Trading Strategy Design – Testing & Trading the Strategy

Once you have designed all of components the strategy, you may then want to test it. In order to test a strategy, you have to test each part by adding it to the strategy one at a time, to see if there is improvement and, if so, how much.

The first part would be the set-up to see how profitable it is on its own. The next is the entry and see what the improvement is. This is the backbone of the strategy. When you have proven that you have a viable set-up and entry, then you can move on to test exits, and then money management stops. If the strategy is not profitable at this point, you have either picked the wrong indicators or still have some design flaws that need to be fixed.

Amateur traders think that they can fix a strategy through optimization. They think that even if a strategy loses money, they can fix it by optimizing the lengths of the indicators. It is wrong. Optimization should never be used to make an unprofitable strategy viable. It should make a profitable strategy more profitable. It should only be used for tweaking the profits. Optimization should never be used to make a bad strategy good.

When you have designed a viable strategy and improved it through optimization. You are now ready to trade the strategy. If you are truly going to run our trading like a business, you have to implement the strategy as designed. Do not beat the strategy, try and second-guess the strategy, by personally filtering the trades based on your own ideas.

Corrupting the strategy through filtering trades with personal bias is a major problem that beginners face. There are many possible distractions during the trading day, unusual market action, and important breaking news and etc. But reproducing the strategy in real time is a bad idea. You have to trade it exactly as it has been designed and tested in the past. The distractions during the day may make it difficult to implement the strategy exactly as it was designed.

If you have trouble putting on your trades as your strategy, you should make sure that the characteristics of the strategy fit your own trading style, that you can accept the risk and drawdown and comfortably take all of the losing trades. If you cannot take the losses and drawdown, you must either fix the strategy or find a new one that is more in harmony with your personality.

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

Posted in Uncategorized | Comments Off on Trading Strategy Design – Testing & Trading the Strategy

Strategy Designed For the Meta Traders

FOREX EA shark is an automated system, trades with out any user intervention and returns stable profits. Shark expert advisor is the ultimate intraday trading system, evaluating over twelve indicators, pivots, fibs, and support and resistance levels on multiple time frames to analyze the market. The result is a system which executes an average two trade’s even trading day and wins 85% from all trades.

Features:

1. Online time payment updates are included.
2. Trading in LIIVE accounts
3. Tested back in 1999
4. Built in money management
5. Stable in any market condition
6. Low risk trading system is possible.

This FOREX EA shark has the capacity of real money accounting performance with initial deposit, current balance and also capital growth rates.
For example where as the real money balance accounting is concerned the exchange rates may start from $0 to $120,000 etc…with every year analysis and growth rates are concerned.

EA shark has also a Back testing performance.It can be analyzed by tick-by-tick data basketing as EA shark generation.for example $7,169,732 in profits if it runs from 1999 to present. This proves that FOREX EA systems EA shark is stable system for a long period of times.

FOREX EA shark is comprised of experienced traders and professionals programmers who develop high end automatic and manual trading systems.
Every offered systems has been running LIVE since from the past years and tested with historical data for a period of reliable years to ensure that it will work in different market conditions.

EA shark includes proFX also, that will help you to make real money trading in the largest and greatest market in the world
FOREX EA shark comprises of automated systems and also trading systems.

They are:-
Manual system:-
ProFX manual trading strategy designed for the Meta Trader 4 platform has clear trading rules that are easy to understand. The great thing about this strategy is that it will alert the trader automatically when a possible entry comes up.
Features:
1. No monthly fee
2. winning strategy
3. audio alert category
4. clear strategy rules
5. works on multiple FX pairs
6. Level wise analyzation.

Automated system:
Shark Expert Advisor is the ultimate intraday trading system, evaluating over twelve indicators, pivots, fibs, and support and resistance levels on multiple timeframes to analyze the market. The result is a system which executes on average two trades every trading day and wins 85% from all trades.

Posted in Uncategorized | Comments Off on Strategy Designed For the Meta Traders

Trading Strategy Design – Choose Trading Time Frame

After making the decision on what type of market you will trade as I talked about in a previous article, you now come to the making decision as what time frame you will trade. This decision is also an important one when you are designing a trading strategy.

Firstly, you have to decide decide whether you will trade intra-day or not. If you trade intra-day, you will become a day-trader that means trading full time. It may be possible to trade intra-day while yiu have a day job but it is very difficult. So, I would not recommend that you to trade intra-day unless you can devote your full attention to trading.

Generally, most people want to trade only part time and still hold down a day job. Therefore, it is better to trade daily or weekly charts. Since you will only be able to look at the market after hours so you have to take this into account when you do your strategy design.

The designed strategy should not require checking the market during the day. However, I believe that the more bars you can trade, the more money you can potentially make. That means trading intra-day is potentially more profitable as there are more bars condensed into a unit of time.

For example, in a period of month, there are 280 bars in 30-minute charts, 20 bars in daily charts, 4 bars in weekly charts and only 1 bar in monthly charts. So, there is potentially more money in the 30-minute charts than the daily charts, potentially more money in the daily charts than the weekly charts, and potentially more money in the daily charts than the monthly charts.

Then, to make $10,000, it should take less time on the 30-minute chart than the daily chart, weekly and monthly chart. When trend trading on 30-minute charts, you may trade through 5 or 10 days of directionless market before the relatively big move occurs while on a daily chart, the chop may last six months or longer, and on the weekly charts the sideways market could last for years.

In addition, the risk per trade is generally greater when you trade with the longer time frames. Most entries and exit orders are based on market action. Since we usually put an exit order below the low of the previous bar, this could be 30 points on a 30-minute chart, 500 points on a daily chart and 1500 points on a weekly chart. The difference in risk is substantial, but the reward should be proportionally as large.

There are no right answers in choosing the time frame. It depends on a personal decision. And you have to make this decision before you start looking for indicators, as the choice of indicators is influenced by the time frame selection.

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

Posted in Uncategorized | Comments Off on Trading Strategy Design – Choose Trading Time Frame

Trading Strategy Design – Using Exits

Usually, most trading strategies start with defining a signal to take a position in the market. To design the signal we use set-up and entry which have been described in earlier articles.

For the exits, in theory, we may use reversing of signal to define the exit. For example, if you use trend-following strategies and you enter a long position according to the set-up and entry tell you, then you me exit the market when the set-up and entry tell you to go short.

However, if you find an indicator or signal that tests well, you can improve on it by using various exit strategies. There are various reasons to use an exit rather than just reverse a position.

The most common is you can take a profit at a predetermined price level or indicator level. This would be a profit objective.

Another reason would be when you are writing a strategy that is based on several indicators (perhaps two set-ups and an entry), all indicators must be in gear before a position is taken. When one or two of the indicators turns against the position, the strategy exits the market, waiting for the three indicators to agree again.

One of the most common errors in strategy design is when traders use either the set-up or the entry as an exit. The use of an exit is less important if you focus on the concept of set-up and entry because the set-up and entry technique is very effective by itself. So, using either set-ups or entries as exits is not the recommended thing to do.

Exits must based on market activity. Exits must not be designed to save you money or protect your capital. That is what we have to stops for. Exits should be used to increase your profits.

Exits may be more appropriate for short-term trading strategies, such as volatility expansion strategies or support and resistance strategies, than the long-term trading strategies such as trend-following strategies. Since the short-term trades can take advantage of short-term market conditions.

For example, in a volatility expansion strategy, we wait for the next increase in volatility and then enter the market. We would then devise an exit that would get us out of the market when the volatility increase had run its course. Or, when we had achieved our profit objective.

While in trend-following strategies, we must be sure that if the exit rule gets us out of the market, the entry makes sure that we are back in for the big move for which the strategy is designed. Sometimes using an exit signal prevents a timely entry back into the market, and the strategy misses the next move.

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

Posted in Uncategorized | Comments Off on Trading Strategy Design – Using Exits