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, it is a mathematical model for making correct trading decisions automatically.
Instructions
Step 1
Determine what type of trader you are. Which trade suits you best: long-term or intraday. Or maybe you like to analyze charts every day, week, month or year? Also determine how long you can keep the position open. After answering the questions, you will be able to choose the required timeframe (the time interval used to group quotes during the construction of price chart elements) for trading.
Step 2
Find the indicators you need to help you spot a new trend. After all, one of your main goals when creating a trading system is to identify trends as early as possible. This 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 fast moving averages cross the slow one. This is the fastest method for identifying a new trend.
Step 3
Identify the risks. When developing a trading system, it is very important to determine how much losses are possible for each individual trade. Decide how much space you need for your position so that your stop does not close too early. At the same time, limit the risks to the trade.
Step 4
Determine the entry and exit points of the position. Enter the market as soon as the indicators give a good signal and the candle is closed. For the exit point, you can apply a trailing stop, which means moving the stop loss level by a certain number of points, depending on how much the price has moved in the direction of your profit.
Step 5
Set a target and close the position when the price is able to reach the target level. Do not leave the position ahead of schedule, no matter what happens. Stick to your own system.
