Creating Basics Trading Systems That Works - Trading System Example Templates
When creating your own Basics Trading Systems, there are a few things to keep in mind. Your strategy needs to be able to spot new forex market trends, while at the same time making sure you do not to get faked out/whipsaws. The real trick is, once you have created a Forex trading system that works for you, stick to it. Being disciplined will help you a lot in becoming successful.
Before trading Forex on a live forex account, you have to figure out what Basics Systems & strategies work for you. It is good to know in what time frame you are going to be working in, and how much you are willing to risk once you begin. All these factors should be factored in, and should be written down within your trading plan. A good place to test this would be on a free practice trading account. This is where you test your strategies risk free without investing money to determine which strategy is best suited for you.
So, now how can a trader like you create a "good Basics Systems" or "best Basics Trading Systems "?
To come up with a good trading strategy the first thing to do is to define your aim or goal:
The following example illustrates a goal & explains the rules of how to achieve that goal for your Basics Trading System.
Goals
1. Identify a new trend
Moving average crossover method is the most oftenly strategy used to identify a new trend. The time to open a long or short trade is decided when 2 averages cross over or cross under each other.
2. Confirm the new trend
Relative Strength Index(RSI) and Stochastic Oscillator Indicator are the most oftenly used technical indicators to confirm a Forex trend.
Indicator-based Basics Trading Systems
The best type of a trading method is one that is indicator-based. You will find it straight forward to generate the trading signals & thus less error-prone on your part & this will help you to avoid market whipsaws.
There are several things we want to achieve when creating Basics Trading Systems:
- Find entry points as early as possible.
- Find exit points securing maximum gains.
- Avoid fake entry and exit signals.
- Proper Money Management Rules
Finishing these 4 goals will result in a profitable Basics Trading System & a strategy that works.
The last piece of information needed, is deciding how aggressive you are going to be when entering and exiting a trade. Those who more aggressive wouldn't wait until the chart candle closes & would enter as soon as their indicators match up. But most would wait until the chart candlestick of the timeframe they are using has closed, to have more stability when entering a the market.
To get huge profits out of the forex market you need to build your own profitable trading system; a method that will bring your not just hundreds but thousands of dollars worth of revenues. You need to have your own strategy that will help you achieve your financial goals. Sometimes the best trading systems are the ones that you build on your own. No need to keep searching online for the best trading systems or for Forex trading systems that work, this site provides you with all the tools required to help you and guide you on how to create your own Forex systems.
Below is an example of a Basics Trading Systems based on RSI, MACD & Stochastic.
Trading System - Basics Trading Systems
The Basics Trading Systems example above is comprised of four technical indicators in total, all of these generate Forex trade signals using different methods, the moving average will generate signals using the crossover method shown, the RSI, Stochastic and MACD use different analysis to generate the long and short signals as shown in the above example. How to generate these Forex signals is discussed in the next topic (on the sidebar navigation learn forex lessons menu under key concepts).
For beginner traders who want to come up with Basics Trading Systems , it's difficult for them to device their own Forex strategies since they don't have a lot of knowledge about the FX market. However, this site will explain how one-can create their own free Forex system in just seven easy steps. The best strategy is the one you come up with yourself & learn how to trade the forex market with it.
Main advantage of creating your own free Basics Trading Systems is that you will know how to make profits by yourself-and not rely on other peoples efforts.
In the next course located at the sidebar navigation learn lessons menu below the key concepts will show you how to create a trading system like the one above, write it's rules and how to back test it on a practice demo account before using it on a live forex account.
4 Examples of Free Basics Trading Systems
Example 1: The Moving Average Crossover Technique - Basics Trading Systems
The cross over method uses two moving averages to generate Forex signals. The first MA uses a shorter period and the second is a longer period.
Crossover Technique - Basics Trading Systems
This above technique is referred to as the moving average cross over technique because signals are generated when 2 averages cross above or below each other.
Forex System Trading Example - Short and Long forex signal Generated - Basics Trading Systems
A buy signal or going long trade is generated when the shorter average crosses above the longer average (Both Moving Averages Going Up).
A sell signal or a going short trade is generated when the shorter average crosses below the longer average (Both Moving Averages Going Down).
Example 2: Stochastics System - Basics Trading Systems
Stochastic Oscillator can be combined with other indicators to form a system.
- RSI
- MACD
- Moving Averages Forex Trading Technical Indicator
Trading Systems Example - Basics Trading Systems
Short Signal or Sell Signal - Basics Trading Systems
How the short signal was generated
From our rules the short signal is generated when:
- Both Moving Averages are heading down
- RSI is below 50
- Stochastic moving downward
- MACD moving downwards below center-line
The short trading signal was generated when all the written trading rules were met. The exit signal is generated when a signal in opposite direction is generated.
The good thing about using such a method is that we are using different types of indicators to confirm the signals & avoid as many whipsaws as possible in the process.
- Stochastic - momentum oscillator
- RSI - momentum oscillator
- Moving Averages FX TradingTechnical Indicator - trend following indicator
- MACD - trend following oscillator
Based on the chart time frame used this strategy can be used as Forex scalping system when the minute charts are used or as a Forex day trading system when hourly charts are used.
Example 3: Trading System Forex Example - Basics Trading Systems
This system is fully described within the trading plan on the trading plan lesson on this site under the key concepts section located on the right navigation menu.
Chart Time Frame
1 hour trading chart
Technical Indicators which identify a new trend
Moving Average Crossover
Technical Indicators which confirm the trend
RSI
STOCHASTIC OSCILLATOR
Long Entry - Buy Signal
1. Both MA(moving averages) pointing up
2. RSI above 50
3. Both stochastics going up
Short Entry - Sell Signal
1. Both MA pointing down
2. RSI below 50
3. Both stochastics going down
Exit Signal
1. MA gives opposite signal
2. RSI gives opposite signal
Risk Management in Forex Trading
Stop loss- 35 pips
Take Profit- 70 pips
Reward to Risk 2:1
Example 4: New Gann Swing Chartist Plan - Basics Trading Systems
The Gann Swing Oscillator is meant to be used in combination with the Gann HiLo Activator and Gann Trend to form a complete strategy commonly referred to as the - "New Gann Swing Chartist Plan". Within this methodology the Gann Swing Oscillator is used to help determine market swings for trading only within the current market trend is shown by the Gann Trend.
Below is the examples of New Gann Swing Chartist Plan
The Gann Chartist Plan - Basics Trading Systems
