EagleTrader Exclusive Interview | Taming Risk: How Traders Use a Rule System to Overcome Human Weaknesses

The fluctuations in the foreign exchange market are like a mirror, reflecting the inner order and waves of every trader. For Li Shuailong, a contracted trader who has just passed the EagleTrader exam, what this mirror reflects is a path built with clear rules. It took him 16 months to complete a key transformation: from relying on trial and error based on feelings to rational trading that believes in systems and disciplines.

The driving force of trading

For Li Shuailong, trading is not only the pursuit of profits, but also a practice of self-improvement. The profits brought by the market are certainly attractive, but what makes him insist even more is the “growth and gains in establishing his own trading system.” This dual incentive gave him an extra sense of certainty when he invested in the profit-sharing account full-time.

Technology is the main focus, and the system is the keystone

In his trading decisions, technical analysis accounts for 80% of the weight, fundamental analysis accounts for 14%, and intuition and experience account for only 1% and 5% respectively. This model that relies heavily on technical analysis stems from his firm belief in systematic trading. He believes that the key to long-term stable profitability lies in “resolutely abiding by the trading system rules that have been verified by the market, resolutely executing transactions, stopping losses in a timely manner, and shielding against human interference” while retaining the ability to adapt to changes.

Four months ago, he made a major revision to the strategy he used. In the future, he plans to further optimize the strategy’s response to volatile market conditions and gradually expand the profit-loss ratio. This attitude of continuous iteration reflects his persistence in improving the system.

Backtesting and the power of time

In order to eliminate the luck factor in trading, Li Shuailong’s method is to “establish a trading system suitable for the current trading variety and verify the feasibility through a large number of replay tests.” He believes that only by extending the timeline can the “hard power” of the system be truly tested.

Bottom-line Thinking and Execution

When asked about how to deal with unexpected losses in heavy positions, he made it clear that he would decide whether to stop losses based on the signals of the trading system on the premise that the bottom line of a single loss would not be exceeded, and emphasized that “there will never be a situation where he continues to add positions in the hope of winning back.” This kind of discipline also applies when profits are retraced – as long as the market does not have a system-defined reverse trend, he will continue to hold and retain profits at the right time.

The baptism of liquidation

LiShuai Long admitted that he had experienced a liquidation, and it was during a period of poor economic conditions. He recalled his mentality at the time: “First, I felt uncomfortable, why the market always went against me; then I went to the gym to relax; then I reflected on what was wrong with my trading system; then I started practicing in retreat, doing backtests over and over again to verify different trading systems.” This experience became an important turning point in his trading career.

Diversity of market ecology

Whether it is a stable market or a highly volatile market, he can adapt to it, and believes that “more volatile markets can better improve my trading system.” He divided volatility into two categories: first, sideways fluctuations after large market fluctuations; second, intense long-short games caused by major international events. This classification reflects his careful observation of market ecology.

In terms of risk taking, he takes up 30% to 40% of the risk he can bear on average per transaction. According to his experience, after the maximum retracement occurs, it usually takes 2 to 5 trading days to return to the previous highest net value.

How to reduce risks

For new traders, he shared two core suggestions: First, “Before establishing your own trading system, you must not use capital to try and make mistakes.” He also mentioned that EagleTrader can help traders establish the system as soon as possible with less capital; second, “You must firmly implement the rules of the trading system and do not be dominated by human weaknesses such as greed, fear of loss, and gambling.” He emphasized that only by defeating human nature can traders reap the future.

In Li Shuailong’s trading world, there are no myths of intuition or legends of desperate gamblers. His story calmly tells how a trader transformed “discomfort” and “introspection” into the motivation for retreat and backtesting, and how he locked the weaknesses of human nature into the cage of system rules.

His growth path clearly points to one core: on the road to professional trading, a safe trial ground that can integrate “system construction”, “discipline polishing” and “mind cultivation” is crucial. This is also the core value that EagleTrader is committed to providing – paving a necessary path from trial and error to stable output for every trader who believes in the system, completing the leap from rules to instinct.