The main focus of this article is to walk you through the process of developing its own system. Does not take much time to build a system, but it takes a long time for his extensive testing. Therefore be patient, because in the long run, a good system you can make a lot of money. The first thing you need to decide when you are creating your system is kind of trader you are. Are you a day trader or swing trader you? Do you like to look at the chart every day, every week, every month, or even every year? How long you want to keep open positions? This will help in determining the period to be used in the store. Although you will still need to keep track of multiple time periods, it will be a major period of time that you will use when searching for signals for trading. Find indicators that help identify new trends. Since one of our goals is to identify trends as soon as possible, you should use the indicators that we can provide. The average movement are one of the most popular indicators that traders use to identify a trend. Commonly used (one slow and one fast and waits until no quick passes over or under slow. This is the basis of what is known as crossover” system, crossing the average movement. In its simplest form, crossovers is the quickest way to identify new trends. Also this is the easiest way to enter the new trend. Of course, there are many other ways to trader entering the trends, but MA is one of the easiest to use.
Our second objective is that the system has the ability to avoid false signals, which means that you do not want to be caught in a “false” trend. The way we do that is that when we see a sign of a new trend, and we can confirm with the help of other indicators. There are many good indicators to confirm a trend, but it is good to start with the essentials such as MACD, Stochastics and the RSI. Once you become familiar with the various indicators, you will find one that suits you best and you will be able to include them in your system. In developing the system, it is important to define how much you are willing to lose on each trade. There are not many people who like to talk about the losses, but in practice, a good trader thinks about how it could potentially lose before you start to think about how much it can earn. The amount that you are willing to lose will be different than any other dealer. You will need to decide how much you need room to breathe, and at the same time you do not risk too much on one trade. You will learn more about managing money later. Money management plays a big role in how much you should risk per trade.
Define the in and out of the position
This is the most important step in creating your trading system. You can write on the side of the rules of your trading system and always must be adhered to. Discipline is one of the most important features that a trader must have, but you must not forget to stick to the rules of your system! No system will not work if you do not keep the rules, so remember to be disciplined. Once you have defined how much you are willing to lose per trade, the next step is to find out where to enter and exit positions, in order to achieve the highest possible profit. Some people like to get into position as soon as all the indicators coincide and give a good signal, even if the candle is not yet closed. Others want to wait until the candle closes. According to my experience, it is best to wait until the candle closes before entering. I’ve been in many situations in the middle of the candles, all indicators were matched, but until the candle closes, the store is completely reversed my position. It’s all just a matter of style of trading. Some people are more aggressive than others and you will eventually find out what type of trader you are. To exit the position you have several different options. One way is to move your stop loss, which means that if the price moves to a certain amount, and you move your stop loss for that amount.
Another way is to set a goal and exit the position when the price reaches that goal. How to calculate the target, just indulge you. Some people choose support and resistance levels as their targets. Others simply decide to trade always the same amount for each pip trading. No matter how you decide to calculate your goal, all you have to do is – follow it. Never too early to get out of position, no matter what happens. Another way that you can get out of the position is to have a set of criteria which, when covered, the output signal. For example, you can create a rule that if your indicators turn at a certain level, exit the position. After a long time of trying different periods of time, I found the 1-hour chart. This period is longer, but not too long, trade signal is less, but not too little. Now I have more time to analyze the market and I do not feel more pressure.
On the other hand, I have a friend who would never have traded in a 1-hour period. He is simply too slow. He prefers to trading on the 15-minute chart. It still gives him enough time (but not too much) to make decisions based on your trading plan. Also, another friend can’t understand how we can trade the 1-hour chart, because he thinks it is too fast! He traded on the daily, weekly and monthly charts. Now you probably already wondering who is the real time frame for you. Well, if you follow it, it depends on your ability. You have to feel comfortable with the time period in which you trade. You will always feel some pressure or a feeling of frustration when you trade, because the real money in the game. But you should not feel that way because the events are occurring too quickly, so it is difficult to make decisions, or so slowly that you get frustrated. When I started trading, I was able to keep a time frame. I started with a 15-minute graph, and a 5-minute, and 1-hour, daily and 4-hour chart. If you look at the currency pair in different periods of time, you have probably noticed that the markets are moving in different directions. Average movement (MA) may increase the weekly chart signaling purchase, but may fall on the daily chart, signaling a sale. It can fly at the 1-hour chart, telling us to open a long position, but at the same time and sink to the 15-minute chart, telling us to open short position. What is going on here? You should spend a few hundred dollars to find out that they are in a greater period of time greater and more important support and resistance levels. But it is also one of the things that brought me the most money, when I started to implement trading using multiple time periods. This will allow you to stay longer in a position, because you can identify where you are in relation to the big picture. Most beginners looking in only one period. Catch is a period of time, set indicators and ignore other time periods. The problem is that a new trend, which comes from a different period of time, can damage dealer who does not look at the big picture. Always watch from a distance. Select the desired time period and then move to the next higher ( M30) period. Here you make a strategic decision whether to go long or short position based on the direction of the trend. Then go back to the desired period of time to make a tactical decision about entering and exiting positions. Adding temporal dimensions of your analysis gives an advantage over traders who trade using only one period of time. There is a limit to how many periods you can follow. Use at least two, but no more than three periods of time because you will only confuse and draw your thoughts. I like to use three time periods. The greatest period follow the main trend, following a time period as medium trend and the minimum time frame as short-term trend.
Scaling In and Out Trades Conclusion
You can always use time frame charts what is the optimal for your trading system. It was included in and out positions and optimal timing. There is no need to chase the price and trend. It can be done. Take your time and patient.
It is recommended H1 charts for daily trade. It is the optimal charts for in and out positions. Open demo account.