It took me about two years to go from the idea of establishing a trading system to gradually organizing, modifying, and perfecting the backtesting trading system. Many details of the trading system, the determined methods, and standards were gradually understood by me during the backtesting process.

However, being able to develop my own method is also due to reading a lot of books in the early stage, knowing what other people's trading systems are like, and what a complete trading strategy should cover, so I could slowly build my own system. This is also why I often say, read more and do less.

I don't think my method can be called an epiphany; it's something that has been polished over a long period. It's also not something that's common on the street, because a trading system must be very unique and personalized. It's like a weapon in your hand, it needs to fit your personality and conform to your trading habits in order to be effective.

Next, I will talk about the most basic types of trading systems, so that you can understand the original form of trading systems more holistically.

The most basic thing about a trading system is that it is divided into left-side trading and right-side trading.

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Left-side trading is the bottom-fishing trade, for example, when the stock market is falling, buy in batches and wait for the trend to reverse.

Right-side trading is the so-called trend-following trade, for example, when the stock market continues to fall, after the bottom comes out, it starts to reverse and go up, then open a position to buy.

Everyone thinks about it, is there any trading system that is either left-side trading or right-side trading, there is no other choice.

Of course, there are also many smart traders who combine left and right, first bottom-fishing when the left side falls, after the bottom is fished, wait for the right side to reverse, and then follow the trend to add positions.

This also does not deviate from the most basic left and right of the trading system.In addition to the dimensions of left and right, trading also has a dimension of time period, that is, whether to choose single-period or multi-period trading.

Single-period trading refers to conducting technical analysis based on a single level of candlestick charts and making entry and exit decisions accordingly. For example, I determine the trend at the 1-hour level, enter at the 1-hour level, set a stop loss at the 1-hour level, and exit with profit at the 1-hour level.

Multi-period trading involves referring to two or more periods when trading, the most popular of which is what we call "trade the big, act on the small."

"Trade the big, act on the small" can be divided into two situations:

One situation is that the larger time period confirms the trend, you enter on a smaller time period, and then exit on the larger time period, capturing the profits of the larger trend.

The other situation is that when the trend is confirmed by the larger time period and the direction is clear, you enter on a smaller time period and also exit on the smaller time period, trading the smaller period's waves. For example, if the daily chart is currently in a bullish trend, you enter and exit at the hourly chart level, capturing a small segment of profit from the hourly chart waves each time. The resonance between large and small periods is used to increase the success rate of smaller period waves.

My own trading system belongs to the right-side trading logic and uses dual-period trading.

All trading systems cannot avoid the four basic elements of left and right, single-period and multi-period.

In addition to these, all trading systems are also composed of the most basic four elements.

1: Determine the direction. Is it currently a bullish or bearish market?2: The choice of entry. After determining the direction of the market, where should one open a position?

3: Setting of stop-loss and take-profit. After opening a position, a stop-loss is set to control risk, and a take-profit is set to secure profits.

4: Rules for position management. How much to buy each time? How much to lose when wrong, and how much to earn when right?

All trading systems encompass these four fundamental elements. Whether you are a left- or right-sided trader, or whether you use a single or multiple time frames, a system must address these four issues to be considered complete.

If you want to establish your own trading system, you can refer to the above four elements, which are akin to an outline for a trading system. Adjust the parameters of the trading system according to your personality traits, and gradually refine it to become invincible.