Making a GBPNZD Indicator Based GBPNZD System

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

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

• RSI
• MACD
• Moving Averages Indicator

Example

Creating a GBPNZD System - GBPNZD System Example

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

Seven steps to creating an indicator based GBPNZD system

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

1. Choose your GBPNZD Time Frame

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

GBPNZD Chart Time Frames on MT4 - GBPNZD MT4 Chart

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

2. Select indicators to identify a new trend

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

One of the common ways to identify a new GBPNZD 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 GBPNZD setup opportunity at its earliest stage.

Moving Average Crossover Technique - GBPNZD Strategy

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

3. Select additional indicators to confirm the GBPNZD market trend

Once we find a new GBPNZD trend we need to use additional indicators that will confirm the GBPNZD 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 GBPNZD 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 GBPNZD trade.

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

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

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

Generating GBPNZD Signals

Generating Forex GBPNZD 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 GBPNZD market volatility at any one particular time. Alternatively a trader can exit when the indicators give an opposite signal.

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

5. Calculate risks in each GBPNZD trading setup

In you must calculate your risk for each GBPNZD trade. Serious GBPNZD 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 GBPNZD in the long run.

The Risk-Reward Chart below displays you how:

Forex Money Management Reward Risk Chart - GBPNZD Trading

In the first examples of Risk-:-Reward Ratio, you can see that even if your GBPNZD system only won 50% of your open GBPNZD 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 GBPNZD trade, a trader should define the point at which he will close the open GBPNZD trade if it turns to be a losing one. Some traders use FX Fibo 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 GBPNZD trade.

6. Write down the systems GBPNZD rules & follow them

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

The keyword is A SET OF GBPNZD TRADING RULES which you must follow. If you do not follow the GBPNZD currency pair rules then you don't even have a 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 GBPNZD online system:

Next Guide: Example of Writing Forex GBPNZD Systems Rules

7. Practice on a GBPNZD Demo Practice Account

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

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

Open a free demo practice account and trade GBPNZD 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 GBPNZD currency pair works.

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