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Chapter 31, Part II. Mechanical System Creation Framework.

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, Apr 5, 2012.

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  1. Administrator

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    Part II. Mechanical System Creation Framework. [​IMG]

    Commander in Pips: Now let’s start to move through the process of making a mechanical system. Here our task not to give you all details of system creation. You still will have to pass through some additional literature, since there are a lot of nuances and potential pitfalls along the way. Our task here is to give you just a large structure of the process with some common explanations. As you understand we can’t include detailed information in our School – this is just impossible since there are so many different ways to approach this.

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    Pipruit: Sure, sir. At least I will get the steps, and if I will dive in this process deeper, I will know what to search for.
    Commander in Pips: Right. So, the first step is:

    1. Develop the common idea of your trading system. That will narrow the search for the necessary tools. For instance, if you intend to create a “follow the trend” system, you may need MA, MACD, ADX or SAR or some other trend indicators. If you would like to create some breakout systems – probably you will need Bollinger Bands or Detrended oscillator (for volatility breakout). If you would like to trade some patterns – you need an application that will recognize them and so on. This will help you just to stay focused;

    2. Determine on what time frame you intend to trade (apply your trading system). Our previous chapters will help you to do that – what kind of trader you are, what is your risk threshold and so on;



    3. Create the tools’ list that could help you to estimate what you want to do. For instance, you would like to create a “following the trend” system. So, here you have to specify which indicators and tools could help you. One obvious decision is those that we’ve already mentioned today – MA, MACD and other trend indicators. The most simple are different MA, of course and their combinations. If you forget how they could be used for trend identification – read the corresponding chapter in our School;

     
    #1 Administrator, Apr 5, 2012
    Lasted edited by : Oct 9, 2016
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