Hello
Most of the systems created by anyone in this world have
limitations.
Most of them work in certain phase brilliantly and other
cases average and poorly.
Most of the time statistic don’t support system. Though most
of the people believe in back testing.
In back testing all the possible signals are take into
consideration which humanly is not possible to participate in them.
That means we are going to miss some signals. Therefore
depends on statistics don’t help.
Focus of the systems positive aspect when it has worked and
offered very good result.
If visibly the system has given result most of the time
follow it with proper money management.
If visibly not offered result then avoid.
If statistically result not encouraging then see by
visibility on charts in most actively traded counters or nifty.
Without risk management following any mechanical systems are
problem.
We have a sideways system for sideways market and trended
system for trended market.
To combine both is not possible.
Correction cycle like Wave 2 and Wave 4 or Wave B is the
sideways market and where one sideways systems works well.
Moment market move into the trended part then sideways
systems stop out.
Setting a pre defined target is also a key role in creating
a system successful.
Many time it can happen that a sell is given. It falls and
target attained as well. If you don’t cut you positions and take profit at the
target levels then on reversal it can stop out to put you at loss. Even
if the system has provided correct result at the stand alone point of view.
Statistic do not support systems in most of the cases and vice versa.
Tips
1)
Define a system
2)
Define a stop loss
3)
Define a possible target
4)
Define risk per trade
Take system as an alert for you to take a decision to buy or
sell.
System is a thought process after observing certain price
action.
We automate it to an extended to give an alert
Further put you subjective analysis once again to decide to
take a call or not to a take the indicated position
We can practice in the nets certain shots but when it come
to the match, we need to attempt it on instincts.
What helps is risk per trade finally.
Hitendra vasudeo