Developing a system

Developing a system
Developing a system is one of the most important components is a professional trader puts in action during their trading career. It can be broken down into 5 steps.

· Step 1: Establish your Timeline
Establish a time frame that fits your lifestyle (if you can only devote an hour a day, not trade with a 15 minute chart).
· Step 2: Establish System Rules
Rules should include your entry and exit rules (and stops and targets).
These rules should also include your Money Management rules, including your risk / reward ratio, and% of capital will be put into each trade
· Step 3: Back test your system
Go back 300 to 500 times your chart and back test your system using the best and worst scenarios, as well as determining the success of a system based on net profit versus loss.
· Step 4: Book your trading system
Are comfortable trading your system using the demo account before you put your money in a real game, but beware of your demo account, as it was real money
· Step 5: Take action!
You are now taking steps that 95% of retailers do not take. Be comfortable in this and start taking action with real money! You will never make real money from paper trading!