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What is a trading system? Let's explore it in simple and easy-to-understand language.
First of all, the most essential element of the trading system is understanding market cycles. This includes macro bull and bear cycles, as well as micro market phases such as the initiation phase, explosive phase, and overheating phase. More specifically, it also involves the specific trends of each phase: consolidation, breakout, pullback, etc. The importance of understanding cycles lies in its ability to help us view the market objectively, avoid falling into emotional traps, and prevent losses due to lucky thinking or habitual reasoning.
Secondly, through continuous trading practice, we need to summarize the general rules of the market and the actions of the main players. Note that the emphasis here is on 'general rules' because there are no absolutes in the market. We need to learn how to operate in different market environments, such as the strategy differences in ranging and trending markets, as well as how to cope with various wash trading techniques.
The significance of understanding these two points lies in the fact that recognizing the cycle allows us to view the market from an objective standpoint, avoiding the use of outdated thinking during market transitions; while summarizing patterns and experiences helps us develop corresponding strategies and mindsets for different market conditions, reducing the risks of missing opportunities or experiencing significant losses.
So, what counts as experience? It varies from person to person. For me, experience is a combination of market intuition, pattern analysis, candlestick interpretation, emotional grasp, and an overall judgment of the market.
For those who want to change their fate through trading, my advice is: work hard to learn technical analysis, study patterns, master candlestick charts, and accumulate experience. Although the trading market cannot be absolutely fair, it is already quite fair compared to other fields.
It is important to note that everyone's personality and thinking are different, so it is not possible to simply share specific trading techniques. As the saying goes: in trading, the more you resemble others, the faster you die.
Trading is an art that requires continuous learning and practice, and I hope these insights can provide some direction for everyone's thoughts.