Creating Basics Forex Trading Systems That Works - Trading System Example Templates
When creating your own Basics Forex Trading Systems, there are a few things to keep in mind. Your strategy needs to be able to identify 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 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 trading account, you have to figure out what Basics Forex Trading 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 demo 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 come up with a "good Basics Forex Trading Systems" or "best Basics Forex Trading Systems "?
To come up with a good trading strategy the first thing to do is to define your main objective or goal:
The following example illustrates a goal and explains the rules of how to achieve that goal for your Basics Forex Trading System.
Goals
1. Identify a new trend
Moving average crossover method is the most oftenly strategy used to identify a new trend. Time to open a long or short trade is determined when two 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 indicators to confirm a Forex trend.
Indicator-based Basics Forex Trading Systems
The best type of a trading method is one that is indicator-based. You will find it straight forward to generate the signals & thus less error-prone on your part and this will help you to avoid market whipsaws.
There are several things we want to achieve when creating Basics Forex 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
Accomplishing these four goals will result in a profitable Basics Forex Trading System and a strategy that works.
The last piece of information needed, is deciding how aggressive you are going to be when entering & exiting a trade. Those who more aggressive wouldn't wait until the chart candle stick closes and 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 best Forex systems or for trading systems which work, this site provides you with all the tools required to help you & guide you on how to come up with your own Forex systems.
Shown Below is example of a Basics Forex Trading Systems based on RSI, MACD and Stochastic.
Forex System - Basics Forex Trading Systems
The Basics Forex 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 beginners who want to create Basics Forex Systems , it's difficult for them to device their own Forex strategies since they don't have a lot of knowledge about the FX trading market. However, this site will explain how one-can create their own free Forex system in just seven easy steps. The best strategy is one you come up with yourself & learn how to trade the forex market with it.
Main advantage of creating your own free Basics Forex 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 trading courses 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 trading account.
4 Examples of Free Basics Forex Trading Systems
Examples 1: The Moving Average Crossover Technique - Basics Forex 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 Forex Trading Systems
This above method is referred to as the moving average cross over technique because trading signals are generated when two averages cross above or below each other.
Forex System Trading Example - Short and Long signal Generated - Basics Forex 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 Forex System - Basics Forex 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 Forex Trading Systems
Short Signal or Sell Signal - Basics Forex 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 heading downward below centerline
Short signal was generated when all the written trading rules were met. Exit trading signal is generated when a trading signal in opposite direction is generated.
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 Trading Technical 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 day trading system when hourly charts are used.
Example 3: Trading System Forex Example - Basics Forex Trading Systems
This system is fully described within the trading plan on the trading plan tutorial on this website under the key concepts section located on the right navigation menu.
Chart Timeframe
1 hour chart
Trading Technical Indicators which spot a new trend
Moving Average Crossover
Indicators that 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 FX Trading
Stop loss- 35 pips
Take Profit- 70 pips
Reward to Risk 2:1
Example 4: New Gann Swing Chartist Plan - Basics Forex Trading Systems
The Gann Swing Oscillator is meant to be used in combination with the Gann HiLo Activator & 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 illustrated by the Gann Trend.
Shown Below is examples of New Gann Swing Chartist Plan
The Gann Chartist Plan - Basics Forex Trading Systems
