Trading models: one is the value investment generally accepted by institutions, two is the technical analysis popular among individual traders, three is the hedge value investment, the technical analysis hedge hybrid trading model, which is the most popular trading model, four is the systemic trading model.
The first three types of trading patterns, regardless of their differences in concepts and methods, have one thing in common: they are subjectively interpreted to analyze forecasts as the basis for trading decisions.
The systemic trading model is the quantitative trading model. Of course, the respective rules in the quantitative trading model vary greatly.
If there is a perpetually effective trading model, such a trading model must have two conditions: non-replicability and conformity to objectivity.
If an effective trading pattern can be replicated, and theoretically is replicated to a certain scale, then the trading pattern fails.
If a transaction model is not objective in nature, it is far from being objective, and it is only fortunately effective for a moment, not forever.
Well, let's now see if the above transaction models meet both conditions.
Let's first look at the first type of trading model, which is a subjective interpretation of the analysis of forecasts as a basis for the decision-making of transactions. Subjective interpretation, analytical forecasting, is different from person to person, different from time to time, so it is not consistent, nor is it reproducible. However, because it is a subjective interpretation, with a sharp subjective emotion, this type of trading model does not conform to objectivity.
Therefore, this type of trading pattern must be a time-to-time error, a trading pattern in which the probability of error is greater than the probability of correctness in the long run, and not a perpetually effective trading pattern.
By the way, someone who has read the above conclusion will ask why some people make money by relying on such a trading model? Because the statistical sample is not large enough (i.e. not long enough). For example, a person, who entered the market shortly before 998 and happened to encounter 998-6124, made money, but suddenly died at 6000.
It is often mistakenly thought that such a trading pattern is effective because the person who dies is the one who earns money in this way. However, the other person is ignored, who uses a similar method to the previous person, enters the market in a similar position, the difference is that he does not die, not only is he unwilling to make a profit in the process of 6124 opening and falling, and based on subjective analysis, believes that such a falling market is just a retreat in the process of rising, constantly lowering the stock, may wipe out all the profits that have not been able to be wiped out before at 4000 points, and incur losses, and finally make a big loss from the small losses.
Please don't argue with me, there are very few or no such people. At that time, many people were talking about 10,000 points. I could immediately name a lot of real people, but I still didn't say it properly.
One of the things we often hear is that in the stock market, a lot of people make a lot of money, and Soros says that only three out of ten thousand people make a lot of money, and the reason for that is that out of 10,000 people, only 1,000 people are supposed to understand the market, out of 1,000 people who are supposed to understand the market, only 100 people will make a trade, and out of those 100 people who make a trade, only 3 people are right.
Now, let's look again at the systemic trading model, which is characterized by quantitative trading (inbound and outbound trading has a set of criteria), replicability, subjectivity or conformity to objectivity.
Quantitative criteria of market entry and exit are important to ensure consistency in operations. What is subjective or consistent with objective criteria? This means that the basis on which different trading systems are established varies, some with a preference for subjective intentions, others with a preference for objective facts.
Thus, we can understand that even systemic trading models cannot all be perpetually effective trading models, and a distinction must be made.
Systemic trading patterns that are biased towards subjective emotions are not permanently effective trading patterns, even if they operate consistently. Thus, you can understand why some trend-following trading patterns fail after a certain period of time.
Only those systemic trading models that are biased against objective facts can be a lasting and effective trading model.
For example, if you want to know if the rule of thumb is an ever-effective trading model, it's true that the current model is effective, but the statistical sample is not large enough.
It's not possible for it to become a permanent and effective trading model.
I can only say that the ideas and methods contained in it can be copied by the masses, and the specific trading system cannot be copied. Because such a trading system is built on the basis of different operating levels and even lines of operation, each operator can adjust the specific data of his operating system at any time and anywhere, so it does not occur that large areas of trading system operating data are consistent and produce resonance.
Second, it is consistent with objective facts; its entry and exit criteria are based on averages; averages, which cannot be clouded by any subjective analytical predictor, are merely objective records of the average number of market transaction prices.
The 30/120 trading system that I recommend is an enlightened trading system. As each person's understanding of the trading system deepens, it is possible to design a trading system that is closer to objective facts, that is, a trading system at a smaller level. This is the mathematical concept of the exponential distribution.
A trading system can be profitable if the volatility of the varieties of trades you make varies only within 3% of the current price, which is a perpetually effective trading pattern.
Because such fluctuations are almost a straight-line narrow band for the market. Can market participants, especially institutional participants, tolerate such narrow band fluctuations in the long term?
They come to the market, not doing nothing to mix, they need to use the intervening capital to extract the costs of capital and operating expenses, and to make a profit. So, what's your hurry? They have to play the market at a certain volatility rate.
Speaking of which, do you have any further insight into the ideas behind the "Rules of the Game" trading system?
It's definitely not the trend-tracking trading method that is commonly understood.
You can't trade full positions. But you can be 80% heavy. And you have to be consistent with each position regardless of the profit or loss. You have to put the psychological pressure on a trading system that is likely to be profitable. Otherwise, you are always in fear.
After breaking through the operating line, the highest point cannot break through the previous high point, and then breaks down.
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Added 30/120 trading system
A 30/120 trading system refers to a trading system with a K-line level of 30 minutes, and a 120-line average as the operating line.
Intervention Principle: 1K line breaks through; 2K line breaks through and then reverses; 3K line breaks through and then reverses; 4K line breaks and then creates a new high.
To make any trade, you have to wait for the K-line at the level you are doing to finish, and not decide whether to intervene in the unfinished middle process. A K-line at the dayline level = 8 K-lines at the 30 minute level (stocks) or 9 K-lines at the 30 minute level (stock futures), which means that at the lower level you can see many K-lines, that is, you can see a relatively complete shape, while at the higher level you can only see 1 K-line.
Is it better to make a decision based on one K-line, or is it better to form multiple K-lines? Is a student's academic performance more comprehensive based on a one-time final exam in a semester, or is it more comprehensive through a series of small tests in a semester?
The 30/120 trading system I gave you is not the ultimate trading system that you can manipulate. I am now using a 15 second operating system, which means that by practicing the 30/120 trading system, you also have room for improvement, which will give you more room to operate in a more objective market, i.e. reduce losses, increase profits.
I'm going to take a look at this video.
(Source: Translated online)