I have been a long term member of this forum. My journey started on this forum more than a decade ago and back then there was one golden thread of this forum. It was called “Teach a Man to Fish”, in which one of the members had shared how to trade intra-day based on 5 minute charts. It was a very popular thread and filled with nuggets of gold for new traders to learn and use. I personally traded based on that for a while, but realized that it had a lot of discretion involved. Over the years, I have adopted my style to more systematic and moved to only quantitative trading. I will only put my money in a system whose rules are set in stone at the onset. No messing with it during execution. If I believe that system can be improved, then I treat the changes as a new system and look to back-test the changes.
This thread can be seen a modern reincarnation of the old “Teach a Man to Fish” thread. In this thread, I intend to set up a simple easy to follow – systematic rules based system. If you are trading these rules systematically, you will need strong discipline to stay in a trade and execute trades. The first aim in trading is to stop losing money. This thread hopefully will help a lot of newbie traders understand the power of and challenges faced in following a systematic trading system.
Before I get started, here are some of the points I’d like to highlight for everyone’s benefit.
This thread can be seen a modern reincarnation of the old “Teach a Man to Fish” thread. In this thread, I intend to set up a simple easy to follow – systematic rules based system. If you are trading these rules systematically, you will need strong discipline to stay in a trade and execute trades. The first aim in trading is to stop losing money. This thread hopefully will help a lot of newbie traders understand the power of and challenges faced in following a systematic trading system.
Before I get started, here are some of the points I’d like to highlight for everyone’s benefit.
- This is not a Holy Grail – In fact no holy grail exists. You should try to find your edge in the market and trade that edge repeatedly. Some traders have this edge in their reading of the market. For others, like me – it has to be backed with data and analysis.
- It will not make you rich overnight. You will have to put in hard work, document your trades, stick to the system to make a little bit of money on a day to day basis. However, over the long run you will beat the index market and returns – if you can follow this or any systematic system.
- This is an intra-day system and will require you to track the markets in morning during open and pre-open.
- What I am providing here is a template with a few parameters that I have set up based on my situation. You are free to make edits to better suit your trading style. However, once you make a change, stick to it and follow it to the T. Don’t fiddle with it time and again.
- I personally don’t trade this system. Simply because my focus has been positional trading. I am looking to automate quite a few things about my trading and hopefully one day this too shall be automated.