NASDAQ Canada Index
NASDAQ Canada Trading System
A trading system can be defined as a set of rules that indicate trading entry and exit points. In general, a trading system's rules are based on the various indicators of technical analysis that provide feedback about the strength and direction of a trend. Trading systems may be developed to satisfy the specific needs of individual traders.
Building a trading system based on the NASDAQ Canada Index
A Trading System based on the NASDAQ Canada index can be used in trading stocks of the public companies that comprise the NASDAQ Canada index basket. By knowing the general index trend, a trader can set rules that will prevent the trading of stocks against the index trend. This may substantially increase the profitability of a trading system and reduce the trading risk.
Based on the technical analysis applied to the NASDAQ Canada index, the system developer must follow certain rules during the development of the trading system. First, the system must generate trading signals. A certain procedure must be defined that describes steps to be taken in order to make a trading decision based on the generated signals. Secondly, a stop-loss and risk management strategy must be defined. Many trading systems incorporate additional systems that provide autotrade-generated signals by transforming the trading system into a mechanical, unemotional vehicle.
The technical analysis to be incorporated into a trading system must first be well-researched and thoroughly tested. Several indicators may be combined into one system. Then, the trading system needs to undergo testing, adjusting, and fine-tuning. Only after completing such a comprehensive development process can a system trader realistically expect to auto-trade the signals that are generated by the NASDAQ Canada Index trading system.