Construction of trading systems: what should each trading strategy consist of
Category : Strategy
A systematic approach determines the future success in all undertakings. Whether it’s business conducting, learning process, organization of some activities, as well as fixapi trading. Therefore, each manager tries to create his own vision of the market with the help of certain rules and principles, both of financial asset analysis, as well as trading operations methods. After all, not a person is forming aprofitableness. It is formed directly by the trading system, which in turn was created by a person. And all the success will depend only on how competently and accurately the trader follow his own rules.
If you are just on the way of developing your vision of the market and the strategy itself, today I will help you to come a few steps closer to your goal, becausefurther we will analyze the key underlying principles of a trading strategy creation and from whichunits it should consist of.
So, first you need to highlight the principles of a trading strategy, which you will continue to proceed in the future. I focus attention on the fact, that each fix api trader may have his own principles and purposes, which he pursues. So, I will select the following basic principles:
– Trading strategy should be simple and accessible for you;
– Algorithm of actions should be logical, and also eliminating manual intervention in the process;
– Trading should be based on a possible risk;
– The goal is capital preservation, and only then its multiplication;
– Profitability of a trading strategy should cover the main passive sources of income.
Exactly on these key rules the most trading strategies for the fix apiforex market are created. You can expand this list.
Now, let’s move on to the question of what every trading strategy should consist. Here I will also highlight several key blocks, which necessarily must be present and can be the basis in creating the future of algorithmic approach (http://forexzzz.com/product/ctrader-connector-via-fix-api/).
Unit #1 Definition of algorithm
If you have already established the methodology, with which you’re trading, for example, using trading indicators, then you should arrange them in a logical chain and sequence. This is done in order to be able to understand, which trading signal follows which and what should be done in various combinations.
Unit #2 Opening of trading operations
If we continue our example and imagine, that you are using technical indicators in your trading, you should be aware, under what conditions trading operations will be opened. It can be the achievement of a particular zone by an indicator or the intersection of two different technical elements, that will create a trade signal for purchase or sale (http://1sforexsignals.com/). Anyway, the system should answer the question, what combinations should open a trade and which you should skip due to the lack of supporting filters.
Unit #3 Closing trading operations
If you have an entry into the transaction, then there must be an exit. For this youshould also write down, under what conditions opened operation should be closed. It may be the reverse combination of trading signals or achieving of certain levels. Don’t forget to set the Stoploss and Takeprofit levels, because it’s also certain conditions to exit trading positions.
Unit #4 Capital management
Trading strategy should also have a unit, that is dedicated to the determination of the transaction´s amount. And not only the volume, but so that, when closing the position no additional risks will appear. This is a very important point for achieving future goals, which is very hard for every fix api trader.
If you will be able to realize your strategy, then you will have complete mechanism for stable earnings. Moreover, thanks to such sequence and a simple chain of actions, you can implement a trading robotin the future, that will simplify the trading process in the financial market.