Trading System Design - Part 1

October 28, 2008 by admin · 13 Comments
Filed under: trader training 

In trading, your system is your method and strategy all combined into one and is what gives you consistency, protects you from substantial losses (hopefully) and provides a sufficient number of profitable trading opportunities.

When you have a system that you fully understand and believe in, this helps tremendously with the whole ‘trading psychology‘ aspect of being a trader.

Needless to say, having that reliable system is also one aspect of trading that many people struggle with.  Not necessarily finding or creating one, as they can be found all over the place and making one isn’t really that tough either.

Anyone can make up a system, be it mechanical or discretionary, technical or fundamental, or any combination.  Heck just throw some ideas out there and you have a system.

The challenge is ending up with a GOOD system that meets your objectives, fits your comfort zones and performs RELIABLY so that you can have the confidence in it to stick to it with the winners and losers alike - the old discipline challenge.

As you probably know, I created the Trading Performance Analyzer so that you can analyze, evaluate and track the metrics on an existing system, activities that are tremendously helpful in building (or rebuilding) confidence in an existing system, comparing systems to see which is best, and to evaluate changes made to your system when you wish to optimize it.

The new project that I’m working on is a Trading System Design Guide for more of an Engineer’s approach to designing a trading system from scratch, but in layman’s terms, applying the strategies and thinking that I’ve learned over my years as an Engineer.

Where I could use your help is to know what your thoughts, questions and concerns are when it comes to trading systems.  This is wide-open here, so any questions you have are welcome.

My objective here is to end up with a guide for designing a trading system that is geared to the beginning, novice and intermediate trader, that will provide you the step-by-step process for designing your own trading system that works, is user-friendly and makes complete sense to you.  No more ‘black box’ or ambiguous system to work with.

Simply post your thoughts below.  Again, this is wide open, so any question, thought, concern or suggestion is welcome.

Thanks, and yes I will be making this available to you when it’s completed.

Cheers

Brian

P.S.  This is the first of a few posts on this project, and the questions will get more detailed as we go along, so make sure to check back here or be checking your inbox.

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