Day 24 is January the 24th and it is a Sunday.
A few years ago I bought a book from Van Tharp, it is called “way to financial freedom”.
And in this book there is a part that I have marked.
It is about a conversation where Tom Basso said that he probably would be able to create a profitable trading system with random entries.
That made me think and I wanted to find out if this is really possible or if I would be able to disprove it.
I learned from Tony Robbins that the best way to get good results is to do something that is called modelling.
Basically you look for someone who is very good.
You want to find somebody who already has the results that you want.
Then you need to find out how he or she is able to produce the good results.
He said it would be like baking a cake with a recipe.
Because if you have a recipe, you can either prove or disprove that the cake that you bake is tasty or not.
We all have seen recipes, usually they start with the ingredients.
So what do we need to bake a good trading system?
We need several components that are required.
For example, if you don’t have a function to open a position, all other functions in our trading system will not make any sense.
We also have components that are optional.
For example the output on the screen about profit and equity is not required for the computer, we just want to see what is going on.
And we also need to know how much.
For a cake you will find detailed information about the flour and the sugar, the milk and the chocolate to make it tasty.
For a trading system you will need the take profit, the stop loss, the number of trades and the risk setting that you need to pick to make it profitable.
And the third part of a recipe will describe the exact steps you need to take and in which order.
For example exactly how hot the oven should be and if and when you should put in two or three eggs.
For a trading system you would need to exactly define the lot size and if and when exactly you want to open or close a position.
If you have a good recipe and exactly follow the steps, you should be able to create a good result.
If you want to join this journey and benefit from the findings to improve your own algorithmic trading system, just keep watching this automated content and be my guest!
So what do you think? What could be a good recipe for an excellent trading system? Let me know.