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Simple Trading System

Many beginners in trading are looking for a simple trading system that would deliver profits without investing a lot of time into learning and developing this trading system. The professional trader with a skeptical smile thinks "I have spent several years researching and studying until I found something that would work for me… I have lost a lot of money until I realized how to use what I found and until I start to make some money…"

The answer is simple – there is no simple trading system. If there was one then everyone would start making money on the market. If this would be easy then everyone would be a winner.

The simple rule is - if you lost money on the market that means somebody put this money into the pocket as profit and if you make a profitable trade then somebody lost this money.

As you may see there is no simple system in the meaning of the trading system that is very easy to learn and very easy to use. Yet, the simple trading system could be built, however the process of the development could be very complex. The simpler the trading system looks at the end,  the more complex and more difficult was the process of developing this system.

There are a lot of simple trading indicators and many of them work. Yet, it's not an easy process to start using them. Even if the trading system looks very simple at the end, most likely there are many years of research, testing and adjusting behind this system.

You may find several trading systems already developed which look simple. For instance:

• RSI below 30 indicates an oversold market which could be a good point to buy while RSI above 70 indicates overbought market and could be a good point to sell.
• Stochastics below 20 indicate an oversold market and could be a good point to buy while Stochastics above 80 indicates overbought market and could be a good point to sell.
• Its good to buy SBV declines below 20% and it's good to sell when SBV advances above -20%.
• Many others…

Even if using technical indicators looks simple, it's not a final system yet. Many traders realize that this is a much more complex process when it comes to utilizing this trading system into the real market. A trader faces a lot of questions that need to be answered: what chart setting should be used, what stock to select, what timeframe to trade, how much money to invest, what stop-loss strategy to use…

The process of building a trading system could be divided into several stages:

1. Research – looking for indicators, selecting the market (stock market, options, futures, Forex…)
2. Learning – studying the selected indicators, markets, selected securities. If at the end of studying a trader realizes that something does not work he/she has to return back to stage #1.
3. Developing – based on your knowledge of the indicators and market a trade develops the trading system, you monitor the market, adjust settings, create additional rules for using the system in Bull and Bear market as well as develop a stop-loss strategy and money management strategy that works well with this trading system.
4. Testing – the system should be tested in the real market and as a rule that's where all developmental mistakes come out.
5. Start using.

As you may see, the process of creating a simple trading system is not as easy as many of us would like to see it, and there is no guarantee that the developed simple trading system will be successful. After all efforts, a trader may find that the built simple trading system is a failure. It's great if you may find somebody who can help you, however there are not a lot of trades willing to share their experiences and as a rule the companies in the investment world are bounded by certain restriction and may not explicitly tell how to trade…

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