3 Steps to Build a Profitable Trading System

3-Steps to Build a Profitable Trading System

Traders in the financial markets continuously seek an advantage and maximize their profits. However, the road to trading success is riddled with difficulties and dangers. Seasoned traders have acquired significant lessons beyond charts and figures over the years. In this article, we will look at three essential ideas that can assist traders across the complex environment of the stock market.

1 - If the trend is Bullish:

In a bullish trend we should wait for a pullback before entering in a trade.
One way to enter in a pullback is to wait for a higher low when the price respects the uptrend line.

Example

A strong engulfing candle at a trendline support along with a demand area marks a new higher low creation.
As a result the market broke its last swing high after creating this higher low.

2 - If the market is sideways:

● In a sideways market. We should wait for a range breakout/breakdown and then make our decision on re-test.

Example

After a sideways market range breakdown. A proper retest was marked by an inverted pinbar followed by an engulfing candle.
As a result the market broke its recent lows after the re-test.

3 - If the trend is bearish:

● In a bearish trend we should wait for a pullback before entering in a trade.

● One way to enter in a pullback is to wait for a lower high when the price respects the downtrend line.

Example

A strong engulfing candle at a trendline resistance along with a supply area marks a new lower high creation.
As a result the market broke its last swing low after creating this lower high.