Trading Trading Strategy Rules: Write The Rules of Your System & Follow Them

We shall use the previous steps to create a written and noted down system that generates the trade signals shown below using the 1H chart. We shall use the H1 chart to write down the rules of this trading strategy.

A trading system consists of a set of written rules that guide you in managing trades in the market. Writing these rules down ensures clarity and adherence to your strategy. This tutorial outlines the process of documenting the rules for your system effectively.

The essential concept is a SET OF RULES that you, as a Forex trader, must adhere to. Failing to comply with these trading rules means you lack a trading system. A system must consist of rules that are documented within your plan.

Explanation of System below:

Writing Rules of a Strategy - 1 Hour Chart Time Frame Strategy Template Example

Establishing the Definitive Rules for a Trading System - A Sample Template Based on the 1-Hour Chart Time Frame

You can create the above system using the steps below:

Step 1:

Select your Chart Time-frame - H1 chart

Step 2:

Choose Indicators which spot a new trend - MA Crossover System.

Step 3:

Opt for Technical Indicators that validate the existing trend - such as RSI, Stochastic.

Step 4:

Identifying entry and exit points
Long Entry
Both Moving Average pointing up
RSI above 50
Stochastic oscillator technical indicator going up
Short Entry
Both MA(Moving Average) pointing down
RSI below 50
Stochastic oscillator technical indicator going down
Exit
Moving Average generates in the opposite trend signal
RSI generates in the opposite trend signal

Step 5:

Determining potential hazards in every single exchange - a 20 pip buffer

Step 6:

Write down the trade system rules

Step 7:

Strategy Assessment Using a Simulated Trading Account (Demo)

Following the guidelines we developed, the resulting set of prescriptive trading rules is detailed beneath.

Writing System Rules

Write Rules System - Writing Strategy Rules

Example of How to Write System Rules - Writing Systems Rules

This trading strategy produces the signals just as is illustrated and shown below. Using these rules, traders can determine when to enter and exit trade positions.

How Do You Generate Buy & Sell Trading Signals using Written System Rules?

How to Create Buy & Sell Trading Signals Following Written System Guidelines

We have finished writing the trading rules, if you're researching on how to develop the best system, this course is a good start and begin to tutorial you on how to do just that. This is one part of the trading plan. Now how do you as a trader create a complete plan? - To read about how to create a trading plan go to the right navigation menu of this website under the key concepts where you as a forex trader can find a link for this trade plan tutorial topic.

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