First, provide the core conclusion: Personal trading system = self-positioning + clear rules + capital risk control + backtesting iteration + psychological discipline; achieving these five aspects ensures stable profitability. Below are actionable steps explained👇
1. First, identify your own 'trading DNA' (compatibility ensures longevity)
• Personality and Time: Impulsive traders engage in short-term/day trading, while calm traders focus on swing/trend trading; those who can monitor the market for over 2 hours daily can choose short-term trading, while busy individuals should opt for medium to long-term trading.
• Circle of Competence and Targets: Technical traders focus on price and volume/indicators, fundamental traders engage in medium to long-term trading, and beginners should start with 1-2 high liquidity assets (such as BTC, mainstream coins).
• Goals and risks: Set monthly/quarterly/annual profit targets (e.g., 5%-10% monthly), clearly define maximum single loss ≤ 1%-2% of total funds, daily ≤ 5%, total drawdown ≤ 20%.
Two, establish clear trading rules: opening, closing, and filtering.
• Opening signal: Only recognize 1-2 clear trigger points (such as 4-hour MA20/60 golden cross + increased volume, or breaking through key resistance levels), reject opening positions based on 'feelings.'
• Closing rules: Stop loss must be set (technical position/fixed ratio, choose one); take profit divided into target take profit (e.g., profit-loss ratio ≥ 2:1) and trailing stop loss (e.g., moving stop loss).
• Filtering conditions: Avoid low liquidity, major news vacuum periods, and high volatility without trends, reduce ineffective trades.
Three, funds and risk control: Maintain the bottom line of not losing everything (the core of the core).
• Position calculation: Single position = (total funds × maximum single loss%) ÷ (entry price - stop loss price), single variety ≤ **10%** of total funds, total positions controlled by scenario (main rise 60-70%, withdrawal 10-20% or empty position).
• Leverage red line: Newbie contract leverage ≤ 5 times, total liabilities do not exceed 50% of net assets, absolutely do not over-leverage.
• Circuit breaker mechanism: When reaching the daily/total drawdown limit, immediately stop and review, do not stubbornly hold.
Four, backtesting → simulation → real trading: Validate with data, do not just talk on paper.
• Historical backtesting: Use data from over 5 years, see win rate ≥ 50%, profit-loss ratio ≥ 2:1, Sharpe ratio ≥ 1.5, maximum drawdown <20%.
• Simulation account: Run for a full 3 months, record the logic and emotions of each trigger, correct vulnerabilities.
• Small fund real trading: First use **10%** of total funds for trial and error, write reviews for each trade, iterate strategies quarterly.
Five, psychology and discipline: Execution is more important than perfection.
• Checklist execution: Create (daily trading checklist) (opening conditions, stop loss and take profit, position, risk control red line), do not trade if not up to standard.
• Review habits: Daily/weekly/monthly reviews, statistics on win rate, profit-loss ratio, drawdown, and mark emotional interference points.
• Emotional isolation: Mandatory rest after three consecutive losses, do not blindly increase positions after a profit, use rules instead of feelings.
Six, continuous iteration: The system is not a one-time effort.
• Quarterly check-up: Check if performance meets standards, eliminate ineffective signals, optimize parameters.
• Annual reconstruction: Adapt to market cycles, introduce new factors (like policies, liquidity), maintain system vitality.
Fast track template for newbies (copy directly).
1. Underlying assets: BTC/ETH (2 items).
2. Cycle: 4-hour chart, hold positions for 3-7 days.
3. Opening position: MA20 crosses above MA60 + increased volume breaks the previous high.
4. Stop loss: 5% of entry price, or below the recent low.
5. Take profit: Target profit of 10% (profit-loss ratio 2:1), or below MA20.
6. Position: Single position ≤ 10% of total funds, total position ≤ 50%, leverage ≤ 5 times.
7. Risk control: Stop trading after a daily loss of 5%, mandatory rest after a total drawdown of 15%.
