What Does a System Kills Strategy means? 👶🏻

First of all, I'd like to clarify what the text in the upper photo means for those whom don't know, This code:

count = 0

i = 1

while i == 1

count += 1

is a code written by a programming language to build unlimited Loop system.

As you can see, (i) will always be (1), and so the condition of i==1 will always be true. Therefore, the code will never stop running. And this is what I want to talk about today;

A SYSTEMATIC TRADING STYLE.

Now, why I prefer having/building Trading system instead of Strategy?

without any complexity, the idea is to look out for something that present itself everyday, we all know that to build trading strategy you need to:

1. Identify Price Action

2. Identify A Direction

3. Identify A Pattern

4. Identify Amount of volume

5. Identify The volatility

6. Identify The Sensitive Levels (Supports/Resistances)

7. Identify The Long/Short point

8. Identify the Margin of Loss/Profits

This is most of the requirements that you need to identify and go though every single time you want to make a trade. and this is what is a strategy looks like. now, the system has different requirements and all what any system in the world (not just on trading) ask for is "specific action" to react on.

Think about it, Dose the stock/Forex market do something usually repeated every day? what are the similarities in every trading day? keep thinking about it (I'll tell you the answer in few minute) but lets see what's requirements any system ask for:

1. Specific Action

2. Specific Time

3. Specific Pattern

4. Specific Direction

5. Specific Margin of Loss/Profits

You may say: "but all of this is also required on any strategy!" - Yes correct but, don't forget that the strategy dose not happen everyday, and strategies cannot be identified or comes to life without your intervention, meaning, that you have to analyse every big and small thing everyday in a strategy;

And here is the essence of the difference between strategy and system, The system have the possibility to be valid and work based on certain action that happens without your intervention. Now, to answer to your Question about (what dose the stock/Forex market do something usually repeated every day?); There's a lot of market-keys are fixed for everyday but it has to be identified and confirmed every trading day. and one of these key's are:

• The Highest point of the day

• The Lowest point of the day

for sure there's a lot more market-keys that has to be identified automatically but to keep it simple i'd like to focus just on these two "also because I'm more expert on them. so i rather to write about something I know";

Let's Identify The Problem 🤔

in order to make a trade based on a strategy, you'll need all the strategy requirements to be valid (in other word you need to have all off your confirmations) because every confirmation you get will add +% possibility on the potential of winning in a trade, meaning, if you have 5 confirmations as requirements for your strategy, every 1 confirmation will = 20% potential, if you got 3 confirmations of 5 that's means your trade have 60% potential to be wining trade and here where we fall into more problems such as:

1. Discipline problems (when you decide to take the trade without fully confirmations)

2. Patience problems (when you have FOMO)

And more problems that will to effect on you performance as trader, applying a trading strategy has a lot of risk involve on it because it's runned by humans emotions.

So, What's The Solution 🤷🏻‍♀️

Personally I tried last 3 years to find a way to merge my strategy with a system, it's not simple process and it took some work in order to fit system with strategy, to speak about solution we need first to start looking for a system, as I mentioned there's a lot of keys that any market repeated everyday, my system is Shorting-h.p (Shorting the highest Point) and with this system my trading style has becomes more stable and consistent and less analyzing because all the details that I want to identify is provide by the market itself, (for example: in strategy I was looking for support and resistance level, and identify the next move of the price) but with my current system, I just need to Identify the highest-point of the day (because as a system, the highest-point has to be made everyday automatically) and I don't have to identify the next move of the price because it's the highest-point, the price has no possibility of space to move/cross above it.

Also, there's a similarities between strategy and a system which is the "Confirmations";

There's no possibility to have a successful trading style whether if it's depend on "Strategy" or "System" without "Confirmations", (for example, my system required me to Identify where the highest-point going to be, and why, and when. I had to answer of all these questions every time I want to take a trade, and we can call that package of answers is "my edge"; And edge is also something you need to have for your system/strategy).

Summary 🤗

For sure I'm not against you if you're a strategy person, but I wanna share something that a lot of people ignore while it's a powerful key that key be used in order to improve the way you trade, using only strategy or system or both of them will provide good opportunities in the market but what we talked about in this article is "decreasing the effort of everyday Pre-work" for you as a trader and increase the potential of winning trade Through the use of what the market provide.

🥂

🙋‍♂️ Written by: @itsFiras ┊ 22/5/2020 - 08:50PM

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