All those who began to study the theme of exchange trade are read or heard a sharp traders that need trading system. TC is a sequence of actions for the trader. At the outset I wish to note, those of you who are looking for ready trading systems on the Internet spends time in vain. Definitely, on foreign trade systems can be earned, but not in the market and reselling them. Why? The answer is simple. Not everything can be put on paper. Even if a person were sincere goal to help someone, then publishing your trading system (TS) will not be able to pass that part of the subjectivity that is inherent to him. For example, consider a few men and ask them to describe the girl of his dreams. Description of the match in the majority, but that does not mean that they are looking for one and the same girl and only one of them has a chance to get it. Each of them will find your soul mate, he sought, and which would fit his description, but it will not be twins, but very different people.
So it is with trading systems. How my friend did not try to explain to me his method of trading, I understand it understood, but could not be used successfully. This is the difference in the vision of the market. Examples of subjective vision of the market and the whole set. Look at the clouds, you’ll see something there, but try to make this saw someone else, not occupation of the lungs.
All traders are looking at a falling market, understand what to sell, but choose the moment for sale, here is an art. This article will try to sort out this issue.
Just want to say, where will the market in the next couple of minutes, no one knows. Even those who are satisfied with the hunt for the feet, or attempt to move the market to where it profitable to do so with caution and given the reaction of traders. The reaction of traders is calculated easily using simple techniques of technical analysis.
So, let’s investigate. All trading systems are divided into two groups. First – it rules that a trader writes on a piece for yourself and use them without question, without thinking, and creativity. The second category is a mechanical trading system. In the terminal MT4 is a programming language. If you are able to move its trading system, programming language, the terminal will be for you to trade. The second group is a topic for another article. This article will look at how to create and test trading systems. If you ever want to automate their activities, in any case, you must first write a trading system on a sheet of paper.
Forex trading systems, the establishment of the trading system trading system I have goals. The first goal is survival. The trading system should give a chance for a trader to survive a series of failures and stay on the market. The second objective of the trading system to earn money. Be kept at the zeros is not a pleasant occupation.
Returning to the first goal and techniques that will enable her to achieve. The aim is to survive is more important than money. All traders are divided into three categories. Those who trade in emerging markets, those who trade in a falling market and those who trade in sideways markets. That’s all. There is nothing else to think not worth it. All the rest of the evil one. To create your own vehicle you must decide to start, what markets you will sell best. Suppose you like a falling market. In my opinion, they are the safest. As the market drops more impulsive candles, and it is difficult to stop. We decided on the market, the next question is when the same login? Here to help the trader to come indicators. It should be noted that all indicators take data for its construction is those that are in existence, so they show what it was. They can not even see that there is now, because until the last bar or candle is closed, we will not know the reading an indicator, I’m not talking about how to look into the future. Again, no one knows where to go for money in the next minute. So, I chose a falling market. Wounds falling mean trend indicator set. For example, MA. Falling market is generally very fast, investors are jittery people, so expect a serious rollback of moving and transporting it is not necessary. Stop a little setback there is also good. We went up for sale and wait. There are situations when the market drops in the channel. It is easier to sell a line of resistance and closes on the line guide. There should not be greedy. If the price has reached a landmark, it is best to take profits and penetration of the guide to enter the market for a new one.
Many traders lose money because of improperly placed stop or greed. Suppose the price was in our side on 50 points, the trader took fright and closed the deal. And the price has taken, and 200 points passed. In this case, the trader jumped out early from the market. The following two consecutive losing trades eats these 50 points and a bite of your deposit. Consider the second option, the price was 200 points, stopped, stood and jerked back, so yes, that drove the deal still in the negative. This means the position overexposed. From the above we conclude that the exit points should be stated as clearly as the entry point. Out of the market penetration can be either the MA or you can put the oscillator on and off the divergence. Here everyone to taste choose for themselves. The only condition is mandatory implementation of its rules as input and output.
trading systems forex trading system creation Once decided on the entry and exit points should be familiarized with the protective order and warrant of the profit. This is perhaps one of the most important points. If the initial chance to guess the movement is 50%, then using these two orders in the ratio of one to three, you can get a good result coming into the market at any given time. Without analysis. True, I do not recommend it. Still, the analysis shifts the chance to guess the direction in a big way, which gives an additional advantage. So. We decided that a more successful trading profit should be three times as many foot. This will give us the chance to stay afloat, even if a good deal will have three bad ones. And, considering that the original a chance to get 50 percent, then emerges a pretty good prospect.
Next you must select the most appropriate interval for the job. That we need to determine the magnitude of the protective stop. Ideally, it should be more than the daily fluctuations, but since most start with the smallest possible deposit, we have to consider, at least, the volatility of the pair at a certain time interval. While I believe that it may not work. So. Suppose we have chosen the interval 30 minutes with the volatility of about 40 points. Hence, our protective stop should be greater than this value. This will give us a chance at a bad entrance to get out with small losses. Although I am not sure that when you see that the price went against you, then when you start rolling back exit. This is a lot of professionals, beginners usually wait until the work stop. Now, knowing the value, we can place stop and profit. Stop 40 pips, so profit is 40 * 3 = 120. It should be noted that if the deal between profit and delivered is a level or target price, it’s a bad deal. Need to reduce and stop respectively profit, or simply do not enter into a transaction. That value of 40 points is a rough guide. If you are working on the channel and the price of the support line, the stop can be hidden behind the line, it may be necessary to 20 points. Then you can safely put a profit of 60 points or more, if the channel allows.
Forex trading systems, the establishment of the trading system we have finished with entry and exit points, finished with a protective stop and profit. There remains the last moment, which violate virtually all. The size of your foot should not exceed 1-3% of the deposit. Than 1%. What does this mean? Suppose the price of one item on the chosen pair is $ 10. By setting a protective stop at a distance of 40 pips from the price we have a potential loss in firing foot, $ 400. Here you need to take into consideration the spread. If it is 5, then the loss is $ 450. Then our security deposit must be $ 45,000. It is at the risk of 1%. If we assume the risk of 3%, respectively, the amount will decrease to 15 000 $. If you do not have such a sum, then left with two options. The first is to reduce the protective stop. It should be noted that the market is market noise, the response to some news and a lot of different factors that make the market impulses against the current trend. Therefore, little feet will often fly. That will sooner or later to lose money. The second option to find a broker that will allow you to trade in smaller volumes. Today, it’s real. Let’s say instead of $ 10 per item to trade $ 1 per item. This, of course, reduce your earning potential, and is currently working against the introduction of trading at the smaller size of the transaction. But it will increase your chances of remaining in the market. Lack of capital is the main reason for the loss of money trader. Many accept the risks of 20-25 percent or even higher. This means that the four losing trades kicked you out of the wound.
So we created a simple trading system. I note that to make a complicated trading system makes no sense. Guess the market direction is not possible. I specifically in the text using the word “guess” to emphasize the fact that the correct input is not the goal of the trading system. The correct input only increases the chance of a profit. But take the time to predict it’s a waste of time. If not entered correctly, and incurred a loss before Saturday’s forgotten about it. They went well squeezed out of the market at most. Returning to the theme of creating a system it must be tested. You can test for the story, but it is more suitable to test just the principle. But look at how your vehicle can be on a demo account. You can access it from any broker, but it is better to open with someone with whom to work plan. And the amount that going to open a real account. You can open a demo account and earn a million, and as soon discover the real in 2000 we immediately lose. Therefore, the situation must be as real as possible. By testing the vehicle on a demo account you should not strive for profit, you need to become a robot and act according to your trading system. And, with the final output must analyze it and decide whether to open an account or need to change something.
Well, that’s actually all you need to create a vehicle. Stirlitz said that last phrase to remember. So I’ll write the last sentence. Risk of not more than one per cent per transaction. And do not rely on guessing the future. Today it is not possible. If you have not guessed then quit. If you guessed that the market Squeeze every last penny.