A Trading System is nothing but a set of rules or parameters developed using certain formulas and/or indicators based on the price action of the underlying security.
A complete and well developed trading system will contain:
- Entry Level.
- Exit Level.
- Profit Booking Level.
- Stop-Loss Level.
- Money/Risk Management tailored to the individual traders capital and risk profile.
Trading systems have been around for many many years. Most traders use trading systems without actually knowing it. However to become a successful and profitable trader you need to include all of the above components in your trading system.