Trading system development methodology

Trading system development methodology

There are plenty of forex Trading system development methodology, besides their number is increasing every day, so a description of each of them in this article does not seem possible. But it is possible to identify the main groups of forex Trading system development methodology.


When breaking down the strategies forex Trading system for the duration, we can distinguish the following four groups:

1) Trading system development methodology - The long-term.
In this case, orders kept open during the week, a few months. With this type of trading will not necessarily hasten the decision on entry and exit is taken after careful consideration. This is probably the most low-return Trading system of trade due to the fact that Reinvest profit is rare. This Trading system usually employed traders with larger deposit. Deposit in such trade should be 5-10 times greater than the margin to withstand the severe slump, which are inevitable in this type of trade. But the undoubted advantage of this trade, if you are using technical analysis, is the highest percentage of successful transactions. (This strategy is used on large timeframes, but they 'noise', false alarms, a little.) Generally, in principle, if you open an order in any direction, and put take profit point 200, within a month or several months, will almost certainly work order and fix the profit. In addition, another advantage is the fact that long-term Trading system does not take much time. Perhaps the safest Trading system for the nerves.

2) Trading system development methodology - Medium
In this type of trading is trading in a day-week. This is a more profitable Trading system. But requires more time to spend at the terminal.

3) Trading system development methodology - Short-term.
Trade is conducted prior to the day. Requires quick decisions. Apply it with success, as a rule, only professionals.

4) Trading system development methodology - Very Short.
This is perhaps the most potentially profitable Trading system, and most drain. Not fused to it, probably only the real professionals, "diehards" who have a huge store of practice behind him. In addition to successful trading in a given time interval must have nerves of steel, or even a super professional quickly merge your deposit. Any newcomer, perhaps, begins trading with this strategy, just stupid pips . It grabbed the tick, then 2, and then the market took a hard and went in the opposite direction. Often this happens after the release of important news. And usually within a few hours merges whole deposit.


According to the type of order execution Trading system development methodology can be divided into:

1) Manual.
This Trading system, which commits the transaction in person.

2) Mechanical.
This Trading system, which commits the transaction on the program - the robot is written, usually in a programming language MQL. The undoubted advantage of this Trading system is the complete exclusion of the "human factor". That is, the robot "hit the ceiling" can not, it will act as it has programmed people.
The biggest drawback of these Trading system - everything sooner or later they merge, it's only a matter of time. To avoid this, one must adjust the robot in time under the changed market. In general, robots can work wonders by increasing the deposit of tens to hundreds of times over a short period of time. But, and, of course, that trade and merge it may just as quickly.


Also, Trading system development methodology strategies can be divided into 3 groups:

1) Trading system based on fundamental analysis.
Fundamental analysis is very complicated, because is a factor analysis of dozens of different countries, and establish a correct relationship between these factors, some of which often contradict each other, to predict the future behavior of the market at times very difficult. Therefore, according to some traders, fundamentalists, 15-20 percent of the total.
In particular, the fundamental analysis to include the Trading system of "trading on the news." One of the most important news, because of which there are the most powerful movements in the market, is the Nonfarm Payrolls, issuing monthly on the first Friday of the month.

2) Trading system based on technical analysis.
There are plenty of Trading system for this type. Here are a few of them:
A) Indicator Trading system development methodology strategies.
That is a Trading system built on the use of indicators. Most traders use it up. One of the simplest and most frequently used strategies for this species - a Trading system based on moving averages, Bollinger bands, MACD moving average convergence divergence, RSI Relative strength index, and etc. However, because moving averages work is only acceptable if the trend, often using more indicators, such as stochastic oscillators, Relative strength index RSI, MACD Moving average convergence divergence and etc.
B) Graphical figures.
In technical analysis, there is a lot of graphics shapes, often occurring on the charts, especially on large timeframes, such as head and shoulders, double bottoms, triangle, etc. These figures traders predict future market behavior.
B) Trading system based on the rebound from the support level of \ resistance
That is, if a trader sees what is going on the rebound from the support level \ of resistance, he puts on the fact that the price will move in the direction of rebound for some time.
D) Trading system based on the breakdown at the level of support \ resistance.
A very popular strategy. It is believed that in most cases, the price, breaking through this level, will continue to move in this direction to the level of support support \ resistance. Although it is not always the case.
D) Following the trend.
It is believed that the probability that the trend will continue higher than what would be a reversal. Based on this transaction is in the direction of the trend.

3) The Martingale.
In its pure form Martingale Forex is opening a position in any direction with a certain take profit and a doubling of the lot if the price goes the wrong way by the amount equal to the size of Take Profit. So doubling each time, up until the market does not unfold in the right direction on the value of the nearest Take Profit. In this case the order to close all possible at the same time. Then the locks profit, unless of course, the cost will be spread more.
Not seen in this form was used martingale, often it is used only as a supplement to the basic strategy, if the price goes the wrong way, but there is confidence that it will necessarily unfold. If you get carried away by Martingale can be drained completely of any deposit. In this sense, is illustrative Udmurtinveststroybanka who poured 220 million rubles, representing 99% of OFBU "Basic".
There are different types of classical martingale, for example, anti martiangle. The name in this case speaks for itself. When profits rise, lots more to increase profit. And when the price moves against us - is reduced.


As you can see from the article, strategies forex many kinds, and I think they are all profitable, if you use them wisely. And any, even the most profitable strategy will drain if there is no proper money management. No need to strive for profit, he will just have to wait. Some people hold the position for half the year, waiting for him. And, perhaps most importantly - it does not make money, not lose it. Developed a successful strategy - follow her, not violating its principles. But at the same time, we should understand that over time, most likely, your profit strategy ceases to be such, that's when it will be necessary to change something, to adjust to the market.

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