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SYSTEM AND STABILITY

A trading system should be established for each long-term or short-term investment.

The system created is your compass. Where and why you will buy, where and why you will sell must be clearly defined in the system you have created. In this way, you can increase the number of profitable positions by minimizing the blows from the market without getting under stress.

If you don't have a system, in every fluctuation in the market, you will sit and stand up with the market. The stressed brain becomes incapable of thinking. If this situation continues in this way, it starts to melt in your health after a certain period of time with your capital. Why would you have the same problems when there are hundreds of examples that have been tried on the market?

After being convinced of the benefits and harms of the system, the search for a system is started. I wonder according to what should I buy and sell according to what?

There are points that need to be examined while creating a system.

1-What is your risk perception? How much risk you can take. How much loss you are willing to do. If you are not willing to lose, you should not be in this market. Because the nature of this market is to lose and win. You will try to keep the gain side high as you go back and forth between these losses and gains. There will always be loss and there will always be gain. Get out of harm early with straightforward logic, sit long in the snow. Only in this way can your earning house grow. At this point, stops and trailing stops, one of the technical analysis tools, come into play.

2-What is your term? How soon can you connect the capital you have to the instrument you want to invest? 1 week? 1 month? 6 months? 2 years? The stop levels of a trader who trades daily and the investor who draws a 2-year projection and buys accordingly are different. The period of the graph he watches while monitoring the market is different. The technical indicators it monitors are different.

3-What are your personal characteristics? Do you know yourself enough? How do you react when your requests are not fulfilled? Do you have anger control? As the price goes down, you would expect me to drop at your stop point and sell, or you'd prefer me to curse the market. Are you patient? For example, could you wait for 2 years on a single share, you would like me to open 21 positions a year in the futures exchange, or open 5 positions a day according to hourly charts. All of these are related to your personal characteristics and perception of the market.

Stability brings success;
Come on, you set up a system, are you able to implement this system? Not putting a stop is a separate problem, and selling the instrument that has fallen into the stock is another problem.
Let's assume that there are 4 criteria in your Al rule. When three of the criteria are met, the fourth one will come true. You will probably say that the price that falls to the stop level after buying will not be anything from a few steps, let me wait. Once you make a compromise, it will follow.
It is more difficult to comply with the system than to create the system.

The desire to achieve the perfect system;
Achieving a perfect, no-harm system is completely against the market. But you can reduce your losses and increase your earnings.

In the trending market, overbought indicators generate false buy-sell signals, as well as trend indicators in the horizontal market generate false buy-sell signals. Because in a well-functioning market, the price fluctuates in trends.
In an investment tool you need to be aware of, for example, when you make 10 transactions, how many of these transactions you profit and loss and how much you have lost in these transactions. If you gain 5 units while losing 3 units while losing, then there is a serious problem somewhere. Simply put, if you set your stop level to 2% and make 4% profit, if you rule this yourself, you will see a growth in your capital in the medium term. Objection points are clear, is there any guarantee that this will always be the case? there is no. But don't you buy according to a certain rule when you are already buying? Are you not analyzing? Or are you still trading with hearsay information?

Jumping from system to system;
If you have a system that you use in good or bad hands, you can reduce losses and increase profits with small changes. You can achieve this with changes in stops and trailing stops. But if you constantly change the system, you will be perplexed. The trading points of the 3 traders I knew were different from each other. One was buying and selling at the next resistance or fibonacci levels, especially when the resistances broke in volume. Another was buying and selling in the following resistance, taking into account the mismatches seen in the support, especially in the indicators. On the other hand, it was selling with trace-time stops, taking into account the tightness areas in the prices and the momentum of the market, without paying attention to the bad or good basic data of the relevant instrument in the market. They were successful traders in all of them. The problem was which one to use. While I was thinking of all three, I was almost overwhelmed and could not implement my own system.
It doesn't matter how beautiful or profitable someone's system is. The important thing is how compatible the system you intend to use is with your personal characteristics. Are you comfortable when trading?
If you are not comfortable, you have to change your world of perception because;
You have entered this path, knowing that you cannot win without losing constantly.
You have a strategy that you have tried and developed before about where to buy and sell from.
-When the price goes against your expectations and starts to fall, you know where to sell at a loss.
-When the price moves in line with your expectation and starts to rise, you know where to sell for profit.
Why are you in trouble when everything is so certain?
The answer is simple;
fear of losing and ambition to win.
When your 100 thousand TL drops to 96 thousand, you experience stress because you do not want to lose. Who would want to lose? But you have to sell in 96 thousand so that your money does not fall to 90 thousand. So what if there is an upward trend when I sell? Nothing will happen. If the market meets the conditions you decided to buy, you will buy it again. Also, the market is not as unstable as we are, if it will fall, if it will fall, it will come out anyway ...

AUTHOR:

Ali Erkan TANACIOĞLU

“Investment information, comments and recommendations contained herein are not within the scope of investment consultancy.

Investment consultancy service; It is offered within the framework of an investment consultancy agreement to be signed between brokerage houses, portfolio management companies, banks that do not accept deposits and the customer.

The ratings contained herein are based on comments and personal opinions. These views may not be suitable for your financial situation and risk and return preferences.

Therefore, making an investment decision based solely on the information contained herein may not produce results in line with your expectations. "

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