YOUR TRADING SYSTEM

CHEAT SHEET
EVERYTHING YOU NEED
FOR BUILDING OR EVALUATING
A PROFITABLE TRADING SYSTEM
YOUR TRADING SYSTEM
CHEAT SHEET
EVERYTHING YOU NEED
FOR BUILDING OR EVALUATING
A PROFITABLE TRADING SYSTEM
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So you wanL Lo bulld a sysLem or you are looklng aL a ready Lo Lrade" sysLem Lo buy. Where do you
begln? Pow do you know lf lL's a sysLem LhaL has Lhe componenLs you need? And ls lL Lhe rlghL sysLem
for Lhe klnd of Lrader you are? And flnally, do you even know whaL klnd of Lrader you are? Maybe you
know, buL maybe you are mlsslng ouL on a Lradlng sLraLegy LhaL would acLually make use of unLapped
sLrengLhs.
!"# %&'() *)#+,

1he flrsL sLep wheLher you are looklng Lo buy a sysLem or bulld one yourself ls Lo begln wlLh Lhe end ln
mlnd. Where do you wanL Lo end up? ?ou mlghL Lhlnk you already have clarlLy here (e.g. make money)
buL a mounLaln cllmber who !"##$%$ Lhe mounLaln he ls golng Lo cllmb has a much greaLer chance of
reachlng Lhe summlL Lhan Lhe cllmber who [usL sLarLs walklng up any old hlll.

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Pere are some quesLlons you can ask yourself Lo geL clarlLy.
uo you wanL Lo Lrade full Llme? Cn Lhe slde? arL Llme?
WhaL hours of Lhe day can you Lrade?
Are you aware of whaL klnd Lradlng sulLs you besL? l.e. scalplng, swlng Lradlng, Lrend or poslLlon
Lradlng? Maybe a blend? (1ake Lhe ersonal 1radlng 8las AssessmenL, a free LesL Lo help you
flnd your sLrengLhs wlLh regard Lo Lradlng sLyle, llnk below).
1hese mlghL seem all very obvlous quesLlons Lo ask buL l've come across many people who, for example,
boughL scalplng sysLems and Lhey are noL scalpers! Cnly afLer Lradlng unsuccessfully dld Lhey dlscover
scalplng was noL sulLed for Lhelr personallLy and / or experlence level.
lL's very lmporLanL LhaL you don'L have a vendor Lry and convlnce you Lo be a cerLaln klnd of Lrader - no
doubL Lhey'll [usL be dolng Lhls Lo geL you buy Lhelr sysLem. ?ou need Lo flnd Lhls ouL for yourself!
AL lndlcaLor Warehouse we have a free ersonal 1radlng 8las AssessmenL LesL LhaL you can Lake Lo help
you flgure ouL lf your personallLy and experlence lends lLself belng a scalp, Lrend, or swlng Lrader.
Cllck Pere Lo 1ake Lhe lree 1esL - 1he resulLs are kepL confldenLlal and emalled Lo you as soon as you
flnlsh Lhe LesL.
-".) &( . /01+2#)# (3()#14

A compleLe sysLem has:
a) a clear enLry slgnal,
b) an easy Lo follow exlL sLraLegy,
c) and sLrong money managemenL.
naLurally we are mosL concerned wlLh when a sysLem Lells us Lo buy - Lhe enLry slgnal. And we wanL Lo
know Lhe accuracy of LhaL recommendaLlon. 1raders ofLen geL caughL up wlLh Lhe accuracy. A vendor
mlghL promlse a hlgh percenLage of accuracy buL whaL exacLly are Lhe clrcumsLances Lhey are referrlng
Lo? WhaL lnsLrumenL are Lhey Lalklng abouL? WhaL Llme frame are Lhey uslng? WhaL Llme of day are
Lhey Lalklng abouL?
1he only way for you Lo flnd ouL Lhe Lrue accuracy ls Lo LesL Lhe sysLem wlLh your chosen Llme frame,
lnsLrumenL, Llme of day and oLher seLLlngs.
So leL's say you end up wlLh a 39 sysLem . or for LhaL maLLer a 90 accuraLe sysLem. uoes LhaL mean
you are assured of maklng money? unforLunaLely noL. Cnly wlLh Lhe proper appllcaLlon of Lhe oLher
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Lwo componenLs of a compleLe sysLem wlll you be on Lhe road Lo proflLable conslsLency. ln a momenL,
we'll dlg deeper lnLo Lhls.

!"# *3()#1 56() 7# *&1+2# .89 :2#.';

1hls ls Lhe klnd of charL l see far Loo ofLen.

lL's crowded wlLh Loo many lndlcaLors, glvlng you so much lnformaLlon, you can'L reacL fasL enough Lo
Lake Lrades or manage Lhem once you are ln.
We all know why Lhls happens. We Lhlnk LhaL more ls beLLer, more lndlcaLors wlll make Lhe charL
smarLer and Lherefore able Lo see more of whaL ls happenlng ln Lhe markeL. Maybe you do see more,
buL can you read whaL lL's Lelllng you fasL enough Lo make Lhe lnformaLlon useful?
?ou musL be able Lo look aL your charL and lmmedlaLely make a declslon and Lake acLlon. 1here's no
Llme Lo conslder Lhe nuances of a dozen dlfferenL Lools crowdlng your charL.

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!"# 7.2.8/&8< =/) 0> . ?009 *3()#1

A good sysLem ls one LhaL ls complex enough Lo fllLer ouL markeL nolse yeL slmple enough Lo produce
clear and conclse slgnals

-".) @&89 0> !'.9#' .'# A064

1here are so many dlfferenL ways Lo Lrade. Scalplng, swlng and Lrend Lradlng as well as poslLlon Lradlng
where you hold overnlghL. Many Lraders do a blend of Lhese, ulLlmaLely flndlng a mlx LhaL safely
dlverslfles Lhelr sLraLegles so as Lo noL puL all Lhelr eggs lnLo one baskeL.
Powever, sysLems - acLually Lhe slgnal generaLors LhaL power Lhem - are bullL Lo look aL Lhe markeL ln a
parLlcular way. A scalplng sysLem, for example, ls bullL Lo look for shorL Lerm changes ln supporL and
reslsLance. ?ou wlll llkely flnd lL very dlfflculL Lo Lake longer moves wlLh such a Lool.
lL's up Lo you Lo do your due dlllgence" Lo flnd ouL whaL Lhe slgnal generaLor was bullL for. 1here ls no
way LhaL a slngle slgnal generaLor can accuraLely deLecL scalp &'( Lrend moves so beware of vendors
who promlse Lhls one Lool does lL all."
Cnce you have a slgnal generaLor bullL for Lhe Lype of Lradlng you wlll do, you musL pay close aLLenLlon
Lo Lhe seLLlngs. 1hls ls where you geL down Lo Lhe nlLLy grlLLy of whaL you wanL your slgnal generaLor Lo
show. ?ou'll also be maklng crlLlcal declslons abouL whaL you wlll use as a sLop and Lhe seLLlngs, agaln,
all of Lhls based on Lhe klnd of Lrader you are.
A llLLle slde noLe. l ofLen flnd LhaL Lraders have chosen a sLraLegy LhaL ls lnapproprlaLe for Lhem. 1he
word 'scalp' has lured ln far Loo many Lraders Lo buy a sysLem LhaL really lsn'L rlghL for Lhem.
As l menLloned above, Adam aL lndlcaLor Warehouse had a Lradlng psychologlsL creaLe a free
quesLlonnalre Lo help Lraders deLermlne whaL klnd of Lradlng maLches Lhe sLrengLhs Lhey already
possess. 1hls enables you Lo lmmedlaLely zone ln on Lhe sLraLegles LhaL are a maLch for your
personallLy. ?ou can Lake Lhe free ersonal 1radlng 8las AssessmenL LesL here.

-".) 5.'B#)( -&22 A06 !'.9#4

Some sysLems are creaLed Lo Lrade speclflc markeLs. llnd ouL whaL markeLs Lhe sysLem has been geared
Lo - because Lhere ls no polnL geLLlng a sysLem LhaL Lrades a markeL LhaL you cannoL afford or oLherwlse
have no lnLeresL ln Lradlng.
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lf Lhe sysLem ls geared Lo a parLlcular markeL, check ouL whaL LhaL markeL ls dolng Lhese days. ls lL
volaLlle enough? Many sysLems only work lf Lhere ls enough volaLlllLy whlch may have been Lhe case
when Lhe sysLem was flrsL developed and released buL markeLs change and even Lhough Lhe sysLem ls
sLlll for sale, Lhe decrease ln volaLlllLy could make lL useless.

-".) :".') *)32# -&22 A06 C(#4

1here are so many charL sLyles avallable Loday. 1here are pros and cons for each and whlle you mlghL
spend some Llme LesLlng a few dlfferenL charL sLyles Lhe lmporLanL Lhlng ls Lo flnally commlL Lo one charL
sLyle and Lhe seLLlngs you choose for lL. 1he reason belng ls LhaL when you change your charL sLyle you
are essenLlally sLarLlng over, creaLlng a new sysLem.

!"# !D0 !3+#( 0> *3()#1(

?our sysLem ls golng Lo elLher be prlced based, or lndlcaLor based. newble Lraders wlll generally be
beLLer served by an lndlcaLor based sysLem. lndlcaLor sysLems have a much clearer slgnal and Lhere ls
much less need for sub[ecLlve / lnLerpreLlve Lhlnklng.
A prlced based sysLem requlres you Lo have more Lradlng experlence. ?ou have Lo know whaL Lo look
for. Many Lraders use a sysLem whlch ls a comblnaLlon of prlce and lndlcaLors buL Lhen you are back Lo
Lhe challenge of maklng sure LhaL Lhe slgnals are clear and unamblguous.

A06' EF&)

So, whaL ls your plan" once you are ln a Lrade? MosL sysLems drop Lhe ball here and lL can geL
unnecessarlly complex. Llke Lhe enLry slgnal and sLraLegy, Lhe exlL sLraLegy musL be equally clear and
slmple Lo manage. lf Lhere ls Loo much lnformaLlon Lo conslder ln order Lo make an exlL declslon, you
wlll never develop a rellable meLhodology around your sysLem. lnsLead, you wlll always have doubLs
because Lhere ls Loo much sub[ecLlvlLy and lnLerpreLaLlon on every Lrade you Lake.

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508#3 5.8.<#1#8)

CuL of Lhe Lhree componenLs of a compleLe sysLem, money managemenL ls Lhe mosL lmporLanL. 1ake Lo
hearL Lhls quoLe from aul 1udor !ones.
Where you want to be is always in control, never wishing, always trading, and always
first and foremost protecting your ass. Thats why most people lose money as individual
investors or traders because they re not focusi ng on l osi ng money. They need to
focus on the money that they have at risk and how much capital is at risk in any single
investment they have. If everyone spent 90 percent of their time on that, not 90 percent of
the time on pie-in-the-sky ideas on how much money theyre going to make. Then they
will be incredibly successful investors.
- Paul Tudor Jones
Money managemenL ls nC1 rlsk Lo reward raLlos. aul 1udor !ones ls nC1 advocaLlng Lhe use of rlsk /
reward raLlos. lL would be )#'(%*+,- Lo be able Lo use rlsk / reward raLlos when Lradlng buL Lhe facL ls
Lhere ls no way Lo predlcL Lhe reward! As Mr. !ones polnLs ouL, lnvesLors make Lhe 8lC MlS1AkL ln
focuslng on Lhe reward. Pow many Llmes have you rlsked more Lhan you should because you belleved
Lhe probablllLy of Lhe reward was Lhere Lo [usLlfy lL? 1haL's Lhe klnd of approach LhaL l've seen clean ouL
accounLs more Lhan anyLhlng else. lacL: ?ou have no conLrol of Lhe reward buL you have absoluLe
conLrol over whaL you can rlsk.
ln a nuLshell: focus on whaL you can rlsk! And leL Lhe reward be whaL lL wlll be. As l llke Lo puL lL, lf you
can afford Lhe rlsk, Lake Lhe Lrade!"
1hls also known as poslLlon slzlng. lL's how Lo geL Lhe odds on your slde for every Lrade you Lake. We
have a nlfLy llLLle Lool and a reporL LhaL goes wlLh lL Lo Leach Lhe concepL of poslLlon slzlng - and you can
acLually use Lhls Lool Lo deLermlne whaL you should rlsk on your Lrades, glven your accounL slze.
Check lL ouL here:
!""#$%%#&'()'*+%+*,-.-/#-0"

!#()&8< A06' *3()#1

l recommend you back LesL 100 Lrades and forward LesL 100 Lrades Lo deLermlne Lhe success raLe of
your sysLem. uurlng Lhls Llme you'll make Lweaks Lo your meLhodology and Lhen you'll need Lo LesL
Lhose Lweaks. uo noL Lry Lo make lL perfecL . buL cerLalnly, do noL begln Lradlng unLll you are maklng
money ln slmulaLlon.