Creating a Forex System

Filed under: Learn Forex Trading |

Now, I’ll say it from the outset… I do not wholly recommend creating a forex “system”. I believe that a method that involves some degree of human decision-making is a better way to go (as markets are nothing else but other humans making choices!) as you ultimately have to understand mass human psychology – and that, is forever changing depending on the current global circumstances. However, I do think it is possible to create a profitable forex system, and if you are a bit of a math geek like myself, then it can be quite a bit of fun trying.


A good place to start is the book, “Way of the Turtle” by Curtis M. Faith – which I reviewed a little a couple of weeks ago. In it (pages 136-149), several systems are outlined and reviewed. These include an ATR Channel breakout system, a Bollinger breakout system, a Donchian trend system, a dual moving average system, and a triple moving average system (phew!). There is also a summary of the results from these systems over a ten years period, although this is simulated by a computer rather than with live trading. The results show that these systems do in fact have an edge, and would have been profitable. You could make your own variations of these systems, or, you could try to come up with something completely new.


A further thing you could do is create your own expert advisor (EA), which is like a trading robot that will run on metatrader. You can create your own robot with some software or on a website such as Just do a search on google and do a bit of research (I’m not doing all of the work for you!) and you’ll find various ways of making your own trading robot to trade your very own system for you. However, making a system is not that easy, and you should do a thorough back test followed by a substantial amount of live trading on a demo account first. Well, that’s all for today – see you tomorrow.

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