In this video, we’ll look at one of the biggest problems in trading and how to solve it. And that’s why it’s hard to know what to do when the signal changes. After all, many traders think that the right time to close all open positions and open a new one in the opposite direction is when a signal changes. There are, in fact, strategies that are based on this idea, but you don’t have to do it this way. The new Platinum System is different.
The version shown in the video is one that was made by using MQL5. And it’s based on the opposite idea, which is that an open position has only one purpose, which is to make money. So, when the signal goes the other way, we don’t close the position in this case. In a trading system, the entry is not the most important thing. Of course, you need a clear entry, and we couldn’t make clear rules without a clear entry. But the point of entry doesn’t have to always point in the right direction for a system to be profitable. The problem with this is that when there are a lot of open positions, like right now, you always have to ask yourself, “Should I close my position now?”
Should I stop or is the loss too big? In this example, we only have a $10,000 account, and the equity is now worth less than $9,900. This might get a lot more in-depth with a longer drawdown. And the longer a situation like this goes on, the less sure we traders are and the more we ask ourselves, “What should I do now?” Should I accept that I’ve lost, or should I hope that things will get better? I’ve been asked this question twice in the last week, so I’d like to share what I think about it. And that’s just to try things out until you’re sure how you want to act in a certain situation. In a soccer game, there are boundaries, referees, and goals. Most soccer games are 90 minutes long.
At the end of the period, the winner is the team that has scored the most valid goals. Such rules are just what you need to be able to tell if a result looks good or bad and if you want to keep going or not. After all, soccer players almost never leave the field after giving up three goals because, after all, the game is no longer worth playing. So, if you feel like your trading results aren’t what you expected, it’s usually because of a few simple things.
The first problem is that you haven’t set any rules. That means you show up to a soccer game with a tennis racket and field hockey gear.
Probably your account is too big, which is the second problem. If you start to worry that your account won’t make it through the next night and can’t sleep because of it, your account size is probably too big to let you sleep well in the future.
The third problem is that you depend on making money. And if you already know exactly what should happen next, it’s almost certain that the opposite will happen.
But there is also a solution for each of these problems. And sometimes the answer seems to be just to wait long enough. Since then, our system has already reached February, but not much has changed. This can look a lot worse in real life and make you feel a lot worse than it does in this strategy test. And that’s exactly why it’s important to do a lot of these strategy tests ahead of time so you know how to act when the time comes. Because this is where I am with my Platinum System right now. The direction of the Euro Dollar has changed.
We have a small drawdown, and now you have to ask yourself, “Do I still want to trade this system next week, next month, and next year?” For me, the only way to give a good answer is to do enough testing and set clear rules before I get into the situation. Because only then can I act in the situation according to my rules. Okay, I guess that’s all for today. Thanks for watching, and we’ll see you in the next video.