Why a trading system? Example Trading System

Why a trading system? Example Trading System

To reduce the influence of psychological factors and systematize its trade in the currency market, traders use trading system. The role of trading systems is in the preliminary planning of transactions, just as the business plan regulates the development of the enterprise. So, what is a trading system?

Trade system

a set of rules that determine under what conditions and in what order are carried out opening and closure. Terms of trade systems should be clearly defined to avoid a dual consideration of the situation.

It is hard benchmarks, the conditions for entry and exit from the market is key in reducing the psychological pressure on traders in the time of the adoption of important decisions about the transaction. The trading system must be formulated trader before it starts to be traded, and then conducted the transaction must strictly comply with the rules of the system.

Robert Pardo

Design, Testing and Optimization of Trading Systems

Design, Testing and Optimisation of Trading System

Various commercial systems have a different set of rules for determining when to enter the market and deal with it. Complex trade system imposes a lot of conditions for receiving the signal, while often complex systems is not easy, and complicate the life of a trader. It is therefore important to strike a balance between the need for additional information and sufficiency. For beginners is a good trading system, studied and tested them personally on historical data, is saving around in the whirlpool of price movements, accompanied by explosions at the time of release important news.

Trading systems determine the detailed work plan for the trader at the time frame for which designed the system. You can talk about trading system, designed to trade on daily candles, on time or even 10-minutes. Which system is more suitable - it's you, then a lot depends on free time, and on your financial resources, but above all, it depends on the goal that you set for yourself, coming to the foreign exchange market.

The trading system must take into account, for any currency pair, it is created. If a trading system developed for a pair of EUR / USD, it will give the stated results from this currency pair. This does not mean that it will give negative results for other currency pairs, for example, GBP / USD. It may be that it will work well on several currency pairs. But it must necessarily personally check: may have to adjust something in the rules, for example, the size of orders Stop Loss or Take Profit.

In the process of building a trading system the trader must decide to which areas of the market, he prepares the system - for long-term trends or to the side corridors. Of course, the system may have different properties, be combined, but still need to consider such a moment: the classical trend of the system may work poorly in the corridor, and, conversely, a system to work in the lateral market - not the best choice to work in the trend. It is therefore extremely important task for the trader is to understand what the market for land, he builds his system on which parts of the current system will work and how such a potentially profitable sites to determine, being on the right edge of the graph, for which - unknown to us the future.

Quite important role in the construction trade system is the value of the traded lot (the sum of the transaction). This value may be unchanged, but may vary based on previous transactions (this is called capital management and money management). Each approach has advantages and disadvantages, and the basic scale of assessment is the ratio of risk to the possible profit. The higher profitability, the typically higher accepts the risk, the lower the risk, the lower the profitability of transactions.

To determine the moment of entering the market trading systems provide signals using various tools of graphic and mathematical analysis. Applied levels, lines, graphics, shapes, plug configuration, technical indicators. In one system may be more important indicators in the other - the shape or levels, it all depends on the preferences of the trader.

Theme design of trading systems is extensive, it should be discussed in more detail, and after a beginner has studied a broader range of decision-making tools, learned about the nuances. Here we give an example of a simple trading system.