of the master.
Only the third article was explained. For details, please click:
/forum.php？ View thread & amp tid = 764& fromuid =114.