When you want to build a forex trading system, the first part is always the hardest part. (At least, I think it is.) This is the part where you have to think without any bounds or guides--it's totally freeform.
The first step is to brainstorm ideas. What exactly are you trying to do? How do you want to do it? You really need to stretch you mind, because if you don't, you'll find that you've just reinvented an already existing system.
After all, moving average crosses have already been done. ;-)
To start your brainstorming, think about what the overall goal of the system is. Are you shooting for a trend following system? A breakout system? Counter trend system?
After you have your mind around that, think about what time frame you want it to operate in. Do you want it to have trades that last months, weeks, days, or hours?
Next open up some trading program and look at all the indicators. Start to think about which ones could do various necessary things in your trading system.
Side note: If you're not familiar with what various indicators (fundamentally) do, you need to educate yourself first. Search the web; all the information you need is there.
There is another way to approach the task of brainstorming for a new trading system. If you already have a unique indicator, or you just learned of one, you may want to build a system around that.
That's all good too. Make sure you know that indicator inside and out. Then start brainstorming what exactly you want to do with it, etc.
Next you need to use some structure for developing you new system into a profit machine. That will be in part 2. See you there . . .
Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".
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Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide
Source: www.articledashboard.com
