I am trying to figure out how to design a trading system, and I pretty much got the hang of the indicators but in order to create a good strong system you need to be using more than one indicator. How do I incorporate more a system of indicators to work with each other, also I am a bit confused as to the working programming mechanism for indicators. To my knowledge, and correct me if I’m wrong, but when using an indicator you should be able to retrieve a numerical value so you can know your buy and sell points. therefore if I choose to create a system with more than one indicator would it automatically scalp the market according to my indicators (if the market is open in my platform)? and what if I choose to employ more than one indicator to verify that the market is going a certain direction before i issue out my sell or buy orders. and lets just say i want to add an oscillator to verify momentum before i trade as well, how do i successfully make calls to each of the indicators?
will my system automatically scalp all my markets?(lets just say i had usd/jpy, chf/jpy, eur/usd will alll 3 markets be on the scalp due to my trading system? if not how do i make it that way)
and also do you configure IN THE trading SYSTEM the buy and sell? (in other words would your system automatically buy or sell—according to your set of rules) what is the code to initiate buy or sell orders
and is it possible to have a code whereby if the market is going a certain you buy lets just say 10 lots and if it continues and is not overbought (buy 10 more lots) all the way untill it shows that its overbaught then sell all lots
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Many people spend ages trying to find a perfect forex trading system while that is not the most important part of trading.
I hope i will be able to tell you few things that will help you out, but take it from my experience, i have not found a system and never traded one that would consistently bring profits. Market is very wild and changes periodicly, every system will send some - less or more false signals… as you probably heard lots of time money managememt is the key to success.
I tell you somethnig interesting about systems - in theory if you had a system which played by the strict rules would bring consistent loses, that all you have to do is do everyting in reverse. if you maintain 1:2 risk reward and get a signal to sell or buy, than try risk reward 2:1 and sell when the system is telling you to buy and vice versa - in teory that should make you many consistently. and it will for some time…
Nvm that is just a wierd conclusion.
When designing your systtem you want to either be a trend trader or the reversal trader…
Moste of trends have 5 waves, some have 7 some 9 or even more.
If you are reversal trader - you will be looking to enter at the top of wave 7 or 9, 9 having of course more chance of success.
if you are a trend trader, you will want to trade first and second retracement and most trends has 5 waves trading 3rd retrace is has less chance of success.
You can use 50SMA for trend measurement - when its angling up we are in up trend - angling down - downtrend. why 50sma?
a lot of people use it so its reliable.
You need to avoid using 2 indicators that show the same thing - like oscilators - never use stochastic with rsi because they will show you the same thing.
I recommend stochastics for cycle indicator. and MACD for momentum.
so for instance when the 50sma is trending up wait for retrace to that line, wait for stochastic to go down and cross up through the 20 line - that will say the cycle is over and new one starts to the upside. and make sure you get a shift in momentum from down to up or if the momentum stays up its great too… waiting for divergence on stochastic will increase the probability but reduce the number of trades.