The Core Role of Trading Systems

Discipline: Using rules to combat human weaknesses.

Quantifiable: Validating strategy effectiveness through historical backtesting.

Controllable Risk: Clear stop-loss, position, and capital management.

Replicability: Achieving probabilistic advantages through consistent rules over the long term.

Example: Trading without a system: It's like a road without traffic rules, relying solely on drivers' ad-hoc judgments, leading to a high accident rate.

Trading with a system: It's like driving while following navigation and traffic regulations; while it can't eliminate all risks, it significantly enhances safety and efficiency.

A trading system is the “infrastructure” for long-term profitability. Without it, profits are more likely to be random, and losses are inevitable.

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