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[About Trading Framework]
The trading framework of institutions is quantitative trading. The so-called quantitative first looks at factors. What are factors? For example, today's major news, whether it's negative or positive. For instance, the current liquidity in the market. Additionally, some technical indicators of candlestick charts can all be referred to as factors.
However, more factors are not necessarily better. Different trading frameworks will use different factors.
But please remember one thing: all factors within a trading framework or a trading model must be quantifiable. What does this mean? It must be describable in mathematical language.
This way, you have a trading framework or a quantitative trading program.
So what do you do after having this trading framework? Use a large amount of historical data for backtesting, generally we will conduct backtesting with over 4 years of historical data.
Backtesting focuses on: win rate, profit-loss ratio, drawdown, and Sharpe ratio. Of course, there are more data points to pay attention to, but these few are relatively simple. They indicate to some extent whether you can be profitable in the long term and how resilient your model is to risks. The Sharpe ratio indicates your risk resistance capability.
The above backtesting data has all been validated, with a positive mathematical expectation for long-term profitability. What you need to do next is to strictly follow this trading framework. There should be no feelings or emotions involved.
So after listening, you will find that our trading is different from retail trading. Our trading method is more scientific. What does scientific mean? Science can be described by mathematics.
The purpose of providing so many plans and strategies to the community is to gradually help everyone learn this scientific educational framework. This way, you will find that trading can be a bit dull. There are rules for when to enter and when to exit, leaving no room for any thinking, emotions, or feelings.
But he can make money in the long term.