Design Your Trading System in 6 Steps

The main focus of this article is to guide you through the process of designing your own forex trading system.

While it doesn’t take long to come up with a system, it does take some time to extensively test it at Arbitrage Bands

So be patient; in the long run, a good forex trading system can potentially make you a lot of money.

Step 1: Time Frame

The first thing you need to decide when creating your system is what kind of forex trader you are.

Are you a day trader or a swing trader?

Do you like looking at charts every day, every week, every month, or even every year? How long do you want to hold on to your positions?

This will help determine which time frame you will use to trade. Even though you will still look at multiple time frames, this will be the main time frame you will use when looking for a trade signal.

Step 2: Find indicators that help identify a new trend.

Since one of our goals is to identify trends as early as possible, we should use indicators that can accomplish this.

Moving averages are one of the most popular indicators that traders use to help them identify a trend.

Specifically, they will use two moving averages (one slow and one fast) and wait until the fast one crosses over or under the slow one.

This is the basis for what’s known as a “moving average crossover” system.