I define a trading system as a set of rules and setups that determine entry and exit points for a given product.
Every trader needs a trading system.
Trading systems help reduce the emotional aspect of trading. When traders follow rules and setups, risk and reward is defined before placing trades, thus helping traders maintain emotional stability throughout the duration of a trade.
There is no trading system that always wins. Every trading system will incur loss at some point.
What trading systems do are: 1) give traders an edge, and 2) keep traders from blowing up. If traders can approach the markets every trading day knowing that the odds of winning are in their favor and knowing that they will still be in business at the end of the trading day, then they are well on their way to trading success.
Trading systems are not one size fits all. What works for Trader Joe may not work for Trader Jane, and vice versa. Just as every trader has a different personality, it is my belief that every futures product has a different personality. Trading systems must align with the personality of the trader and the product. Anyone who says “do x, y, z with any product and you will consistently make money” is more than likely full of baloney.
One of my mentors used to say, “You are the system.” Years later, that phrase is still stuck in my head. His point was that successful trading is ultimately a function of a trader’s ability to execute. You can be equipped with massive amounts of data that would nearly guarantee a successful paper trade, but if you can’t execute the trade in a real account without even thinking about it, then that information is worthless. By the time you are convinced it’s time to act, the trade is gone.
Good trading systems reduce clutter, increase clarity and help traders get on the right side of a trade. That’s it.
I believe that the ability to trade well is much more than luck. Trading is hard work. It takes discipline, patience, and confidence—those are things that we bring to the table. But since we don’t know for sure where anything is going, or which setups will work perfectly today and fail miserably tomorrow, and which rules will keep us out of losers today and out of winners tomorrow, I think we are also dependent on something bigger than ourselves for success.
We need outside help.
Several years ago I had a phone call with trader who forever changed the way I trade. Somehow I had been trading for over twenty years without noticing what he was able to teach me in a matter of minutes. After that conversation, I significantly reduced the amount of clutter on my screens. While I still watch some basic technical indicators, I am in no way an indicator trader. I don’t understand how traders are willing to buy or sell based on a green or red arrow, especially if they didn’t program the code behind those indicators. To me, trading off busy indicators seems silly and irresponsible. But that’s just my opinion; no offense meant to indicator traders.
After years of trading crude oil futures, I’ve decided that I’ll share the details of my system to anyone who is looking for a clean way to view this market. There’s no guarantee that what I do will work for everyone. However, the ability to see what is happening during a trading session is something that can be learned. I’m not saying that we will ever know the future; we will not. All I’m saying is that some markets like crude oil futures are extremely technical, and these technicals drive market direction. If we can learn to view the markets through a technical lens, then we can stop thinking and just trade.
I am confident that there are many traders who will trade crude oil much better than me once armed with a winning system.
I am not at all a self-promoting, in-your-face marketing type, but after years of hard work, I’ve got a system that works.
If you are seriously interested in learning more, and if you have $5,000 USD to spend for a trading system of setups and rules, drop me an email or send me a note on stocktwits. I’ll share more details, then you can decide if my approach aligns with what you are willing to pursue.
UPDATE June 20, 2017: I slapped this entire site together in maybe an hour over a year ago primarily to create the abbreviations page. I haven’t checked the email address associated with this account until today. The “$5,000” listed above was written as satire in an industry cluttered with sham salesmen peddling baloney trading systems. I thought anyone reading this page would see the humor in that proposal.
I’ve been mocked on stocktwits as someone who is selling a system. I’m not. I simply enjoy the markets, and I like sharing the simple, basic stuff that has already been taught by many other people. I also get turned off by the nonsense that’s out there on social media sites, television, newsletters, etc., so I like to share another perspective.
If I had more time, I’d enjoy sharing what I’ve learned in many years of staring at screens, making and losing money, being blessed and being humbled, and even watching addiction to trading destroy people’s lives. To date and at the moment, however, that’s not a priority.
All that to say, I’m not selling anything. If my posts don’t align with your style, please block me. Trading is a very emotional game. The last thing we need is more distractions.
If you’d like to discuss more about trading crude or options, feel free to get in touch with me. I’ll miss email sent through this site. Maybe give me a heads up through stocktwits.
Trade well & have fun!