Stock Trading Systems - The 3 things you need to succeed as a trading system designer

Have you ever tried to develop a trading system or looked at a trading idea and been frustrated or deflated because it just didn't work? I've been doing this for, I've been trading now for 18 years and I've been trading systematically for over 15 years. So I've tried to develop a lot of different trading systems and I've had to throw away a lot of systems as well. And even now after so long, I still have to throw away a lot of trading ideas. So. So if you've done some trading system development and got frustrated because your idea just didn't turn out to be profitable, I want you to know that you're not alone. This is perfectly normal. It's part of the process. But you got to have the determination and perseverance to push through that, to find the good trading ideas. Because today when I sat down, I set myself the goal that before I turned off the computer, I was going to have a finished trading system that was profitable, good enough for me to put my capital against. That I was confident in. And I went through today four trading ideas, four completely different systems. I had to throw away all of them because they didn't work before I got to the one that actually did. And when I got to that one that did, not only is it profitable, but it adds value to my portfolio, it's diversified and it dramatically reduces the amount of time and effort I would have to spend trading. Because the system I developed today is a once a week system that's going to take you about 10, maybe 20 minutes a week to execute. And yet the returns are exceptional and the risk or the drawdown of the system is also very, very good. So what I realized in going through this process and I had my share of frustration today because I had to throw away those four different trading ideas, like I said. But there's actually three things that you need in order to succeed as a trading system developer. If you want to develop trading systems, you need these three things. The first one is passion. You need to be passionate about the idea of finding things that work in the market. Because yes, trading is about money. But you've got to love the investigation, you've got to love the hunt, you've got to love.

Looking for things that work and ways to make money. Because there's a lot of work that goes into developing a set of rules, a trading system that works. If you don't have the passion for that, you're not going to make it, you're not going to get through.

All of that work. And you'll give up when you get deflated. But I love doing this and I've loved it for 18 years now. And so I still get excited when I find a new rule that works or I have a new idea or I write it down. So you need to have that passion. Passion is the first thing that you absolutely need. The second thing you need is a process. You need a process to develop and test your trading rules. Now I developed the Expert's Guide to Backtesting and the Trader Success System to give traders a process to follow. Now why is that important? Well, the process is important because without a process, you end up fumbling from idea to idea, from rule to rule, and you don't have a structure to tie all of your work together. Now, with the process that I teach in the Trader Success System and in the Experts Guide to Back Testing, which comes in a Trader Success System, with that process, I can go through an entire trading system development cycle in a matter of hours. Now that means I can either have a system ready to go or get to the realization that the system is no good and throw it away in just a couple of hours. And what I've learned over the years is because there are, there's many ideas that work, many systems that work, but there's more, many more ideas that don't work. And so in order for you to succeed, you've got to get to the point where you can throw your bad ideas away more quickly so that you can get to the good ideas. It's kind of like churning through the bad trades, you know, getting stopped out, stopped out, stopped out, so you can get to the winners. You've got to churn through the bad, the trading ideas and throw away the bad ones so you can get to the good ones. Now, like I said to you before, I threw away four trading ideas today before I got to the fifth one, which is a fantastic system, which I really, really love. I'm super excited about it and I'm going to put it into the trading system collection and it's going to add a lot of value both to my trading and to many other people. So you need that process to follow so you can just go step by step, go through the motions and either approve the system or throw it away. The process makes it that much quicker. When I implemented this process in my trading system development, it took the time down from months to hours. And that's what you need because you've got to throw away your bad ideas more quickly or determine that they're bad ideas. And throw them away more quickly. The third thing, the two things you need so far, you need the passion for it and you need the process. The third thing you need is perseverance, because in no other endeavor anywhere in the world do you get more negative feedback than in trading the markets. Now, it sounds like a pretty perverse thing, but to me, that's pretty exciting because I want to succeed where other people fail.

That gives me the perseverance to keep going. I'm happy to take losing trades following my system taking losing trades because I know the winning trade will come and that will make me a ton of money. I'm also happy to test many different trading system ideas and throw most of them away because I know that the one or two gems that I develop will make me a ton of money. So you need that perseverance if you're to succeed, because there's going to be a lot of setbacks and there's going to be a lot of small losses and there's going to be a lot of ideas that you have to throw away because most things don't work in the market. But if, if you're going to get there, if you're going to make it and develop systems that are insanely profitable, that will give you your freedom, that will stop you from blowing up your account and will allow you to make money consistently for the next 10 or 20 years. You need the perseverance to get through those disappointments. You need passion. You need process. You need perseverance. That's my message for today. That's what I relearned. Throwing away four trading systems to come up with the one gem today. Let me tell you that one gem is absolutely worth the effort because that system will make hundreds of thousands of dollars in the next couple of years, and it will add to my portfolio, it will smooth my equity curve, and it will make my return so much better with very little incremental effort. And that's what you need. So passion, process, perseverance. That's my message for today. My name is Adrian Read. This is enlightened stock trading. And if you want to improve your trading, click the link below and download my trading system confidence cheat sheet. And it will show you some of the process that I use to build confidence in my trading system so I can execute them flawlessly to make money. My name's Adrian Reid. See you in the next video. Bye for now.