Trade Forex Trading

Trading Trading Strategy Rules: Write The Rules of Your System & Follow Them

We shall use the previous steps to create a written and noted down system that generates the trade signals shown below using the 1H chart. We shall use the H1 chart to write down the rules of this trading strategy.

A system refers to set of written trading rules that you follow to manage your trades when trading in the market. The trading rules must be written down so that to guide you. The following tutorial will explain to you how to write down the rules of your system.

The essential concept is a SET OF RULES that you, as a Forex trader, must adhere to. Failing to comply with these trading rules means you lack a trading system. A system must consist of rules that are documented within your plan.

Explanation of System below:

Writing Rules of a Strategy - 1 Hour Chart Time Frame Strategy Template Example

Writing Rules of a System - 1H Chart Time Frame System Sample Template

You can create the above system using the steps below:

Step 1:

Select your Chart Time-frame - H1 chart

Step 2:

Choose Indicators which spot a new trend - MA Crossover System.

Step 3:

Opt for Technical Indicators that validate the existing trend - such as RSI, Stochastic.

Step 4:

Finding entry and exit points

Long Entry

  1. Both Moving Average pointing up
  2. RSI above 50
  3. Stochastic oscillator technical indicator going up

Short Entry

  1. Both MA(Moving Average) pointing down
  2. RSI below 50
  3. Stochastic oscillator technical indicator going down

Exit

  1. Moving Average generates in the opposite trend signal
  2. RSI generates in the opposite trend signal

Step 5:

Calculating the risks in each trade - 20 pips

Step 6:

Write down the trade system rules

Step 7:

Strategy Assessment Using a Simulated Trading Account (Demo)

After using the guide-lines we come up with the written system rules below.

Writing System Rules

Write Rules System - Writing Strategy Rules

Example of How to Write System Rules - Writing Systems Rules

This trading strategy produces the signals just as is illustrated and shown below. Using these rules, traders can determine when to enter and exit trade positions.

How Do You Generate Buy & Sell Trading Signals using Written System Rules?

How to Generate Buy & Sell Trading Signals using Written System Guidelines

We have finished writing the trading rules, if you're researching on how to develop the best system, this course is a good start and begin to tutorial you on how to do just that. This is one part of the trading plan. Now how do you as a trader create a complete plan? - To read about how to create a trading plan go to the right navigation menu of this website under the key concepts where you as a forex trader can find a link for this trade plan tutorial topic.

Study More Courses and Courses:

Forex Broker