How to create a trading system

A trading system implies an order of fundamental as well as technical indicators, in which the simultaneous achievement of the considered values ​​gives a signal to sell or buy a trading instrument. In practice, this is a mathematical model for automatically making the right trading decisions.

Instruction manual

1

Determine what kind of traders you belong to. Which trade suits you best: long-term or intraday. Or maybe you like to analyze the charts every day, week, month or year? Also determine how long you can keep the position open. After answering the questions posed, you can choose the necessary timeframe (the time interval used to group quotes during the construction of the elements of the price chart) for trading.

2

Find the necessary indicators that can help you identify a new trend. After all, one of your main goals when creating a trading system is to identify trends as early as possible, as far as possible. That is why you need indicators that work in this direction. At the same time, moving averages are one of the most well-known indicators that are used to identify a trend. You can use two moving averages (one should be slow and the other fast) and wait for the moment when the moving fast crosses the slow one. This is the fastest method for determining a new trend.

3

Identify the risks. When developing a trading system, it is very important to determine how possible losses are for each individual trade. Decide how much space is needed for your position so that in the foot it does not close too early. At the same time, limit the risks to the trade.

4

Define entry and exit points for a position. Enter the market as soon as the indicators give a good signal and the candle closes. You can apply a trailing stop for the exit point, which means moving the stop loss level by a certain number of points, depending on how much the price went in the direction of your profit.

5

Set a target and close a position when the price can reach the target level. Do not leave the position ahead of schedule, no matter what happens. Stick to your own system.