I need some help defining what a trading system really is.
There must be an infinite number of systems.
A trading system, should be a personal system, unique to the trader.
While many traders use Real Tick or employ Moving Averages for indication, no one else has a trading system identical to my own.
What are the basic building blocks of any trading system?
The ability to enter and exit a trade with minimal slippage.
This is not only a combination of reasonable commissions and impeccable executions, but also a result of the next ingredient:
The ability to predict price action.
How can a trader keep slippage to a minimum without some ability to anticipate stock action?
A trader can easily become accustomed to and comfortable with the price action of many stocks by means of observation.
So any trading system should be built on a foundation of methodical and relentless observation.
Determining what is relevant may be 90% of the battle. Nicolas Darvas developed a successful system based only on the stock information available in the newspapers after the market close.
Way too stark for me, but it probably still works today for many types of position traders.
I find Level II to be nearly irrelevant as an indicator of future stock action. I have heard there are traders who rely on it.
CNBC is irrelevant and perhaps even a detriment, to my personal system.
I hesitate to layout too much hard and fast stuff, Mr. Mark, as I am still only a sophomore trader.
Really, every trading system is incomplete. My approach will never stop evolving. Still when we trade we need to act off of a reasonable understanding of the conditions of our trade. Thats why us newbies get our asses handed to us on a regular basis. How could we possibly appreciate the kind of danger we are getting ourselves in, until we start to feel the pain? <gggg>
I could almost produce an insightful post on this subject, but I find myself failing to produce. Maybe at a later date.
Lets hear some more voices !!!!
Come on, embarrass yourself. <ggggg>
funk |
