Trading System, Trend Following

TME 030: Market Trends


Market Trends

We have talked a lot in the past about trend following but how do we find market trends? We can talk about a method all day long but it would also be good if we talked about how to do it. Markets trend up and they trend down. How do we find those market trends?

To some people the market is like a rollercoaster. I’m not the type of person that likes rollercoasters. Sometimes when you go to the movie theater they put up a simulation of a rollercoaster on the screen. If I follow that close enough I feel like I’m getting sick.

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Trading System

TME 013: Trading System


What is a trading system?

A trading system is a set of repeatable rules, that answers the following questions that a trader might have:

1) When should I enter a trade?

2) When should I exit a trade?

3) How much volatility is in the market?

4) How much should money I place the trade?

5) How much money should I lose on a trade?

A good trading system will answer those questions before a trade is ever placed.

The driver of any good trading system is the (buy and sell) signals. How do you know when to get into a trade?  This is where technical analysis comes in.  Technical analysis is an integral part of any trading system. Many tools have been developed by others to determine buy and sell signals some are below:

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