During testing on a historical chart pay attention to price action – whether it trending or ranging and take a look how your system works in these two different environments. The results chart of your system performance should not repeat the price chart and should not have any significant drawdown. Your assets should increase gradually without significant falls and jumps both in a period of ranging markets as well as in a period of trending – both down and up trends. These are the initial signs of a good system. Second, during the testing period, the system should generate at least 30-40 trades. If it will generate 100 or more – all the better. Fast and simple example of a trading system Commander in Pips: Here we will try to create some trading system. Since we do not have time for its programming and testing on computer – we will do it manually. Also, just to not make it too complicated, we will apply relatively simple rules. This is just an example, and I do not know if this system will be profitable in the long run. Also we will not make any back testing, adjustments or fine tuning of this system. Our task here is just to show how to make a detailed specification or algorithm of a system. Let’s go with our plan that we’ve just discussed: 1. Develop the common idea of your trading system. We will not search something “really special” – our system will be built on MA crossing. 2. Determine at what time frame you intend to trade (apply your trading system). Our trading period will be based on the daily chart.