How to understand the phrase "the simpler the trading system, the better"?

You can often hear the phrase "the great is the simple" when doing transactions. In fact, everyone will go through the process of going from simple to complex and then simple when starting to trade. The simplicity at the beginning is because of ignorance of trading, thinking that trading is nothing more than ups and downs If it is high, it will be short and if it is low, it will be high. There is no consistency in the system, risk control, etc., which is a process of random trading.

After losing money, it started to be simple and complex, and I began to know that trading is not that simple, and I need to learn a lot of knowledge, so I will charge a lot at this time, visit forums, read books, seek advice from great masters, and learn various indicators, such as candlestick charts, waves, etc. Theory, Dow Theory, Tangle Theory, etc. each system once, the moving average, macd, Bollinger Bands, Fibonacci and other indicators will lose sight of the K-lines drawn on the disk, but you still can't make money during this period.

After calming down, I began to gradually understand that if it is not necessary, do not increase the entity. Maybe you have found a system or an indicator to execute firmly. All trading styles have their own advantages and disadvantages. You are not in a hurry to fight in and out every day. You know how to wait, understand the rules, and execute in order. Here, It can be said that the door of the transaction has just been entered.

I don't know if the questioner is satisfied with this answer?

①The simpler the ideology followed when establishing the trading system, the better; ②The fewer elements in the trading system, the better; ③The simpler the logical relationship and causal relationship between the elements, the better.

Because speculative trading is a money-grabbing game among traders, traders have spent hundreds of years designing various methods of robbing money, and naturally regard "complexity" as advanced and effective. In fact, the essence of the market is simple, the market is nothing more than ups and downs, but people's hearts are complicated, so that complex trading systems are popular, which makes the simplest things have the most diverse and complex means. There are also complex trading systems that can grab money, but returning to the essence of the market, simple trading systems are probably more effective.

The simplicity of the trading system is not the simplicity of system thinking, but the simplicity of system vision.

System thinking may be obscure and difficult to understand, but system vision must be clear, and it can be seen at a glance without using the brain.

That is, there are only a few visual concerns left in the system, and even the thinking process is ignored.

Why this is so is due to the defects of people themselves.

The human brain will naturally screen the signals transmitted by vision, retain the changes in motion, and blur the unchanged ones, which makes the human brain only particularly sensitive to a few motion signals.

It is generally believed that it is difficult for the human brain to track more than three signals simultaneously over a long period of time.

Therefore, for traders, all kinds of analysis charts and data in the foreign exchange market are available, but if they want to achieve comprehensive tracking, it is impossible to filter the signals, which is the so-called system simplification.

Secondly, it is the second characteristic of the human brain, the thinking ability is weaker than the visual ability.

Decades later, it is the best proof that I can still recall the scene at that time but it is difficult to remember the text I read at that time.

Therefore, the direction of system simplification is visualization.

Once the visual system is formed, there is no need for thinking. Since the thinking process consumes too much brainpower, the shorter the process, the better.

Many traders like to think and pursue new explanations. It is extremely wrong to pursue reasons and plans too much when operating.

Once the visual system is formed, the trader will only be excited when the system signal appears, and the other time is not too different to describe it as dumbfounded. It is even difficult to use thinking to explain one's own system thinking and call it intuition.

If you want to delve into the system, you will find it boring and boring, because the visual signal has been developed and there are no new secrets.

In the foreign exchange market, there is only doing, not thinking. If you think about it, please complete it before entering the foreign exchange market.

Trade no more than 3 signals and no more than 3 rules.

The most important thing is to know your own shortcomings and strengths, to avoid weaknesses, and to be able to finish a sentence is a good trading system.

From the road to simplicity! The essence of trading is to obtain interest rate spreads, whether it is investment or speculation, and changes in interest rate spreads only depend on price changes, right?

The change in the price of the subject matter only depends on the participation in the circulation market and the supply and demand relationship of the flow! So in fact, K-line, technical indicators, fundamentals, and news are all appearances, and they are all harvesting tools for market makers to fool investors into the game. They have been telling you in various ways that you can make money through these, but in fact most of them use these methods. Most of them are losing money and making profits. People who are always on the tip of their horns always think that it is their own technical or mentality problems. Lost way!

If you can jump out of this cognition and look at why there are so many platforms from the nature of the transaction, it is not the most profitable to open a casino, and you will be able to make a profit more easily, so the simpler the trading system, the better, and you can eat it all without being deceived. sky

Thanks for the invitation, I have more experience on this issue and I can talk about it briefly.

In fact, our simple understanding of foreign exchange trading is that the supply and demand of the market lead to fluctuations in the k-line , which is the simplest and most thorough understanding.

In terms of foreign exchange trading, the international political situation leads to a complicated relationship between supply and demand, which needs to be analyzed from both a micro perspective and a macro perspective. This is the analysis of the deep form.

But most of us usually do in-depth analysis of foreign exchange transactions, you don't have the strength, so we need to give up this path decisively, then we need to change to a different path, if it is complicated, it will be simple. To understand the sentence just now, we simply understand that the supply and demand of the market lead to the fluctuation of the k-line. From this point of view, you will find that it is much easier and easier. Many fundamentals that you have learned before find that the market is coming. Still can’t hold it , or because you have not really mastered the ability to deeply analyze the market, you will not be able to go up or down. This kind of stuck in the middle is the most uncomfortable. We directly and decisively give up those complicated trading factors.

Doing your trading system on this basis can often get twice the result with half the effort. ​

Directly use the most primitive trading methods, for example, learn some basic k-line patterns, master the resistance support, roughly understand the reference role of data to the market, and do a good job of entering and exiting, increasing positions, and stopping losses according to your own trading system (experience) The key point is just fine. Learn to use trading skills to make money, day after day, the simplest tricks can also be used to the extreme.

There is absolutely no need to master as many skills as Wall Street traders, because it is difficult to learn if you can’t learn it. Instead of spending time and money on constantly verifying in-depth trading methods, it is better to be short of everything as soon as possible Learn to make a trading system that is more suitable for you. After all, these things are only mastered by a few people, and you will be eliminated in terms of probability.

Readers, if you are interested in my answer, please follow my Huihu account. I will answer some industry-related questions regularly, not seeking the most professional, but seeking the most authentic. ​​​​

Hard to understand without experience

This road is not easy unless you are very talented

Otherwise, it will take a long time to realize these things slowly.

The road is very poor but the people are good

The world can't know, can't do

Add first and then subtract

In the field of mathematics, there is a word called degrees of freedom.

Degrees of freedom are the amount of independent information (evidence) that is available when making an estimate (guess). The more degrees of freedom are occupied, the more constrained the system will be, and the overall deviation will increase.

The foreign exchange trading system is also the same, let me give you an example.

For example, a trading system for a foreign exchange trader. His entry requirements are:

When the MACD golden cross, the daily level moving average crosses, and the convergence triangle is met in 15 minutes, and some data in the fundamentals has undergone some changes, it also depends on the inflow and outflow of funds at that time and so on.

His entry conditions are:

Not only must the moving average cross, the indicator value reaches a certain position, but also requires heavy volume on the 3-minute line, and it also depends on fundamental information and so on.

Let's imagine, what does it mean to do transactions with such a system? It means that he has to waste a lot of time to analyze and count every day in and out of the field. Moreover, it seems that his conditions are very clear, but in fact many of them are very vague. Whether the execution ability can keep up is a big problem.

Secondly, when a person refers to too many factors, it is difficult for him to generate a fixed pattern.

What if one of the 10 conditions for his admission is not met? not do?

But 9 of them are already satisfied, do you want to try?

Do you want to try it when you meet 8?

Will there be no market in the future that can trigger all his conditions? The fault tolerance of his trading system is too poor, and a little accident may cause the entire trading model to collapse.

In other words, if a trading system is not simple enough, it will have two major problems: 1. The conditions are vague, which is not conducive to execution. 2 is too poor fault tolerance.

The reason why many people make the trading system very complicated is because they believe that adding too many conditions can make the system more accurate and increase the winning rate.

In other words, if a trading system is not simple enough, it will have two major problems: 1. The conditions are vague, which is not conducive to execution. 2 is too poor fault tolerance.

For example, let you manage one person, you will feel that you can handle it with ease, 10 people are barely feasible, and 100 people may only be a headache.

Similarly, if you look at the market from a single angle, although you cannot understand all the market conditions, at least the part you can understand will have a high winning rate.

Take technical indicators as an example, right-click on the attribute parameter settings, and you can figure out what the basis for each parameter change is, which means you understand the basic logic of this indicator, and then go to the disk to solve the pitfalls of the indicator (because the indicators are all lagging Yes, there must be pitfalls), you will get an approximate winning percentage. If you use two indicators at the same time, the winning rate is 70% (this is a winning rate that can be achieved without much effort), although the so-called resonance will increase the winning rate, but common sense tells us that 30% of the pits will Greatly reduce the winning rate. The two 70% indicators are superimposed and used together, the time span is long enough, and the winning rate is less than 50. Just like the probability of flipping a coin, if the number of times is enough, the winning rate will be stable at 50%. This is a matter of common sense.

Does that mean that multiple indicators cannot be shared? The answer is yes. But the premise is very strict, that is, you must fully understand the basic attributes of the indicator, and the application principle of the indicator on the disk, including the reasons for each of its pitfalls. In order to make an objective judgment on the indicators. So as to avoid the pits brought by the indicators. Many indicators are mathematical models, and it is obvious that reaching this level is beyond the reach of ordinary people.

Go check out my article. There are other angles to look at the market objectively. Hope it can help you.

The trading system is not simple, but it looks simple. People can know where to enter, stop loss and stop profit at a glance. Do you think it is very simple? Yes, it is very simple for a master, you probably have to practice for several years to be so simple.

Simple is only for developers, and your understanding is obviously misled by the chicken soup articles on the market. If the simple system is good, you should see a large number of people profit, not 90% of beans lost money

Minimalist transactions:

1. Only make one variety

2. Only look at one cycle

3. Only naked K

4. Trade like a bandwagon

5. Strict money management​

​Stable profits can also be achieved

The simpler the trading system is, the more decisive you will be in dealing with things. On the contrary, the more complicated you are, the more indecisive you will appear!

The way is as simple as it is, but the way is as difficult as it is. Of course, the simpler the trading system, the better. The more complicated the trading system, the more you have to consider many useless factors in it. These factors are what you think are useful, but in fact they may be some half-truths and half-false things. In short, a simple trading system is definitely good, but it requires a long period of exploration and practice to be able to conclude. This is a process from simple to complex, and then from complex to simple, and the realm is different.

No matter what indicators, it is best not to have more than 3 types in a trading system, because the more indicators, the more stringent the entry conditions, and even wait until the signals that meet all indicators are missed, and some indicators even appear completely opposite when. So the simpler the trading system, the better.

There is no trading system that is too simple, and those that are too simple use big data probability, so it is easy to get out of the whole market, and you will lose other feelings about the market. The trading system has a certain complexity, mainly because the market is complex! If you want to simplify the system, the best way is whether you can fix your own analysis method. Then the trading system will be simplified at this time. For others, yours may be complicated, but you are familiar with it. On the contrary, it becomes simple! Simple and complex lies in whether you can master it yourself! Summarize more, summarize more, use more! Every analysis of the market has your specific fixed-line method. If you get used to this method, the trading system will become simpler at that time!

After a long time in trading, the easier it is to do it. At the beginning, the indicators I used focused on a lot of varieties, and then I kept less and less. From the beginning, there were five or six moving averages, and I felt that there was support or resistance everywhere. Now there are only two left, the sub-indicator kdj, macd, sar, wr, rsi. Only macd is kept for now. The same is true for the cycle. At the beginning, I paid attention to any cycle, but now I only pay attention to those of more than four hours. The variety is also decreasing. I feel that this is a natural process. If you don’t give up, you won’t get anything. People’s energy is limited, and it’s easy to be blinded by too much

The more complex the system, the more conditions there are, and there are also more interference factors.

Simplicity equals stability, and the essence of things is the simplest. Even the movement of celestial bodies is the same. Complexity means fragile, prone to failure.

Simple is not crude, there must be some parts that should be there. And functionally optimal. Simpler means easier to implement.

Simple, the trading system is nothing more than expanding around the direction of your own order process: direction, position, signal, position, stop loss and take profit; it is simply a standard judgment of every detail in it, signal optimization, and easy execution; these It’s all simplified, just wait for the opportunity in your own system to appear and do it~㊗️Jane

The essence of manual trading is pattern recognition. The simpler the trading system, the easier it is for the brain to execute.