Tuesday, October 20, 2009

Create Your Own Trading System

Goals Of Your Trading System
  1. Your system should be able to identify trends as early as possible.
  2. Your system should be able to avoid you from whipsaws.
6 Steps Setting Up Your System

1. Timeframe
  • What kind of traders you are. (Swing or Day Trader?)
  • Which timeframe you will use to trade.

2. Find Indicators that help identify a new trend.
  • Use Moving Averages (MA) to identify a trend.
  • Use 2 Moving Averages (1 fast & 1 slow) and wait until fast crosses slow.

3. Find Indicators that help CONFIRM trend.
  • MACD, Stochastic, RSI.

4. Define Your Risk.
  • The amount you're willing to lose.

5. Define Entries & Exits.
  • Where to enter & exit to get most profit.
  • Wait until candle close.

6. Write Your System Rules & Follow It.


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