1. Trading Systems: Introduction
  2. Trading Systems: What Is A Trading System?
  3. Trading Systems: Designing Your System - Part 1
  4. Trading Systems: Designing Your System - Part 2
  5. Trading Systems: Constructing A System
  6. Trading Systems: Troubleshooting And Optimization
  7. Trading Systems: Conclusion



Let's recap what we've learned from this tutorial:

  • A trading system is a group of specific rules, or parameters, that determines an entry or exit point for a given equity.
  • Combinations of technical analysis indicators and oscillators are often used to create the rules used in trading systems.
  • Once they are created and working properly, trading systems can take all emotion out of trading and save you a lot of time; however, they can be difficult and time consuming to construct and perfect.
  • Many trading systems have proven to be effective over time. But some of the trading systems sold on the market have been scams. Most scams can be detected by looking at the promises they make - if it sounds too good to be true, it probably is!
  • Trading in the currency market can offer more liquidity and lower transaction costs, but also more volatility and a limited selection. Equity markets have limited liquidity and high transaction costs, but a more diversified nature. The futures market - although typically reserved for advanced traders - offers high leverage and potential profits, but is more difficult to tame with a trading system.
  • There are two main types of trading systems: those that follow the trend and those that go against the trend. Although similar in terms of risk, they offer different ways of profiting.
  • Your trading system must make money, limit risk, be composed of stable parameters and have a stable time series.
  • Software can help you speed up system development and automate trading.
  • The six steps involved in creating an effective trading system include (1) set up, (2) design, (3) decision making, (4) practice, (5) repeat and (6) trade.
  • Optimization should be avoided in most circumstances.
  • The four steps in the process used to troubleshoot any problems with your trading system include (1) identifying the problem, (2) evaluating the problem, (3) considering the alternatives, and (4) implementing a solution.

http://www.metaquotes.net - Free technical analysis software.

http://www.tradestation.com - Most popular paid automated trading platform.

http://www.esignal.com - Paid data source.

Related Articles
  1. Trading

    The Pros And Cons Of Automated Trading Systems

    Automated trading systems minimize emotions, allow for faster order entry, lead to greater consistency and resolve pilot-error problems.
  2. Trading

    Trading Systems: Run With The Herd Or Be A Lone Wolf?

    Find out if taking the path less traveled will work in your favor - or against it.
  3. Personal Finance

    A Day In The Life Of A System Trader

    Systems traders divide their time between trading, developing, backtesting, optimizing and forward testing, to create viable and high-probability trading systems.
  4. Trading

    Basics Of Trading Systems

    A trading system can save time and take the emotion out of trading, but adopting one takes skill and resources - learn more here.
Frequently Asked Questions
  1. What is the difference between secured and unsecured debts?

    The differences between secured and unsecured debt, and how banks buffer risks associated with each type of loan through ...
  2. How Many Times has Warren Buffett Been Married?

    Warren Buffett has been married twice in his life, but the circumstances surrounding the marriages were unconventional.
  3. What's the smallest number of shares of stock that I can buy?

    Many people would say the smallest number of shares an investor can purchase is one, but the real answer is not as straightforward. ...
  4. What is an economic moat?

    An economic moat refers to a company's ability to maintain competitive advantages to protect its long-term profits and market ...
Trading Center