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30k followers day. Thank you all! Want to share something on this day to traders who are determined to become Profitable Full Time Traders one day. Hope this will shorten your learning curve and put you on the right track towards profitable trading.
When a trader starts out to learn trading, he mostly starts with Discretionary trading approach. Learning Discretionary trading will take years and not many can afford topping up their trading account during this trial and error phase in learning trading.
Systematic approach in trading is the best approach for anyone. Be it newbie or professional trader. Systematic trading will remove many disadvantages in discretionary approach. Some are emotions, trying to predict market, scaling up issues & strategy hopping.
So how do I go about System Trading ? A system is one which has fixed rules for entry, exit, SL, TSL, Money Management, Risk Management etc. The trader will put NO discretion to change any of the rules above and keep trading it even through drawdowns.
To develop a system, a trader has to first consolidate his market theories/strategies into fixed rules in a piece of paper. Then run the rules on historical charts to figure out if the theory/strategy really did make money in historical period of time.
This is where Backtesting comes into play. Backtesting is the secret sauce and a pivotal step towards profitable trading. Only through Backtesting, a trader will come to know if his system worked in previous years and also will help him to gain conviction to trade through DD
Post Backtesting, the next very important step is Flawless Execution without tinkering the rules of the system with discretion. Also the trader has to keep trading through drawdowns and not abandon the system during this period. https://twitter.com/SunderjiJB/status/1275768868011565057
The profitable trading results will start showing up. Systematic traders track their trading results over 50-100 trades, not every trade. They also have quarterly, half yearly & yearly view on their system returns, not on daily & weekly.
Not but not least, you should spend your time, money & frustration during backtesting and system development and not during Live Trading burning your hard earned money. There is always a tomorrow in markets and market will wait for you until you are ready. Good Luck !
New followers, who wish to know how my journey started. https://twitter.com/SunderjiJB/status/1025623380085460993
