Developing a GBPNOK Indicator Based GBPNOK System

A GBPNOK System refers to a set of GBPNOK rules that you follow to manage your GBPNOK trades. These GBPNOK rules will determine when you open a GBPNOK trade & when you'll exit. A GBPNOK trade system is created by combining 2 or more indicators.

For example, the Stochastic Oscillator can be combined with other indicators to form a GBPNOK system. For this example stochastics can be combined with the indicators below to come up with the following GBPNOK system.

• RSI
• MACD
• Moving Averages Trading Indicator

Example

Creating a GBPNOK System - GBPNOK System Example

So the question is how can one come up with a GBPNOK systems that works & how does one write its rules? Follow the steps below:

Seven steps to creating an indicator based GBPNOK system

To come up with these set of rules for GBPNOK currency pair we use the following seven steps.

1. Choose your GBPNOK Time Frame

The first step depends on the number of hours you want to dedicate to GBPNOK trading. Whether you prefer sitting in front of the Desktop computer constantly for several hours analyzing short GBPNOK time frames OR you prefer setting up your charts using bigger GBPNOK time frames once or twice a day. Choosing a charts time-frame will mainly depend on what type of GBPNOK currency trader you are.

GBPNOK Chart Time Frames in MetaTrader 4 - GBPNOK MT4 Chart

While testing your new GBPNOK system you may want to find out about its performance on different GBPNOK chart timeframes and then choose the most accurate & profitable GBPNOK chart timeframe for you.

2. Select indicators to identify a new trend

The goal of a GBPNOK currency trader is to get into the GBPNOK trade as early as possible and take maximum advantage of price moves.

One of the common ways to identify a new GBPNOK trend as fast as possible is to use MAs Indicator. A simple system is to use a MA cross over system that will identify a new GBPNOK setup opportunity at its earliest stage.

Moving Average Crossover Technique - GBPNOK Strategy

GBPNOK Sell signal and GBPNOK Buy signal Generated by Moving Average Crossover Strategy Method

3. Select additional indicators to confirm the GBPNOK market trend

Once we find a new GBPNOK trend we need to use additional indicators that will confirm the GBPNOK entry signals & give either a green light for action or save a trader from fake-outs.

To confirm the signals we use RSI and Stochastic.

RSI & Stochastic Oscillator GBPNOK System

4. Finding entry and exit points

Once indicators are chosen so that one indicator gives the signal and another confirms the signal, it is time to enter a GBPNOK trade.

A GBPNOK trader should enter as soon as a signal is generated and confirmed after a candlestick closes.

Aggressive GBPNOK traders enter a transaction immediately without waiting for the current price bar to close.

Other GBPNOK traders wait until the current price bar is closed and then enter the transaction if the GBPNOK trade setup has not changed and the signal remains valid. This method is more considerate and prevents additional false entries and whipsaws.

Generating GBPNOK Signals

Generating GBPNOK Trade Signals

For exits, a trader can either set an amount he wants to earn per trade or use technical tools that help to set profit goals like Fibonacci Expansion Indicator or set a protective stop loss depending on the GBPNOK market volatility at any one particular time. Alternatively a trader can exit when the indicators give an opposite signal.

When opening a new GBPNOK trade transaction it's always important to calculate in advance how much you are willing to lose if the GBPNOK transaction goes against you. Although the goal is to create the best GBPNOK system in world, losses are inevitable & therefore being ready to tell where you will give up & cut your losses before beginning a GBPNOK trade transaction is very important.

5. Calculate risks in each GBPNOK trading setup

In you must calculate your risk for each GBPNOK trade. Serious GBPNOK traders will only enter look to open an order it the risk:reward ratio is 2:1 or more.

If you use a high risk:reward ratio like 2:1, you greatly increase your chances of becoming profitable when trading GBPNOK in the long run.

The Risk-Reward Chart below displays you how:

Forex Money Management Reward Risk Chart - GBPNOK Trading

In the first examples of Risk-:-Reward Ratio, you can see that even if your GBPNOK system only won 50% of your open GBPNOK trades, you would still make a profit of $10,000. Interpret more on this course: Here Money Management Rules and Trade Money Management Methods.

Before opening a new GBPNOK trade, a trader should define the point at which he will close the open GBPNOK trade if it turns to be a losing one. Some traders use Forex Fib Retracement Levels and support and resistance levels. Others just use a pre-determined stop loss to set stop loss order once they have opened a GBPNOK trade.

6. Write down the systems GBPNOK rules & follow them

A Trade System refers to a set of GBPNOK rules that you follow to manage your GBPNOK trades.

The keyword is A SET OF GBPNOK TRADING RULES which you must follow. If you do not follow the GBPNOK currency pair rules then you don't even have a trading system in the first place.

The next systems lesson portrays to you an example of how to utilize the above steps to create your own GBPNOK online trading system:

Next Guide: Example of Writing GBPNOK Systems Rules

7. Practice on a GBPNOK Demo Practice Account

Without enough GBPNOK trades, you will not be able to realize the true profitability of your GBPNOK system.

Once you have your GBPNOK system rules written, it's time to test & improve your GBPNOK trade system by using it on a GBPNOK demo practice account.

Open a free demo practice account and trade GBPNOK your system to see how well it will respond.

It is strongly recommended to begin with a practice account and practice for at least for 1 or 2 months so as to gain some practice & experience how the GBPNOK currency pair works.

Once you start making some decent profit on your GBPNOK demo account you then can try opening a live account & begin trading GBPNOK currency pair with real money.