Let’s start with a simple ENTRY RULE??? OR, would it be better to build a system considering the Risk Amount first? Let’s look at a Trend Filter followed by a pull back entry…In just over 20 minutes we’ll look at Trading System Rules for Entry, Protective Stop Placement and Take Profits.  The trading system is simple and uses the 8 / 21 / 55 EMAs [exponential moving average].  We then add the Double Stochastic Oscillator 3 times to produce the pull back trading signal.  When you are working to create a trading system that best suits your personal trading style consider answering the following questions BEFORE you start.

  1.  What TIME OF DAY can I trade?

    1. IF you can be in front of the screen for 2 – 3 hours during the London or New York day session THEN you can seriously consider being a Day Trader,
      IF NOT, THEN please don’t invest any time in a day trading system as it’s not going to fit your lifestyle.

      How Much capital do you have to fund your account?

      ONE of the main reasons traders fail according to retail brokers, is that they tend to be UNDER capitalized.  BE HONEST about your account size and be sure you match your trading style and risk per trade with your account size so you can stay in business.  Isn’t it better to remain conservative in the beginning so you can be around for the long-term?

  2. How much time can I commit to my Technical Analysis each day?

    1. IF your answer is 10-30 minutes per day THEN Swing trading on 60M / 120M / 240M or DAILY charts is likely going to be your BEST COURSE of action.  You can easily scan 10-20 markets in Forex, Stocks, Futures or a combination of them all and identify any qualified Trading Signals your system has produced.  Whether you’re a Trend Trader, Breakout Trader or Counter-Trend trader looking to profit from Turning Points in the market, you need to be able to have a specific Trading Rules that allow you to SCAN a chart for the specific market and technical conditions that lead to your signal.