Bonus Post : Trading System

Here’s the Bonus Post as promised:
I’m not gonna write about my setup. It’s obvious I used the Wedge Technique. I’d like to share little secret that actually pretty simple. To become a profitable trader, you only need one setup that cover essence of Price Action. There’s too much things to talk about. In this post I will focus on System Trading.
This is what I have in my Trading System:
1. Price Action based System.
Price Action work. Enough Said. Maybe there’re some traders profitable with indicator like MACD, Stoch, etc. But with Price Action, I can do pre-emptive strike. I convince the other indicator not yet show their confirmation. Of course the risk is I often got stopped out. But when I’m right, I can wiped those little stop out plus profit.
2. Consolidation information.
This is maybe not many indicator have it. The consolidation give more information rather than “Shoot : Hit or Miss” setup. If I’ve been stopped out in consolidation, it doesn’t mean the setup is not working. I can re-entry multiple time in the same price, stopped out back and forth. That’s the risk having a tight SL. But the more consolidation, the more powerful it can break. It’s like compounding the powder to do firework. It’s natural to averaging up after long consolidation. I did it today because the firework usually fly much much higher than usual and can wipe five, even ten little losses plus profit. And consolidation is the core of wedge technique.
3. Semi mechanical entry.
I rarely enter the first signal at single wedge. But I entered first signal on double wedge. It’s a little discretion in this trade but still in the wedge zone. It’s hard to define it with words. It’s dynamic rules on static technique. I treat Crude Light different with Currency. But it all comes down to the same Price Action essence.
4. Weekly backtest and review.
This is a homework for all of us day trader. Even if we have a bad week, it doesn’t mean we have a bad system. While in backtest, we can flashback what we did wrong, and fix it in the next round. I always gain confidence even if my performance was bad knowing that my system work well. It means I still can use it. Sometimes it’s just a matter of execution.
5. Diversification.
I know some of traders think specialize one instrument over and over again make him an expert in this area. Let’s say ES. Sometimes this bugger just chopped and whipsawed all day long. So, you get a chop gain or whipsaw gain or even losses. Here’s another secret stuff. Diversify the trade to other instrument let me ride the right trending one and dump the whipsaw trade. I love currency because of this reason. I can diversify which one give me the best signal, I enter. I enter every signal, if all work out, good. If not, most of the time at least one instrument become the savior of the day.

I hope this post may give an inspiration to treat your setup and maybe find the right one. Too many times traders (myself included) change system while maybe we only need to master the old one more thoroughly. There's too much information in just one system.