Technical Analysis

Building a Trading System

The capstone: turn everything you've learned into one rule-based system you can actually run. Define your market and timeframe, your entry, exit and size, then backtest it, forward-test it, and learn when to trust the edge — and when it's broken.

0 / 10 done

StartLesson 1 · What a Trading System Is

What you’ll leave with10 lessons · 10-line playbook

A system is five written rules: market, entry, exit, size and review. Trade it only if it makes money per trade on average.
Trade a timeframe you can watch, in a liquid market that trends in clean steps. Buy only when the weekly agrees.
Enter only when all four rules are true: trend, value, trigger and location. Three out of four is a stand aside.
Risk 1% a trade. Stop under the pullback low, first target +2R or the prior high, then trail under each higher low.
Count reasons in families, not indicators. One is Skip, two is Watch, three or more is Take. Momentum or volume makes it stronger.
Run your rules over old charts, left to right, and log every signal in R. Trust the expectancy only after 20 trades.
Paper-trade the rules and journal every trade, missed ones too. After 20, compare with the backtest before real money goes in.
Trust a broad plateau, never a lone spike. Keep settings few, test them out of sample, and forward-test again after any change.
Judge drawdowns against the backtest. Inside the band, keep trading. A longer streak or a range, cut size. Through it, halt and review.
A system is five parts run as one loop: market, entry, exit, size and review. Run it the same way every time.

Building a Trading System

All lessons