A well-built and thoroughly tested trading system is inherently an asset in which all people invest their money. That is why building a portfolio of trading systems is no less important for a trader than building a portfolio of stocks for an investor. At the same time, all securities traders are divided into two groups: traders who buy securities only in order to sell them at a higher price and investors who buy shares in order to have a stake in a good firm.
Instructions
Step 1
The market can be trending (which has a directional movement) and flat (the final price movement). When compiling a portfolio of trading systems, it is advisable to take into account that both systems (both trend and flat) work.
Step 2
Apply different types of market analysis whenever possible. It is necessary to pay attention to what tools are used to create a trading system. At the same time, you can have as many as five trading systems that are based on moving averages, but it is still better to use fundamentally different instruments. For example, you can use technical analysis figures, fractals, trend lines, channels, Elliott waves, candlestick analysis.
Step 3
In a flat system, in addition to the Stochastic and RSI indicators, you can also use regular or horizontal price channels, candlestick analysis, Fibo levels and fractals. However, you don't need to use everything. Choose only those that are most understandable to you, on the basis of which you can build a profitable trading system.
Step 4
Strategies must be developed for different stocks. For example, if your trading system is built on the basis of moving averages, then in this case it is better not to trade only the shares of one company, but you need to modify your trading system for the shares of other companies. Thus, even if one action goes against you, the others most likely won't.
Step 5
Capital Management. Determine in advance the maximum drawdowns of each system, at which trading will be temporarily suspended. Allocate the required percentage of capital for each individual trading strategy. Change the trading lot if necessary.
Step 6
Use a trending strategy. When the price has been in a flat for a long time and you expect that there will be a breakout of the channel, use the following tactic: instead of buying, for example, 100 shares with a full lot on the market, split the position into 2 equal parts (50 shares each). That is, at the time of the channel breakout, buy 50 shares and a little later acquire another 50 shares, even if at a less favorable price. Thus, in the event of a false puncture, you will receive a stop lot not for all 100 shares, but only for 50.
