Creating Forex system

Post your new strategies, discoveries or just ideas for development

Creating Forex system

Postby User » Fri Jul 03, 2009 2:10 pm

Forum transfer: Submitted by User on August 16, 2007 - 21:44.

How to start creating a system? Suppose, I have in front of me a 1 hour chart... what should be next?
I read the article here, but I'm still helpless in making my own system...
how do you do it? The system that WORKS!
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Re: Creating Forex system

Postby User » Fri Jul 03, 2009 2:10 pm

Forum transfer: Submitted by Nick on September 10, 2007 - 16:39.

To make your own system, in other words, set of rules, you need to observe the market for some good time. First, choose any currency pair that you like, say EUR/USD.

Now, read the theory about different indicators, tools that can be applied to trading. Try them out one by one, change settings, improvise, look if you can spot any pattern that would repeat itself over the time.

Later, you may find that you like one indicator more than another, combination of indicators can do the thing. It is all about testing, testing and testing. When I do the search, at times, feelings come like I'm stuck, met a brick wall, but then I would come with some idea and the process moves on.

Nick
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Re: Creating Forex system

Postby User » Fri Jul 03, 2009 2:11 pm

Forum transfer: Submitted by User on September 16, 2007 - 12:10.

Don't be mad at me, for my next words:
Newbies don't make systems that work well from the first time.

By that I mean you need to give yourself some time, do a lot of practice, know exactly what each indicator you put on the chart trying to tell you etc, etc.

Learning is not easy and surely time consuming, but that's what everyone does, before they are able to create their own real set of rules for trading. Practice even if you always fail, you will make it one day.
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Re: Creating Forex system

Postby User » Fri Jul 03, 2009 2:11 pm

Forum transfer: Submitted by reza ghafoorpoor on October 10, 2007 - 19:52.

Hi Nick I wonder how long does it took you to come up with your own system?
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Re: Creating Forex system

Postby User » Fri Jul 03, 2009 2:11 pm

Forum transfer: Submitted by Nick on October 10, 2007 - 21:27.

Hi Reza,
As soon as I learned about 3 basic indicators: RSI, Stochastic and MACD - I was doing some research on my first demo account. Withing first couple of weeks since my first introduction to Forex I thought I had a trading system. But in fact, it wasn't a system, I had only a couple of triggers and ideas as where to start and where to end my trading...

It took me another couple of month of learning, and reading different articles and searching for trading system examples before I figured out that a System means more then just knowledge of what to do during certain market situation. A trading system is a set of Written Rules that include entry rules, exit rules, confirmation advices, money management etc.

To speak about such Real Forex trading system - it took me all-in-all about 3 month to come up with a solid ground for my trading, and another couple of weeks to learn to write each and every new trading idea down. Yeah, I was a bit slow... nobody taught me what a real system looks like, I learned it by myself.

Nick.
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Re: Creating Forex system

Postby User » Fri Jul 03, 2009 2:12 pm

Forum transfer: Submitted by reza ghafoorpoor on October 11, 2007 - 12:53.

Hi Nick.
Thanks a lot for your informations. Infact I'm in your first step right now. and I'm triying to make a real system now. I think the systems introduced here may work for begining of a real account.somehow I think it's the wast of time to manage a demo account in this step. That's becouse I think a nearly easy system I'm trying now, with a money management(1% risk & folowing entry and exit rules)is enough.(Forex trading strategy #9 (Basic balanced system)).what's your idea about this system?
dear Nick, I didn't get it. what is a setting of written rules look like? if it is possible give an example.
Thanks again.
Reza
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Re: Creating Forex system

Postby User » Fri Jul 03, 2009 2:12 pm

Forum transfer: Submitted by Nick on October 15, 2007 - 13:47.

Hi Reza.

The way I see a good system with written rules:

***** System name ******
(that's optional, but it is nice to have a name for the system you trade).

Trade during: L and NY sessions only, from ... to ... GMT.
No trading on Mondays, no trading on Fridays after midday.

Currency pairs: GBP/USD, USD/JPY.

Chart setup:
Time frame: 1 hour and daily.
MACD (12, 26, 9)
Bollinger Band (14, 2)
And so on...

Trading position size: X% of my account, X amount of units etc..
Number of open positions: ...

My trading rules:

Daily routine: Check news in the morning, set weekly and daily Pivots, define other support/resistance levels, trend lines... Write down everything that should be done before trading can begin.

Entry rules:
If ... then ...
If ... then ...
(as many as you need)

Additional notes, for example: constantly watch for indicators to ... if so then...

Exit rules:
(same if.. then, every step should be written down)

Take profit: X pips, or at Pivots, supports, fibs... clearly defined.
Initial Stop loss: Yes. No. If yes - then what is it: fixed amount of pips or X% of account balance or other methods...

Never move S/L.
OR move S/L to break even once...
OR initiate a trailing stop when...

That's about it.
And finally some nice words to yourself at the end like:
Good luck and let the profits run :) !!!

Nick
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Re: Creating Forex system

Postby User » Fri Jul 03, 2009 2:14 pm

Forum transfer: Submitted by User on October 17, 2007 - 21:50.

Hi Dear Nick
A very nice and detailed information. I didn't think about some of them at all. Talking with a self-experienced nice fellow like you will give confidence to every newby like me.
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Re: Creating Forex system

Postby shengani » Wed Jul 08, 2009 5:10 am

Hi Nick,
It is people like you who unselfishly share experiences and knowledge that make forums like this successful.

I am a newbie and am struggling with information overload, but reading your concise common sense notes is very helpful, informative.

Thanks

Piet
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