As mentioned in Earlier Article, trading is not about the big winners but the small consistent winners that add up over time to become very impressive annualized returns.
For example, if you use a strategy that produces a 10% monthly net return, that translates into an annual return of 120%!.Means Doubling your money in an Year Little frequent victories win the war.
The underlying philosophy of trading is to design a trading system which can provide a higher than chance win-loss ratio together with a strict set of trading rules that will allow the trader to trade mechanically and divorce-as much as possible-trading from human emotions.
Developing a trading system is the central core of trading. A trading system is a set of procedures and rules designed to provide a specific recipe for trading. Some people like to call it a trading methodology but in reality it is a set of clearly defined rules and procedures for trading.
The end result is to create a system that if implemented consistently on every trade will result in a higher than chance win-loss ratio.
A trading system should be in constant evolution with the spirit of reaching for perfection. But because of the “chaos factor” of the effect of infinite permutations of variables, perfection is not possible.
As many in the trading field like to say: “there is no Holy Grail in trading system and Please stop searching for a perfect system.
As the market is loaded with chaos factors (the unexpected), few trades go exactly as planned. But this fact is an important driver in the continuing learning and tweaking process.
Once a system has been developed and tested over time by the use of paper trading, a trader develops a sense of the reliability of the system and builds the necessary confidence needed to develop the “faith in the system” and formulate trading into more or less a mechanical event.
In summary, the underlying philosophy of trading is to design a trading system which can provide a higher than chance win-loss ratio together with a strict set of trading rules that will allow the trader to trade mechanically and divorce-as much as possible-trading from human emotions.
STOP Trading Based on Your EMOTIONS,Have a Plan and System to trade else you will keep on loosing money.
As a part of Trader’s Intiative I have started sharing my trading system for Both Intra day and Positional Trades for Nifty/Stocks which are thoroughly back tested and we do trading based on that only.
If you are loosing money because of Lack of Trading System Please contact me @09985711341