As traders, we are facing a lot of winning and losing trades every day. We are running our trading systems, and we are asking ourselves, what happened, when the trades goes against our positions. Then, in a short time most of the traders, newbie but experienced as well, just easily decides that their current Trading system sucks, and usually start looking for a "Holly Grail" - the new Bullet Proof system. But there is a mistake and a trap: There is not a such thing, You can't find a Holly Grail as a Trading System, because the Holly Grail is made of 2 components: Trading System and a Trader.
If we get 100 traders with the simple MA crossover system, still 95% of them will lose their Money?? Then, what is the problem? The answer is: The second component.
1. Have a faith in your system
2. Keep your journal for every trade, that how you can learn and improve your second component.
The other thing is market condition. We have to recognize current Market condition, and have a proper System for. We know that most of the time, market is moving in 3 different ways:
Trending
Counter-Trend (sideways)
Breakouts
If you are trading only one of the market conditions, or you have only one Trading system which works perfectly only for one of the conditions, then there is an important question: what you are doing in rest of the 70% of market conditions. You are 70% of the Time WRONG or you are CHARTWATCHER.
Solution: You have to recognize the current market condition, and run your system on, you are aware when your system works, and give you the best results or you step aside when you cannot fight without the proper weapon (Trading System) in that moment, but don’t run your system all the time in all conditions.
No one trading system on this world is bullet-proof and works perfectly in all 3 market conditions. As a traders, we need to develop (and test of course) each Trading system for different Market condition. Even sometimes the 2 Systems may give you an opposite signals, that's fine, with controlled SL and good Win ratio, you are always Winner.
If we get 100 traders with the simple MA crossover system, still 95% of them will lose their Money?? Then, what is the problem? The answer is: The second component.
1. Have a faith in your system
2. Keep your journal for every trade, that how you can learn and improve your second component.
The other thing is market condition. We have to recognize current Market condition, and have a proper System for. We know that most of the time, market is moving in 3 different ways:
Trending
Counter-Trend (sideways)
Breakouts
If you are trading only one of the market conditions, or you have only one Trading system which works perfectly only for one of the conditions, then there is an important question: what you are doing in rest of the 70% of market conditions. You are 70% of the Time WRONG or you are CHARTWATCHER.
Solution: You have to recognize the current market condition, and run your system on, you are aware when your system works, and give you the best results or you step aside when you cannot fight without the proper weapon (Trading System) in that moment, but don’t run your system all the time in all conditions.
No one trading system on this world is bullet-proof and works perfectly in all 3 market conditions. As a traders, we need to develop (and test of course) each Trading system for different Market condition. Even sometimes the 2 Systems may give you an opposite signals, that's fine, with controlled SL and good Win ratio, you are always Winner.