Preliminary Steps for Building a Successful Trading System

First Steps for the Successful Development of a Trading System

This article presents some essential preliminary steps toward developing a successful trading system and the key biases you need to avoid. The following information is mainly based on Van Tharp's book "Trade Your Way to Financial Freedom".

 

Step 1: Finding a Concept That Works

Finding a concept that works should be seen as the first step in building any trading system. Among other things, an efficient concept should include detailed setups for entry/exit and money management rules. That means entry conditions, exit strategies, and position sizing. Most traders focus on high-probability entries without any concept of adequate position sizing or exit. This practice usually leads to a negative expectancy.

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The Expert Advisors Trading Guide

Trading with Expert-Advisors (EAs)

Deployed on a trading platform, Expert Advisors (EAs) are tiny programs that can automatically trade any financial instrument. Trading with EAs is becoming very popular, as EAs can continuously trade any financial market without any human intervention.

  Introduction to EA Trading

An EA identifies and opens trades according to the parameters set by the user. Later, if the market conditions are changed, the algorithm is capable of modifying/closing the trade automatically.

EA trading in a multi-featured process offering:

• Trading the full asset index available in the platform (Forex, equities, crypto, etc.)
• Combining technical analysis tools and techniques (indicators, pattern recognition, S/R, etc.)
• Including money-management tools (risk control, spread/slippage control, etc.)
• Applying time management (selecting time to open/close orders, avoiding news releases, etc.)

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RoboForex Cashback (Rebates)

Receive a Monthly Cashback when trading 10 or more lots with RoboForex

RoboForex is an ECN/STP broker offering fast execution, tight spreads, and a free VPS for automated trading. A trading account can be opened with as little as $10 and can be funded via cards, bank wire, Skrill, Neteller, and PerfectMoney. Regulated by FSC Belize, RoboForex provides compensation of up to 20,000 euros in case of insolvency.

• 35+ Forex pairs on MT4/MT5
• CFDs and Futures trading
• EAs, social trading, fully accepting scalping and a free VPS

Spreads & Commissions

The trading spreads offered by the broker are very tight while the trading commissions of $2.0/full traded lot are very competitive:

• EURUSD spread as low as 0.10 pip, and GBPUSD/USDJPY spread as low as 0.15 pip
• $2.0 trading commissions per full traded lot

Cash Rebate Program

The broker provides a ‘Cash Rebate’ program offering the opportunity to all traders to receive extra profits on all account types. The rebate program is based on monthly trading volumes and the earned funds can be used for any purpose without any restrictions.

» Open a Trading Account with RoboForex

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