Creating a Stock System That Works
When creating your own stock trading system, there are a few things to keep in mind. Your stocks strategy needs to be able to spot new Stocks Trading 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 stock trading system that works for you, stick to it. Being disciplined will help you a lot in becoming successful in stocks.
Before trading Stocks on a live stock trading account, you have to figure out what stocks strategy works for you. It is good to know in what stocks chart timeframe you are going to be working in, and how much you are willing to risk once you begin stocks online. All these factors should be factored in, and should be written down within your stock trading plan. A good place to test this stocks plan would be on a free demo practice account. This is where you test your stocks strategies risk free without investing money to determine which stocks strategy is best suited for you.
So, now how can a Stocks trader like you come up with a "good stocks system" or the "best stock trading system"?
To come up with a good stocks strategy the first thing to do is to define your objective or goal:
The following example illustrates a goal and explains the stocks rules of how to achieve that goal
Stocks Trading Goals
1.Identify a new stocks trend
Moving average crossover method stocks strategy is the most commonly used strategy to identify a new stock trend. The time to open a long or short trade is determined when two moving averages indicators cross over or cross under each other.
2.Confirm the new stocks trend
Relative Strength Index(RSI) Stock Indicator and Stochastic Oscillator Stocks Indicator are the most commonly used stocks indicators to confirm a Stocks trend.
Indicator based Stocks System
The best type of a stocks method is one that is indicator-based. You will find it straightforward to generate the stocks signals and thus less error-prone on your part and this will help you to avoid stocks market whipsaws.
There are several things we want to achieve when creating a Stock system:
- Find entry points as early as possible.
- Find exit points securing maximum gains.
- Avoid fake entry and exit signals.
- Proper Stocks Money Management Rules
Accomplishing these four goals will result in a profitable stock trading strategy that works.
The last piece of information needed, is deciding how aggressive you are going to be when entering and exiting a trade. Those stocks traders who are more aggressive wouldn't wait until the stock chart candlestick closes and would enter as soon as their stocks indicators match up. But most stocks traders would wait until the stocks trading chart candlestick of the chart timeframe they are using has closed, to have more stability when entering a the stocks market.
To get profits out of the stocks market you need to build your own profitable stocks system; a trading method that will generate profitable stocks signals. You need to have your own stocks strategy that will help you achieve your financial goals. Sometimes the best stock trading systems are the ones that you build on your own. No need to keep searching online for the best stock trading systems or for stock trading systems that work, this website provides you with all the stocks tools required to help you and guide you on how to come up with your own stock trading systems.
Below is an example of a Stocks trade system based on RSI, MACD and Stochastic.
Stocks System - Best MetaTrader 4 Templates Stocks Systems
The stocks system example above is comprised of four stocks technical indicators in total, all of these generate Stocks trade signals using different methods, the moving average will generate stocks signals using the moving average crossover method shown, the RSI indicator, Stochastic indicator and MACD indicator use different technical analysis to generate the long and short signals as shown in the above example. How to generate these Stocks Trading signals is discussed in the next topic (on the sidebar navigation learn trading lessons menu under key concepts).
For beginner stock traders, it is difficult for them to create their own stock trading strategies since they do not have much knowledge about the stock trading market. However, this learn stocks website will explain how a beginner trader can create their own free stock trading system in just seven easy steps. The best strategy is the one you come up with yourself and learn how to trade the stocks market with it.
The main advantage of creating your own free stock trading systems is that you will know how to make profits by yourself - and not rely on other peoples efforts.
In the next stocks lesson located at the sidebar navigation learn trading lessons menu below the stocks key concepts will show you how to create a stocks system like the one above, write it's stocks rules and how to back test the stocks system on a practice demo stocks trading account before using it on a live stock trading account.
4 Examples of Free Stock Systems
Example 1: The Moving Average Crossover Method
The moving average indicator cross over method uses two moving averages to generate Stocks Trading signals. The first Moving average uses a shorter period and the second is a longer period.
Moving Average Crossover Method - Moving Average Crossover Stocks Strategy
This above stocks method is referred to as the moving average crossover method because stock signals are generated when the two averages cross above or below each other.
Stocks System Trading Example - Short and Long signal Generated by Stocks System
A buy signal or going long trade is generated when the shorter moving average indicator crosses above the longer moving average indicator (Both Moving Averages Going Up).
A sell signal or a going short trade is generated when the shorter average indicator crosses below the longer moving average indicator (Both Moving Averages Going Down).
Example 2: Stochastics Stocks System
Stochastic Oscillator stocks indicator can be combined with other Stocks indicators to form a stocks trading system.
- RSI stocks trading technical indicator
- MACD stocks trading technical indicator
- Moving Averages stocks trading technical indicators
Trading Systems Stocks Trading Example - Best MetaTrader 4 Templates Stocks Systems
Short Signal or Sell Stocks Signal
How the short sell Stocks signal was generated
From our stocks rules the short signal is generated when:
- Both Moving Averages are heading down
- RSI is below 50
- Stochastic heading downwards
- MACD heading downwards below center-line
The short signal was generated when all the written stocks rules were met. The exit signal is generated when a stocks signal in the opposite direction is generated.
The good thing about using such a stocks method is that we are using different types of stocks technical indicators to confirm the stocks signals and avoid as many stocks whipsaws as possible in the process.
- Stochastic - stocks momentum oscillator indicator
- RSI - stocks momentum oscillator indicator
- Moving Averages Stock Trading Technical Indicator - stocks trend following indicator
- MACD - stocks trend following oscillator
Based on the stocks chart timeframe used - this strategy can be used as Stocks Trading scalping system when the minute charts are used or as a Stocks Trading day stocks system when hourly charts are used.
Example 3: Trading System Stocks Trading Example
This stocks system is fully explained within the stock trading plan on the stock trading plan tutorial on this learn stocks website under the Stocks Trading key concepts section located on the right navigation menu.
Stock Chart Timeframe
1 hour stocks trading chart
Indicators that identify a new stocks trend
Moving Average Crossover Indicators Strategy
Indicators that confirm the stocks trend
RSI indicator
STOCHASTIC OSCILLATOR indicator
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 Moving Average pointing down
2. RSI below 50
3. Both stochastics going down
Exit Signal
1. Moving Average Indicator gives opposite signal
2. RSI gives opposite signal
Risk Management in Stock Trading
Stop loss- 35 pips
Take Profit Stocks Order - 70 pips
Reward to Risk 2:1
Example 4: New Gann Swing Stocks Trading Chartist Plan
The Gann Swing Oscillator is meant to be used in combination with the Gann HiLo Activator and Gann Trend to form a complete Stocks Trading strategy commonly referred to as the - "New Gann Swing Chartist Plan". Within this methodology the Gann Swing Oscillator is used to help determine stocks market swings for trading only within the current market stocks trend is shown by the Gann Trend.
Below is the example of the New Gann Swing Chartist Plan
The Gann Chartist Plan - Stocks Systems - MetaTrader 4 Template Stocks System
