Complex Trading Systems - Part I

Trading Systems created by advanced traders

As a rule, “beginner” traders search for literature devoted to trading financial markets. They study market basics and as they begin to understand how they function, they study the technical and fundamental analysis.

While continuing with their studies, they open a virtual trading account and start to practice their theoretical knowledge.

Of course, it takes time.

Once they start to earn “income” using virtual money, they open the real trading account, fund it with real money and start trading with the intention of receiving a real money profit. A trader looks at various indicators, trying to define which are best suited to their style of trading. In parallel, a trader can use the free and paid services giving trading recommendations.

In due course, step by step, a trader begins to form their own approach to trading based on certain rules for using those particular indicators or other trading tools (a set of carefully chosen indicators, with certain parameters, for example).

Eventually, the trader forms their own unique approach to trading; their trading strategy or trading system.

Put simply, a system consists of identifying a set of events or situations which arise in the market and confirming these as good (or bad) by comparing them with a known set of parameters and technical indicators. When all or most of these events occur at any one time, it is a signal to buy (or sell).

It is important for the systems developed by a trader to be computerized at the earliest opportunity. This will allow their automatic execution without the trader having to be directly involved.

Many trading platforms such as МТ4 allow the user to program algorithms (a procedure or formula for solving a problem, created in the form of a script that is run on your computer) and build them into a trading system. This makes it possible for trade positions to be opened and closed automatically when certain conditions occur.