Yesterday someone sent me a Dm asking how to make their trading more Systematic
I decided to make it a thread as I feel a lot of people could benefit from my answer
A thread 🧵
I decided to make it a thread as I feel a lot of people could benefit from my answer
A thread 🧵
1. Understand your setup and choose a timeframe to trade and test your system on
Different timeframes will produce different results
I’m a day-trader/Scalper typically
I trade on the 1-minute so I do all my testing and trading on this timeframe
Choose a timeframe
Different timeframes will produce different results
I’m a day-trader/Scalper typically
I trade on the 1-minute so I do all my testing and trading on this timeframe
Choose a timeframe
2. Write out everything about your system
Describe what happens on “good” trading days vs “bad” trading days
For me on good days, price chooses a direction early with minimal reversals
Write out EVERYTHING you can think of, that’s it in this step
Describe what happens on “good” trading days vs “bad” trading days
For me on good days, price chooses a direction early with minimal reversals
Write out EVERYTHING you can think of, that’s it in this step
3. Go back through everything you wrote down and find a way to objectify it preferably using an indicator.
Price chooses a direction early in the day with minimal reversals on my best days
So I added VWAP (avg price) rules to keep me from trading in this condition
Price chooses a direction early in the day with minimal reversals on my best days
So I added VWAP (avg price) rules to keep me from trading in this condition
3. There are many things in your system that you can objectify
The more objective your system is the less thinking you must do on your part and simply focus on executing correctly
I even semi-objectified my chart pattern using pivots
The more objective your system is the less thinking you must do on your part and simply focus on executing correctly
I even semi-objectified my chart pattern using pivots
4. Understand that most of you won’t systemize EVERYTHING
For instance, my system only helps ensure the trading environment is in favor for my technical pattern
A technical pattern without criteria is edgeless
The pattern allows me an entry/exit not a crystal ball
For instance, my system only helps ensure the trading environment is in favor for my technical pattern
A technical pattern without criteria is edgeless
The pattern allows me an entry/exit not a crystal ball
5. Ensure that it fits as close to how your system is supposed to perform as possible
What I mean is that your objectified system shouldn’t miss too many trades that you would have taken yourself
Or get you in trades you wouldn’t take yourself
Let me give an example…
What I mean is that your objectified system shouldn’t miss too many trades that you would have taken yourself
Or get you in trades you wouldn’t take yourself
Let me give an example…
5. I noticed my system was telling me but when price was ranging in my mind
I implemented a rule that price must be .20% over VWAP to get me in trades where someone (buyers/sellers) was in control and kept me out of ranges
Especially in the beginning you will have to tweak it
I implemented a rule that price must be .20% over VWAP to get me in trades where someone (buyers/sellers) was in control and kept me out of ranges
Especially in the beginning you will have to tweak it
6. Continue to look for ways you can adjust your system to make it as close to how you trade as possible
Find ways increase your system’s efficiency (entry/exit techniques)
Develop more systems based on your favorite setups
Find ways increase your system’s efficiency (entry/exit techniques)
Develop more systems based on your favorite setups
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