1. The rules are not ambiguous, execution is not tangled
Many people say 'trade according to the system,' but when it comes to real trading, they become 'feeling-based': they are afraid to buy the dip when it drops, scared to chase when it rises, they set stop losses and then withdraw them... This is not a system; it's metaphysics.
A real system must be as clear as legal texts. For example, my trend system:
Entry: BTC stabilizes above EMA30 on the 4-hour level, and RSI rebounds from the oversold area to above 50;
Stop loss: 2% below the previous low (allowing room for market fluctuations);
Take profit: the profit-loss ratio should be at least 1:2, partial closing (50% of the position is protected after reaching the target, the remaining is for trend trading).
To put it plainly: Don't let 'I think' interfere with operations; once the rules are set, even your cat can execute them.
2. Accept that 'losing money is part of the job'
I've seen people pursue a 'holy grail system,' insisting on a win rate of over 90%, only to be slapped in the face by the market until they become withdrawn. The truth is: high win rates are often accompanied by low profit-loss ratios (making a little money and running, but holding on when losing), making it easier to blow up.
My system has a win rate of only 40%, but a profit-loss ratio of 3:1, stable over the long term like an old dog:
Assuming 100 transactions:
Profit from 40 trades × Profit 3 = 120
Loss of 60 trades × Loss 1 = 60
Net profit of 60
Key point: You must psychologically accept continuous losses. I've had a maximum of 8 consecutive losses, but then made back half a year's salary in one trend— the premise of a reliable system is that you trust it more than you trust your own feelings.
3. Position management is 100 times more important than technical analysis
No matter how good the system is, a heavy bet can go to zero due to an accident. The core of money management is summed up in one sentence: survive until your advantageous market arrives.
I will always keep single transaction risk ≤ 2% of total funds (for example, with 100,000 capital, the maximum loss is 2,000);
Daily maximum drawdown of 5% forces you to stop (to avoid getting carried away);
Only use profits to increase positions (bet larger returns with the market's money).
Plain interpretation: Don't envy those gamblers who double their money in one go; we pursue 'stable snowballing.' Remember, slow is fast.
4. The system must fit 'like your underwear'
Those who are slow will feel anxious using a short-term system; those who are impulsive will go crazy playing long-term— the system must match your personality.
My personality is stable, so I only do weekly/daily trend trading, checking the market every few days;
My best friend has quick hands, focuses on 5-minute segments, and can trade 20 times a day to make a profit.
Key testing standard: Is there inner turmoil when executing? If you constantly want to 'change the rules,' it means the system is not suitable for you. True compatibility is as natural as breathing during operation.
5. Backtesting data is your 'confidence insurance'
Every system of mine must undergo at least 200 historical backtests + 3 months of simulated trading before going live.
Key focus of backtesting:
Maximum drawdown (can you bear it);
Consecutive wins/losses (psychological preparation);
Which markets are bound to lose (avoid the volatile period).
For example: My trend system made a fortune in the 2021 bull market but continuously hit stop losses in the 2022 volatile market— but because I had data support early on, I directly took a vacation to avoid a mental breakdown. Data won't lie, but feelings will.
6. Simple enough for a primary school student to understand
Many people complicate the system: piling dozens of layers of moving averages, MACD, Bollinger Bands, resulting in conflicting signals. Experts simplify:
My system only uses EMA30 + trend lines, breaking in to enter, breaking to stop loss;
The core logic is summed up in one sentence: 'Run with the trend when it forms, and run away when it reverses.'
Underlying logic: The essence of the market is price fluctuation; the simpler the rules, the less interference. Don't use tactical diligence to cover up strategic laziness.
Lastly, let's say something heart-wrenching
I've seen too many people waste years looking for the 'holy grail' but are unwilling to spend three months refining an ordinary system. The real secret to making money is actually 'repeating the right things':
Once the rules are set, stick to them without hesitation;
Curse when losing money but don't change the system;
Patiently wait for your own market.
The market is like a bad boyfriend, tormenting the fickle to tears, while pampering the devoted until old age. Follow Ake to learn more firsthand information and precise points in the crypto world, becoming your navigation in the crypto space; learning is your greatest wealth!#加密市场观察 #ETH走势分析 $ETH
