Stock System Rules: Write Down The Rules and Follow Them

We shall use the previous steps to come up with a written stock trading system that generates the trade signals displayed below using the 1 hour chart. We shall use the 1H stock chart to write the rules of this stock trading strategy - stocks trading system.

A stock system refers to a set of written stock rules that you follow to manage your trades. These rules must be written down so as to tutorial you. The following tutorial will show you how to write-down the rules of your trading system.

Keyword is a SET OF RULES which you must follow. If you don't follow the rules then you don't have a stocks trading system. Trading systems must have rules which are written down within your stock trading plan.

Example of Stocks Trading System below:

Writing Rules of a Stock Trading System- 1 hour Stock Chart Time frame Trading

You can come up with the above stock system using the steps below:

Choose your Chart Timeframe - 1H stock chart

Choose Technical Indicators that spot a new trend - Moving Average Crossover System.

Select Technical Indicators which confirm the stock trend - RSI, Stochastic

Finding entry & exit points

Long Entry

1. Both Moving Average pointing up
2. RSI above 50
3. Stochastic oscillator going up

Short Entry

1. Both Moving Average pointing down
2. RSI below 50
3. Stochastic oscillator going down

Exit

1. MA gives opposite signal
2. RSI gives opposite signal

Calculating risks in each trade - 20 pips

Write down the stock trade system Stock rules

Test the system on a stocks demo trading account

After using these steps we create written stock system rules below.

Writing Stock Trading System Stock Trading Rules

Examples of How to Write The Best Stock Trading System Rules

This trading system produces the signals as shown below. Using these rules traders can determine when to enter and exit trades.

Generate Buy and Sell Stock Trading Signals using Written System Rules

We have completed writing the rules, if you are researching on how to create the best stock trading system, this tutorial is a good start to guide you on how to do just that. This is one part of a the stock trading plan. Now how do you create a complete stock trading plan? To read about Stock plan tutorial go to the right navigation menu of this website under key concepts where you can find a link for this Stock trade plan topic.