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Chapter 31, Part II. Mechanical System Creation Framework. Page 8

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 27, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Commander in Pips: I understand what you are speaking about. The answer is yes, but this process still demands discipline. You should not force a real number to be what you want to make a trade happen. Say, if oscillator stands at 240 – you should not close position, because your level is 241. Ok, this is a bit overacting example, but you get it. Probably it makes sense to have a table for every trading day:


    So, this stuff let you become a habit with hard rock discipline. This is like social revue – just mark yes/no in corresponding lines and you will see do you have to enter or not just yet. This could be done even in excel, when you enter numbers and it will show you actual result – buy, sell or stay flat (with multiple “IF-THEN” function).

    Pipruit: Yes, I will definitely do that if I start with systems… Commander, don’t you think that this system is too simple?
    Commander in Pips: Yes, this system is simple, and so what? What is better – to make money with a simple system, or lose money with a sophisticated system?

    Pipruit: Well, I will choose the former.

    Commander in Pips: That’s it. The point is that most systems that work are relatively simple. They just have some feature that adds unique qualities particular to it. If you think that applying a spaghetti chart with some hundreds of indicators makes system better, then you’re wrong. There are hard-programmed “black box” systems, that probably make money, but I’m not very comfortable with them. In this case you have to rely on something that you do not understand and can’t control. All that you can do is just trust the programmers and their promises. This is also the reason why I suppose it is better to make systems by yourself. At least create and algorithm and pay for it’s programming. Here you still know the principle how your system works.

    Pipruit: Probably you’re right.

    Commander in Pips: Not all of your trades by some system will be successful. In general, if your system generates 50-60% of profitable trades and avoids large drawdowns – it is not a bad one.

    P.S. This lesson was written by Sive Morten, who has been working for a large European Bank since April of 2000, and is currently a supervisor of the bank's risk assessment department. Sive's knowledge of forex market and banking industry is vast and quite complete. If you have any specific questions about forex, banking industry, or any other financial instruments, please post them on the next page and Sive should answer soon.

    Note: FPA ranks are earned in the battles against scam, not in the classroom.
    #1 Sive Morten, Dec 27, 2013
    Lasted edited by : Oct 9, 2016
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