The Perfect Trading System
Are you still looking for the “holy grail” trading system, well I am sorry to break the bad news, it does not exist. It is very common for traders to take one of these two actions in trading.
- A new trader goes out there and gathers a reasonable amount of knowledge about trading, but either due to the fear of failure or fear of success, yes people do fear success, they do not take action on using that information and do not start trading because they are looking for the perfect system or thinking that there is something better. Some advice for you, it is better to start on a system that is good i.e. it has a positive expectancy rather than to look for something that is perfect. This action of searching for the “perfect” is procrastinating. When I developed my mean reversion system it was “ok +ve expectancy”, but not great, I started trading it anyway and along the way made some tweaks and have bettered the results of the system. Now I have a system that is better, not perfect, but I realise there is no perfect system, I am happy with making positive returns that meet my trading goals and objectives. I am sure along the way I may get extra out of it, but that will not happen if I had not started somewhere, even though it was not perfect.
- A trader dives in and starts trading a particular strategy, eventually, if not straight away it will have a run of a few losses and go into drawdown, at this stage the trader may think the strategy does not work and looks for something else to trade and will repeat this process over and over. The simple reason is that there is no perfect trading strategy, you will eventually have some losses and go into drawdown, but a good robust strategy will come out of the drawdown and make new equity highs, all that is required is a bit of patience to trade the system as it should be with discipline.
By realising at the outset that the “holy grail” trading system does not exist, the new trader would be far better off trading with discipline and consistency and of course with good risk management. By looking for the perfect system you will either not start trading or you will system hop and of course these actions will not get you to being a profitable trader.
Small positive steps is all that is required. So if you as a trader have fallen into one of these two traps, it is time to rethink your plan. Perfect is not going to happen, but good is an excellent place to start.
Good trading
Miguel — TravelingTrendTrader
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