Trading System with Three Bars and a Stochastic for S&P 500

The trading strategy that we are going to present below was initially created to trade the S&P 500 index, but it can also be applied in other markets such as Forex, since it is based on price action and technical trading signals. In this section, we present a trading technique developed and used to trade the S&P 500 stock index, … Read more

Forex Trading System Scalping Gold

In this article, we are going to introduce a scalping trading system designed for trading spot Forex and precious metals which can be quite profitable if the trader follows the rules carefully. This system is based on custom technical indicators for Metatrader 4, so unfortunately it can only be used on this trading platform. Firstly, it uses a trend indicator … Read more

Intraday Trading System Using Moving Averages and Stochastic

15 minutes intraday trading system

This  is quite simple intraday trading system for 15 minutes candlestick charts which is based on exponential moving averages (EMA) and the stochastic oscillator. The rules of this strategy are very simple as we shall see below: This trading system is specifically designed for intraday trading. For this reason all open positions using this technique should be closed at the … Read more

How to calculate the mathematical expectation of a trading system

Calculating the mathematical expectation of a trading system is one of the first things that should be done to know if the system is capable of making money in the long term. Having a positive mathematical expectation is an indispensable condition that any moderately reliable system must meet.

The mathematical expectation measures the amount that is expected to be won or lost on average for each trade we do. For its calculation to be reliable, it is best that we take into account as many trades as possible.

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How to Measure a Trading System? – Ratios to assess your performance and risk

Example of equity drawdown

When you design a trading system, or you are looking to buy an automatic robot on the market, you must make decisions according to your preferences. The first thing you should ask yourself is: what am I looking for?

It is clear that you are looking to earn a lot of money, yes… this is what we all seek. But after a few losses and disappointments you learn that in Forex and other markets there are no magic methods and that the perfect trading system does not exist.

So, the right question is: how can you evaluate and compare different trading systems according to their risk level and potential benefit to know if they are viable for your use?

In this article we are going to review different statistical metrics to assess the performance of an investment system.

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Trading System Based on 4 EMA Crossover

Buy Signal of 4 EMA system

The trading strategy that we present below is a system based on the crossover of 4 exponential moving averages (EMA) of 5, 10, 20 and 50 periods. In this sense, it is no different from other similar strategies, but includes indicators such as the RSI and stochastic oscillator to measure market momentum, which allows the trader to confirm the reliability of the crosses. We should recall that in trading systems based on moving averages crossies false signals may occur and therefore it is important to employ means for filtering signals.This system also includes a custom indicator for Metatrader 4 (EMA/EMA Cross Indicator) which serves to signal EMA crossings.

The system and its rules are quite simple as discussed below. As always we recommend trying the strategy on a demo account before risking real money.

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Fibonacci Retracement Trading System For Forex

Fibonacci sell trade example

In this article we are going to explain a trading system based on Fibonacci retracements and the weighted moving average (WMA), which can be used in any market and in most time frames. Therefore, it requires a basic knowledge of Fibonacci tools, although nothing complex.

Fibonacci tools can be found in the vast majority of trading platforms, such as Metatrader 4, so this system can be used on any platform that the trader chooses.

If you do not have knowledge about Fibonacci indicators, you can consult the following article: Fibonacci in Forex Trading

Basically, it is a technical trading system that focuses on opening positions in the trend direction, using Fibonacci retracements as price zones to enter the market. In other words, it is a trend following system. The WMA moving average is used to determine the best time to open positions.

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How can I learn to maximize profits and minimize my losses in trading?

There are certain facts that have remained strong in recent years in connection with trading. Experienced and successful traders point out that, despite being able to develop trading strategies with high probability of success that allow them to enter the market at the right time through their systems signals they almost never close a position  in the optimal moment.

Close the trades at the right time is one of the most challenging aspects of trading in general and for many beginning traders it is difficult to understand that the market exits are difficult to visualize and we just have to execute them as part of our trading plan. In this case, the trades must be closed according to our trading plan with no doubt and fear even if it appears that there are some pips or points that were closed for closing a position “too soon”. We may be able to achieve excellence, but perfection (as far as trading is concerned) is an impossible ambition.

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