Analyzing Stock Trading Systems

A trading system is everything when it comes to surviving the unpredictable and difficult Stock Market. It's something I mentioned countless times over and over in this blog and on X (Twitter). I've never disclosed my trading system, nor do I have any plans to. However, the goal of this article is to break down the bigger details about my trading system and provide hints and tips to help you come up with your own winning system.

The Trading System

My trading system is quite unique. It’s something I’ve perfected for almost a decade with countless hours of backtesting and real-time analysis. It’s definitely something I have yet to see in any public trading system that even remotely resembles it. Throughout the years it has become quite profitable. I have managed to beat the market over the last decade using it. There are years when the market beats my returns but as a whole, over the last ten years, my system has come up at the top!

What people may find hard to believe about my system is I can count the number of trading losses I've had since 2016 on one hand. Here's a breakdown of my stats since then.

stock trading system winning winrate

I've had 55 wins and just 3 losses. Where two losses were less than $1000 on experimental option trades. The other loss was during the COVID-19 lockdown where I decided I would sell $SPY and put the money in $SPCE because the return would be greater (which ended up to be true).

Why I Have a 95% Win Rate

Without discussing my trading system in detail (as giving it away would remove the edge I have over everyone else). I'd like to give a few tips hints and facts about my trading system that may help you in your trading journey.

Below are a few facts, and tips about my trade system that help me become a winning trader
  1. I rarely trade options. Options put time constraints, there is too much noise short term, and options are designed for you to lose.
  2. I don't trade as my sole source of income. I have a regular job. With my trading system, I do not need to stare at the screen non-stop. You shouldn't have to either. This alleviates a lot of pressure and I don’t need to force a trade. your goal should be trading as a supplement not your sole source of income!
  3. I don't let large swings affect my emotions. There are times when I am down 6 figures due to volatility. None of it affects my emotions. Because I only invest in what I’m comfortable with.
  4. I trust my trading system. I've had this system for the last 10 years. However, Market conditions continually change so do the nuances of my trading system. So even when I'm on the sidelines I'm still studying and thinking of ways to adjust. In other words, always pay attention to the market and look for new edges to exploit!
  5. As per #4, I don't trade just to trade period. I do have FOMO but I try to take a break and walk away from the keyboard. I eventually got over it.
  6. As I mentioned in #4, Market conditions continually change. At the moment I love trading select stocks that went parabolic and then proceeded to crash. This is a tricky area as some of these stocks will never recover from their peak highs. This is where a strict trading rule set and experience come into play.
  7. Whenever I choose to invest in a stock, I do some basic fundamental analysis. I need to understand the business model or be somewhat passionate about the company. Otherwise, when things go bad, I may have trouble holding on.
  8. I don't get greedy, sometimes I will sell for <1% profit if I'm just not in the mood for a trade. I can change my mind! I’m very flexible and understand my initial thesis can be wrong in the blink of an eye.
  9.  I don't read other people's opinions, that's just a death trap. Even as an experienced trader, I can be affected. Hence you can see I rarely follow other traders on Twitter (X).
For those who are dead serious about trading, I have written an in-depth article that provides a step-by-step process on how to create a trading edge using your current trades. The information provided here is something I have not seen anywhere else on the internet, as it really competes with those trying to sell you trading services. After, all if I can teach you how to fish, why would you continue buying fish from others? 

Ultimately what makes a successful trading system with an insane win rate is a world-class technical analysis technique as well as hard-earned experience( I continually learn every day, as I don’t trade perfect and make countless mistakes). There really is no shortcut to experience, sometimes you just gotta learn through the pain and losses. 

Hopefully, this article inspires you to improve your trading and brings you one step closer to your trading goals. If you are looking for more stock market educational content, check out How To Create a Stock Trading Gameplan.