Best of the Week
Most Popular
1. Trumponomics Stock Market 2018 - The Manchurian President (1/2) - Nadeem_Walayat
2.Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - Dan_Amerman
3.China is Now Officially at War With the US and Japan - Graham_Summers
4.Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18 - Plunger
5.Stock Market Longer-Term Charts Show Incredible Potential - Chris_Vermeulen
6.U.S. Stock Market Cycles Update - Jim_Curry
7.Another Stock Market Drop Next Week? - Brad_Gudgeon
8.The Death of the US Real Estate Dream - Harry_Dent
9.Gold Market Signal vs. Noise - Jordan_Roy_Byrne
10.The Fonzie–Ponzi Theory of Government Debt: An Update - F_F_Wiley
Last 7 days
Moving Averages Help You Define Market Trend – Here’s How - 14th Aug 18
It's Time for A New Economic Strategy in Turkey - 14th Aug 18
Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - 14th Aug 18
Dow Stock Market Trend Forecast 2018 - Video - 13th Aug 18
Stock Market Downtrend to Continue? - 13th Aug 18
More Signs That the Stock Market Will Rally Until 2019 - 13th Aug 18
New Stock Market Correction Underway - 13th Aug 18
Talk Cold Turkey Economic Crisis - 13th Aug 18
Which UK Best Theme Park - Alton Towers vs Thorpe Park vs Lego Land vs Chessington World - 12th Aug 18
USD is Rising. What this Means for Currencies and Stocks - 12th Aug 18
Hardest US Housing Market Places to Live - Look Out Middle Class - 12th Aug 18
America’s Suburbs Are Making a Comeback - 12th Aug 18
Stock Market US Presidential Cycle, Seasonal Analysis and Economy - Video - 12th Aug 18
Yield Curve Inversion and the Stock Market - Video - 11th Aug 18
Land Rover Discovery Sport 1st Dealer Oil Change Service - What to Expect - 11th Aug 18
How to Setup Webinars and Use Them to Overcome the Barriers in E-Learning - 11th Aug 18
Big US Stocks’ Q2’18 Fundamentals - 11th Aug 18
Dow Stock Market Trend Forecast 2018 - 10th Aug 18
SPX Testing Its First Support Level - 10th Aug 18
Dreaming of a "Comfortable Retirement" on a Public Pension? - 10th Aug 18
The Forrest Gump of All Future Democrat Election Losses - 10th Aug 18
More Uncertainty as Stocks Got Closer to January Record High - 10th Aug 18
Gold and Silver Kill Zone - 9th Aug 18
Even More Cracks in the Gold Dam - 9th Aug 18
Ignore the Stock Market “midterm election year”, Which is “supposed” to be Weak - 9th Aug 18
Stock Market Trend and Volatility Analysis - Video - 9th Aug 18
Tips on Maximizing Small Serviced Offices Space - 9th Aug 18
VIX’s Collapse is Bullish for VIX and the Stock Market - 9th Aug 18
Vestles Platform Offers Several Key Trading Tools - 8th Aug 18
US Stock Markets Higher Until November 2018 - Part 2 - 8th Aug 18
US Stock Markets Higher Until November 2018 - Part 1 - 8th Aug 18
Stock Market US Presidential Cycle and Seasonal Analysis - 8th Aug 18
Is the Stock Market Correction Over? - 7th Aug 18
Yield Curve Inversion and the Stock Market - 7th Aug 18
Stock Market Elliott Wave Analysis and Forecast - Video - 7th Aug 18
Trade War! Win the Economic Hostilities Against the Chinese - 7th Aug 18
Technical Analyst Sees Silver as 'Oversold' - 7th Aug 18
Alex Jones Banned! Will Unapproved Opinions Be Censored Off the Internet? - 7th Aug 18
Gold and Silver Stocks On the Verge of the Next Major Decline - 7th Aug 18
First Time Buyers Need to ‘boost the affordability’ of Their Move Alone  - 7th Aug 18
Long Term Care Homes as an Investment are Heating Up! - 7th Aug 18
The Exponential Inflationary Stocks Bull Market - Video - 6th Aug 18
Land Rover Discovery Sport Oil Change Service Dash Warning Message - 6th Aug 18
Restructuring of Western Economic Power - 6th Aug 18
Stock Market Trend and Volatility Analysis - 6th Aug 18
Stock Market and Economy False Narratives That are Just Wrong - 6th Aug 18
VPN – Is It Worth It? - 6th Aug 18
All You Need to Know About Umbrella Companies - 6th Aug 18
Why China Lost the Trade War Before it Even Began - SSEC Stocks Index - Video - 5th Aug 18
Dow Stock Market Elliott Wave Analysis - 5th Aug 18
Iran's Rial Currency Is In A Death Spiral, Again - 5th Aug 18
IMF Produces Another Bogus Venezuela Inflation Forecast - 5th Aug 18
Gold & Silver Precious Metals Monthly Charts - 5th Aug 18
Time to Position for a Decade-Long Bull Market in Natural Resources - 5th Aug 18

Market Oracle FREE Newsletter

Trading Any Market

How to Develop a Trading System From Novive to Profitable Investor

Interest-Rates / Trading Systems Dec 06, 2013 - 06:27 AM GMT

By: Chris_Vermeulen

Interest-Rates

When it comes to becoming a successful investor or your, automated trading system development process for that matter, there are some big picture things that you must have figured out. Here are some tips that will help you get started in becoming a long term consistent and profitable trader, investor or automated trading system developer.


Having A Master Plan

I’m not talking about a detailed trading plan, but a plan on what strategy or automated system you want to develop over the next 3-6 months. For example, you might have a goal to develop two trading strategies over the next 6 months. One strategy for uptrends and the other for downtrends.

Making money in both market conditions is crucial for long term success and these two strategies you should be focus. All your strategy development should be focused on reaching these two primary goals.

This master plan does not necessarily need to be detailed. It is simply your reminder to keep you focused and on the right path. You should probably review your master plan on a weekly bases. For more information on why having a master plan and treating trading as a business is important see Brian’s course which I took myself also… Trading As Your Business. 

The Trading System Development Step-By-Step Process 

If you’re like most people you are developing your trading strategies and automated trading systems without following a well-defined process and understand the steps and order things need to be executed for trading system mastery. If this is you, then you need to focus and figure this process out before doing anything else. You are probably missing trading opportunities, wasting time and spinning your wheels wondering why you are not seeing progress. I’m going to give you a recommendation that can really boost your effectiveness as a strategy or automated system developer.

You must create a process on how you build and test your trading strategy. Your system development process should explain how to test and what to test. It should describe the order and flow of your development process along with check-lists on what types of orders should be used for stops, targets and exits.

Using a documented system development process will provide structure and discipline so you can get your trading system built, tested and making your money in a much shorter period with less frustration.

In short, it will do wonders for your system development process. “Trading System Mastery – by Brian McAboy” is a fantastic starting point on building your own trading strategies and automated trading systems. I took his course a few years ago to help refine my trading goals, rules, and automated trading system blue prints for my programmers. Brian and I now talk weekly and are good friends.

I’m also working on explaining this development process in more detail. When I finish I will send you an update.

Don’t Get Distracted, Have Laser Beam Focus

Distractions and procrastination is a big problem for many of us. We get distracted from what we are doing very easily. Anytime you find yourself starting to wander from your task of building, testing and running your first system, ask yourself if what you are doing is getting you closer to your goal.

Don’t start chasing every new trading idea, concept or indicator you read about, I know… It’s easy to do and exciting but DON’T! Do what I do, make a detailed note with all the thoughts you have on that idea so you know that when you finish with your first system, you can go back, review your notes and look deeper into that idea you had. Trust me, this will do wonders to your progress and mind frame.

There is no better feeling than seeing progress on a trading system and knowing you have 5 -10 other great ideas on paper to work on next… The sky is the limit, but focus on one idea/strategy at a time.

There Is No Get Rich Quick Trading System – Not many…

We all know there is no consistent get rich quick trading system, but there are some that can make you wealthy within a year if the stars align and you are extremely aggressive. What I am referring to are the futures compounding strategies some of the lucky traders were blessed with.

Yes there are some traders out there who actually turned $10K or $50K into $1, $2, or $4,000,000 within a 12 or 18 months. But they are few and far between. This type of trading requires 100% risk capital and you more or less win huge or lose it all, although I am working on a very exciting project now on how to do this with very little downside risk using one of my intraday futures trading systems. I will update on this in a few weeks once I have more solid numbers.

Anyway, back to NOT getting rich quick…

You need to expect the journey to financial freedom to be painful at times but if you follow your proven systems your success can be consistent and that is what is important. You will make mistakes and the markets will humble you at times. There are no free lunches and you will work for a strong return on your investment.

Money Management – Manage it or Lose

Once you have a solid performing trading system, you will need to start learning and testing out the best way to manage positions. This is also known as money management. Doing so can really leverage your system or simply be the difference between it making money or not. I recommend read a book or watching videos on money management on how to scale in and out of positions as that is the key to success I think.

Don’t Wait Until It’s Perfect

Perfection does not exist with any trading system. The financial markets are always evolving and you will have losing streaks and winning streaks. Just make sure the system is working correctly. Test it in simulation mode and start trading it with small amounts of money. You are system will never be perfect and it does not need to be perfect in order to make money.

Do Not Ever Fool Yourself – Fudging the Numbers is a NO NO

Do not attempt to fudge numbers while testing your trading system. Be honest in your backtesting reports and manually review all backtested trades for completeness and accuracy. General rule of thumb… double your commission costs, and factor in 25% slippage. This may sound crazy but you will be amazed at just how accurate these numbers will be with your real-time results with real money.

If your automated trading system does not post gains with commission fees and a 25% slippage, then continue to improve your trading strategies. Set Goals, Reach, Repeat… and nothing less…

Talk soon,
Chris Vermeulen

Please visit my website for more information. http://www.TheGoldAndOilGuy.com

Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com.  There he shares his highly successful, low-risk trading method.  For 7 years Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets.  Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return.

This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Chris Vermeulen Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules