What makes an effective and profitable trading system
A reliable and solid trading system however must have very clear rules. At minimum, a complete trading system should include rules such as condition when and where to enter trade, where to put stop loss, and where to take profit. Trading should be a very simple process.
How do you build a successful trading system?
There are seven easy steps to follow when creating a successful trading plan:
- Outline your motivation.
- Decide how much time you can commit to trading.
- Define your goals.
- Choose a risk-reward ratio.
- Decide how much capital you have for trading.
- Assess your market knowledge.
- Start a trading diary.
How do you evaluate a trading system?
Follow these 6 steps to evaluate your trading strategy:
- Step 1: Determine the Need for Change. …
- Step 2: Determine the Minimum Extent of Alteration Necessary. …
- Step 3: Make the Needed Adjustments and Test in a Live Market. …
- Step 5: Periodic Evaluations.