Trade Signals - How to generate Signals for Trading
As a trader one of the courses that you must learn in trading the market is how to generate trade signals. A signal is just a set of rules which illustrate when to buy or when to sell a forex currency pair.
For example, the simplest system is moving average cross over system which generates signals once 2 MAs cross over each other.
- Buy signal - MAs cross over pointing upwards
- Sell signal - Moving Averages crossover pointing downward
Forex Trading System
To confirm the signals generated one will need to create a system and a set of rules for this trading system.
A system is a combination of two or more indicators & a set of written rules that are used to generate these signals with.
· How to Write FX Trading Journals.
From the above trade system a trader can generate signals using the trade rules below
Buy signal
- Both Moving averages pointing upward
- RSI above 50
- Both Stochastics moving up-ward
Sell signal
- Both Moving averages pointing down-ward
- RSI below 50
- Both Stochastics moving downwards
An exit trade signal is generated when the MAs generate an opposite or RSI Indicator gives an opposite trade signal: A signal that is in opposite market direction.
