Developing a Mechanical Trading System Part 1
Developing a Mechanical Trading System Part 1
What is a Trading System?
A trading system is a complex group of rules, instructions or parameters that will output an entry or exit signals for any given equity.
Why are trading Systems Used?
Trading Systems are used to remove as many human emotions or errors from trading as possible. A trading system does this be basically by telling the trader or creator of the trading system when to get into the market and when to get out of the market. This decreases the amount of emotion in the market because it decreases the amount of thinking the trader has to do.
Why is it always important to always follow your Trading System?
Following a trading system at all times is extremely important. If you do not follow your trading system at all times then you most likely will decide to follow it in the drawdown periods and not follow it in the profitable periods.
What should be put into a Trading System?
Trading systems are made up of all different kinds of rules from technical to solar readings. Each trading system is developed differently and is developed for different things. The most important thing to remember is to develop the trading system to fit you because by doing this you are in creasing your odds of winning. For example if you had a system that was extremely profitable but you could not us it because you didn’t feel comfortable with it then it would be useless to you.
In the next part of this study of Developing a Mechanical Trading System we will look the different types of markets and how to develop a trading system for each market.
Trading Systems Online www.tradingsystemsonline.com
About the Author
Trading Systems Online helping with system development
Tell others about
this page:
Comments? Questions? Email Here