six setup for making strong trading strategy

The first step.

Determine the time frame.The first thing you need when you begin to create your trading system is that you know what is your business type.That is, are you a daily dealer or trader in the long run ?Do you like to look at the charts on a daily level, weekly and monthly or annual ?And for how long you want to stick to your position ?All this will help you determine the period of time that will be used in the appropriate trade you , even if you use more than one time frame, do not forget the principle is the use of a key time frame in your business, which will help in identifying the main commercial bookmarks then smaller than the main entry and exit transactions in a timely manner time frame .

The second step.

Chosen technical indicators for help you to determine the direction.

 

The trend-setting early is one of our most important goals so you should use the indicators that help us on that .For example, moving average is one of the most popular indicators that help traders to distinguish the new trends, they use two types, fast and slow and wait until the rapid crosses the slow, this is the breakthrough moving strategy.

 

 

In the simplest shapes.Penetration is moving the fastest way to distinguish trends as well as the best way to identify the new trend.And of course there are many other ways to distinguish trends but moving is the easiest and most user-friendly.

The third step.

Look for indicators that help to confirm the trend.

 

So do not fall under the direction of these losses false entry signals, you should be looking for additional indicators enables you to make sure the trend whether it is true or not .Can confirm it through the use of other indicators.There are a lot of good indicators to confirm trends, but I like :

MACD. 

RSI. 

Stochastic.

 

Also become more familiar with various indicators would include this to your trading system.

The fourth step.

Determine your own risk.

 

When you develop your trading system, then you must specify the danger that might go wrong, many do not like to talk about the loss, but a successful merchant who is thinking of the limits before losing to think in profits.For funds that may lose they vary from one person to another, you must decide what is the size of the oxygen chamber that sit out, which can only breathe and suffocate.At the same time does not make a big danger level, and later you will learn with us about how to manage money and reduce risk in the next lesson, administration money plays a big role in determining the extent of risk for each individual trade.

Step Five.

Identify the most important entry and exit points.

When you specify a limit losses amount you can run the risk of them, came a step to determine the point of entry, as well as out commands to trade points, and some traders prefer to enter as long as their indicators give them good references so, even if the candle is not yet closed, or wait until the closing.But we see that it is better to wait until the close of the candle, and start a new business with a new candle, because it might interfere in the center of the candle, and all your indicators give a good signal, and suddenly moving the market reverse your trading and fool you, it all depends on trade style Depending on the commercial character, perhaps be peaceful or aggressive person or neutral.

 

But when you go out, you have several choices:

First choice :

Is to change the place of stop-loss, meaning that if the price moves in your favor move the stop loss with him also to be in favor of any move limit your loss with profit move.

Second choice:

Is to define your target profit and graduated when you arrive at these goals, and for how to calculate the target, this back to you, some traders choose to support and resistance levels as targets for profit, and others choose a certain fixed amount of points as target's profitability for each trade they make, anyway Set your goals to focus not He graduated early, no matter what happens stuck your strategy set by the system.The other way out is the "method of assembly" For example, you can put the base where if gave you your indicators signal a possible reversal of the direction of here immediately go out of your business.

 

Step Six.

Type your rules of the system and you follow them.

 

This is the most important step to create your own trading system, to record your strategy pursued by the rules and record anything related to the success or failure and you must comply with all the shows you as a result of this strategy, and stick with it, whether success or failure.

How to test your strategy ?

The fastest way to test your strategy is to review the previous charts for the currency pair, for example, and move the chartForward one candle each time and imagine you're in a real market and took the decisions and start your trading imaginary according to your strategy, and record the result of every decision and be secretary does not cheat yourself, record profits, and losses, and the percentage of your earnings, and the proportion of losses, and if you are happy result, go to the next test, which real experimental trade program demo accountThe dealer in the real market.Dealer demo system for at least two months, this will give you a better feeling for how to trade with your strategy when the market is moving, there is a big difference between the trade on a real account and trade on a demo account must be tested yourself more time. After two months of experimental trade will see if your strategy is good enough and bring you good results or not, then decided whether to open a real account, or you are still in need of training and development of your strategy.

One final tip.

You must be sure of your strategy without hesitation or fear, only here that the strategy will succeed.