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Friday
Sep132013

Break Ideas Down in to Master Rules

Master Rule
To make your rules more readable and much easier to work on, break your strategy down into smaller tasks or tools (WizTools).  And then use those tools to make a Master Rule.  Your tools should be small and do a single task so that they will be easier to work on.  Your Master Rule will be very readable so you can see what you were trying to do in your trading plan for that strategy.
A ater Rule should consist of a series of filters that are looking for a technical or fundamental conditions that should occur before your strategy pulls the trigger and, it should consist of a single trigger condition.  Trigger conditions are events that happen at a single moment in time.  For example, when price crosses over a simple moving average or pivot point.
 
Example:      

This Master rule has three sub rules, the first is a filter to make sure the instrument trades at least 800,000 shares a day on the average. The second one is a filter for Bollinger Band squeeze of 20% and the Third one triggers the signal when price crosses above the 20 day EMA.     

     

 

You can even use the Prebuilt Template rules to get you started building powerfull strategies.

   

 

Going one step further:
Another nice thing about having your strategy broken down into WizTools is you can turn TradeVision into a very powerful RedLight GreenLight trading system.

 

 

 Bryan Wagner also did a weekly webinar on Master Rules: Techniques to combine simple Rules into a single Master Rule - 05/18/2011

 

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